With Red Rock Biofuels searching for money, either through equity or bonds, the Port of Morrow has revoked its authorization for the project to issue up to $65 million of revenue generating bonds, including $10 million in private activity bonds.
Lake County Treasurer Ann Crumrine spoke before the Lake County Commissioners at their work session on Tuesday, May 18. She said that the Port of Morrow Board of Directors had recently reversed their decision to grant the construction completion bonds to the project after some people raised concerns at a recent Port of Morrow Board of Directors meeting.
Crumrine told the Commissioners that she has been having calls with Red Rock Biofuels officials; she said the company remains committed to the project and the community, though it is now trying to raise money to complete the project.
She noted that Red Rock Biofeuls is pursuing a couple of paths forward. The company is looking at raising the money needed to complete the project through equity — selling shares in the project to investors. The other path involves issuing tax-exempt bonds as it has in the past. Crumrine said looking for the tax-exempt bond financing could take some time.
In November of 2020, the Rock Biofuels officials, along with their attorneys, approached the Port of Morrow about Red Rock using the private activity bonds the port was sitting on.
The Board voted to approve of Red Rock Biofuels using the private activity bonds, and an additional $55 million in general revenue bonds issued through the Port for the project.
Port of Morrow Chief Financial Officer Eileen Hendricks said the Port had received the $10 million private activity bonds through the State of Oregon to be used toward a solid waste facility project in the Port. Once the project found financing through an alternative route, the Port was sitting on those private activity bonds, and risked losing the ability to use them on a project if the bonds were not used by Dec. 31.
She said the Red Rock Biofuels project, even though it is a long way from the Port of Morrow, meets all the requirements of the private activity bond. Even though the Board and the administration of the Port of Morrow said the action was legal, they still requested that the process be reviewed by the Morrow County Circuit Court. The Court made no decision before the Board reversed its decision.
Red Rock Biofeuls Chief Financial Officer and Co-Founder Jeff Maternach said in March the actions taken by the company were legal and that all the rules were followed. He said the money from the bonds would be used to complete the Red Rock project.
After hearing concerns from the public in Morrow County, the Board voted to reverse its decision for both the private activity bonds and the general revenue bonds.
Port of Morrow Exec. Dir. Ryan Neal said there were concerns by the Board and the Port staff that the project was in financial distress. Work on the project had recently stopped completely as Red Rock Biofuels looks for ways to raise the financing needed to complete it.
Neal said with the anticipated complications of new parties and management involved in the project in Lakeview, the Board felt it was time to change directions with the private activity bonds. He also said that a new project at the Port of Morrow has recently come forward which qualifies for the private activity bonds.
He noted this proposed project did not exist at the time of the original request from Red Rock Biofuels. Red Rock Biofeuls, according to Board meetings, had spent the past several months presenting information about the project to the Board before the Board reversed its decision.