By PETER HUSSMANN
The Jasper County Board of Supervisors today said they have been assured by representatives of Central Iowa Energy, the beleaguered biodiesel plant in the process of being acquired in by Renewable Energy Group, that the company will pay nearly $130,000 it owes in back property taxes once the asset purchase agreement is complete.
The issue arose today as the board voted to approve a resolution that authorizes the execution of an assignment and assumption agreement by and between Central Iowa Energy and REG Newton that continues the provisions provided in the redevelopment agreement entered into as the facility was being constructed in late 2006.
Under the terms of the agreement entered into in November 2006, Central Iowa Energy agreed to build a 30 million gallon a year biodiesel plant with a total investment of $38 million in return for the county's cost of constructing $745,000 in sewer improvements to the site. REG Newton, the new company acquiring the assets of Central Iowa, agrees to abide by the terms of the agreement, including a minimum assessment agreement used to pay the cost of the sewer improvements.
In an end-of-year fiscal year report filed with the federal Securities and Exchange Commission in late November, the company reported that as of the middle of November, the company had yet to pay approximately $123,000 in property taxes due at the end of September. With interest, the outstanding tax bill now stands at $129,288.
The supervisors said today that they have received assurances the outstanding tax bill will be paid. The supervisors said money generated from the closure of the transaction with REG Newton will be used to pay the outstanding debt. The payment is expected before the end of the year, the supervisors said.
The county also agreed to a subordinating its financial interest under the terms of the redevelopment agreement to AgStar Financial Services, the lending institution that purchased the interests of Central Iowa Energy's former lender, F&M Bank.
Central Iowa Energy has generated net losses of $14.3 million since beginning operations in April 2007. For the fiscal year ended in September 2009, the company reported year-long losses of $7.9 million.
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