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Public Notices

April 18, 2014

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US Nitrogen Plan Gets Moving With Action By IDB Committee

Originally published: 2013-09-06 10:48:13
Last modified: 2013-09-06 10:50:40
 


BY RICH JONES

ASSISTANT MANAGING EDITOR

A committee of the Industrial Development Board (IDB) agreed in principle on Thursday to a procedure to facilitate the conveyance and lease of a water tank to be used by US Nitrogen.

The board's official name is The Industrial Development Board of the Town of Greeneville and Greene County, Tennessee.

The committee's preliminary agreement will require the approval of the full IDB for final agreement at an as-yet-unscheduled meeting.

Thursday's action by the committee leaves Greene County, the Old Knox Utility District and US Nitrogen to work out their specific roles on a final agreement.

The purpose of the bureaucratic maneuvering involving the four entities is to allow the use of a $923,000 Tennessee FastTrack Infrastructure Development Program grant-- that has already been awarded -- to assist in water and sewer infrastructure improvements.

Those improvements include the two-million-gallon water storage tank.

WHY THE RED TAPE?

As a private-sector business, US Nitrogen is not allowed to directly handle grant money even though the FastTrack funds are for development of infrastructure directly related to the company's site, which is now under construction off Pottertown Road.

The FastTrack grant was awarded on Sept. 17, 2012.

Exactly a year ago today, on Sept. 6, 2012, US Nitrogen conveyed a warranty deed to Old Knox Utility District for the 2.08-acre site where the water tank is to be built off Pottertown Road.

BALL STARTS ROLLING

The three-person committee of the Industrial Development Board, composed of Chairman Scott Niswonger, Ginny Kidwell and Greeneville Mayor W.T. Daniels, agreed in principle Thursday on actions to move forward with construction of the tank.

Numerous government officials, engineers, lawyers and consultants have been involved in three separate meetings since Aug. 15 to move the project forward.

For Thursday's meeting, an 11-page "term sheet" had been prepared by Industrial Development Board attorney Jerry Laughlin and US Nitrogen attorney Michael K. Stagg, of Nashville.

DIFFERENT ROLES

The following actions are how the plan to complete the water tank project is stated in the term sheet.

* Old Knox Utility District will agree to convey the site of the tank to Greene County.

* Once the tank project is finished, the county will convey the water tank site and the tank itself to the Industrial Development Board.

* The Industrial Development Board will hold fee title to the site and the water tank and lease the tank back to US Nitrogen on a 99-year basis at a nominal fee.

* The county government or Old Knox Utility District will be responsible for securing all governmental and regulatory approvals, licenses and permits to construct, install and operate the water tank.

* The county will provide "utilities" required for installation, commissioning and operation of the water tank project.

WHAT'S NEXT

Attorneys representing US Nitrogen, Old Knox Utility District, Greene County, and the Industrial Development Board will meet in the next few days to work out the details following the agreement in principle.

Some of the wording in the initial 11-page "term sheet" approved by the IDB committee on Thursday is sure to change in the next week or so -- in particular, issues related to water rates and, possibly, the amount of water to be purchased and used by US Nitrogen.

Nevertheless, representatives of all four entities attending Thursday's meeting at the Courthouse Annex seemed to agree with the general concept that use of the FastTrack grant needs to be moved forward as fast as reasonably possible.

Attorneys were tasked on Thursday with "fine-tuning" the initial wording of the term sheet.

"We've got a general agreement. Now we can move into a specific agreement," said Stagg, the US Nitrogen attorney, near the conclusion of the meeting.

"We [the IDB committee] are in agreement to the exchange of ownership," Niswonger said, "and Old Knox and US Nitrogen will negotiate rates and [water] usage among themselves."

COMPANY'S COMMITMENT

US Nitrogen has made a $1.038 million commitment to the project, to go along with the $923,000 FastTrack grant.

According to the term sheet presented on Thursday, maintenance of infrastructure improvements that are made with the grant funds will be provided by US Nitrogen under its lease with the IDB.

