Biomass district heating not feasible without state bonding support
The city’s financial consultant told Grand Marais City Council on March 12 that although there was some interest shown by prospective financial backers contacted about a proposed $10 million biomass district heating project, the undertaking isn’t feasible without state bonding bill support.
Nick Anhut of Ehlers Inc. presented the findings of a report requested by the city council in January.
Anhut said that five of the nine firms his company contacted indicated an interest in financing the project, but noted that underwriting details would need to be worked out; the other four firms indicated that the project was either too small or too specialized for them to underwrite and market to investors.
He said it was clear that state bonding bill support is vital to the project’s feasibility, because financing providers will execute bond issues only when they know all other funding sources are in place.
City Councilor Tim Kennedy, who has been working on the heating plant proposal with the Cook County Local Energy Project (CCLEP), agreed that it was imperative for the city to secure some type of grant or a place on the governor’s priority list for the project to succeed. But he noted that local legislators David Dill and Tom Bakk have said they wouldn’t support the plan until the details were in place. Kennedy called it a “chicken or egg” situation.
In a related matter, the city council supported by a 4-1 vote a request made by George Wilkes of CCLEP to help fund a part-time CCLEP coordinator at a cost of $2,000, the same amount the city contributed last year. Mayor Larry Carlson cast the lone dissenting vote.