In addition, maintenance of the water tank (but not including the pressure-reducing valve to be installed at the junction of Forest Road and the water tank site) will be provided by US Nitrogen.

"Maintenance of the pressure-reducing valve and all other water line installed as part of the project will be provided by Old Knox; provided, however, that US Nitrogen may agree to pay a reasonable annual maintenance fee to Old Knox for this portion of the water line," the term sheet states.

"The IDB shall have the right, but not the obligation, during the lease term, to require US Nitrogen or its assignee to purchase the water tank site, including the real estate, from the IDB for a nominal fee."

'GOOD FAITH'

Additionally, the term sheet states that, "Old Knox and US Nitrogen shall negotiate in good faith the terms and conditions of an agreement providing for delivery of water by Old Knox to US Nitrogen at the water tank site at minimum flow rates."

Water-flow rates were discussed at length at Thursday's meeting.

Cathy Walden, the engineering consultant for Old Knox Utility District, said the district could provide an average daily flow of 450 gallons of water per minute.

US Nitrogen officials said that those numbers could be worked with by the company, and that statement led to a consensus among the four entities to have the legal "wordsmiths" rework the terms document prior to the next meeting.

TANK SPECIFICATIONS

The tank will be constructed by Crom Construction Corporation of Gainesville, Fla. The company was the successful bidder for the project on Feb. 21.

Features of the tank include:

* storage capacity of two million gallons;

* approximately 2,490 linear feet of 12-inch water line running from the water storage tank to U.S. 11E;

* connection to a six-inch water line;

* two 12-inch gate valves and boxes;

* 25 linear feet of 20-inch bore with 12-inch DIP (ductile iron pipe) encased;

* air release valve and box;

* fire hydrant arrangement; and

* connection to a 12-inch water line.

BACKGROUND

The Industrial Development Board's entry into the US Nitrogen project became necessary "due to changed circumstances and conditions, including engineering and financial considerations," according to two resolutions approved during the board's meeting on Aug. 15.

The US Nitrogen plant is scheduled to begin operation in 2014.

The plant will produce liquid ammonium nitrate.

'PROJECT HAS CHANGED'

"The scope of the (US Nitrogen) project has changed as far as water and sewer needs," said Tom Ferguson, president and CEO of the Greene County Partnership, at the August meeting.

Initial plans called for a 1.5-million-gallon storage tank.

Those plans were later changed to a tank with 2-million-gallon capacity to decrease the possibility of undue demands on existing water lines and capacity capabilities to clients served by Old Knox Utility District and the Town of Mosheim.

In addition, the state fire marshal requires a 600-gallon resorvoir of water for fire suppression.

Greene County Mayor Alan Broyles, who serves as chairman of the Industrial Development Board, told members at the August meeting that, "nobody's here to make money or to spend money."

It was at the Aug. 15 meeting that the plan was unveiled for the IDB -- in cooperation with stakeholders Old Knox Utility District and Greene County -- to serve as the governmental channel for use of FastTrack funds and the $1.038 million commitment from US Nitrogen, and then lease the water tanks and associated pipelines and infrastructure back to US Nitrogen at a nominal fee.

KEY PARTICIPANTS

US Nitrogen was represented at the meeting by US Nitrogen project manager Justin Freeark and environmental manager Hollie Binkley, as well as by attorney Michael K. Stagg.

The county was represented by Mayor Alan Broyles, who also chairs the full Industrial Development Board.

Old Knox Utility District was represented by district board Chairman J.W. Douthat, as well as consulting engineer Cathy Walden and attorney Keith Livingston.

The IDB was represented by committee chairman Scott Niswonger, committee members W.T. Daniels and Ginny Kidwell, and attorney Jerry Laughlin.

The meeting also included a number of other consultants to the various parties, and others associated with one of the four groups participating in the discussions.

Also present at the meeting were Greeneville water superintendent Laura White, and environmental activist Park Overall.

 
For more information and stories, see The Greeneville Sun.

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