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Grand Forks Committee of Whole pushes Fufeng development agreement forward

The committee approved the agreement in a 5-1 vote, with Rebecca Osowski dissenting. Council member Kyle Kvamme was absent. Up next: The City Council will consider the agreement next week.

Grand Forks City Hall
Grand Forks City Hall
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GRAND FORKS – Members of the Grand Forks City Council, acting as the Committee of the Whole, on Monday pushed forward a development agreement for a controversial corn plant that is proposed to be built on the city’s northern edge.

The committee approved the agreement in a 5-1 vote, with Rebecca Osowski dissenting. Council member Kyle Kvamme was absent.

Although the Committee of the Whole is made up entirely of City Council members, it is only a board that convenes to discuss city business, study issues and provide preliminary approval for subsequent, and official, council meetings. That means the agreement still must be approved by the members when they convene in an official City Council meeting. That approval likely will come next week.

Notably, the city has been seeking a stipulation that requires Fufeng Group – the company that wants to build the plant – to “secure and have issued to the city” a $5 million letter of credit. The funds, according to the agreement, could be used by the city “for the recovery and reimbursement to the city of all costs, expenses and fees the city incurred” in case of a termination or default. In Monday’s agenda, it was officially listed as the “first amended development agreement” – amended to note that instead of a letter of credit of $5 million, “it allows Fufeng to basically deposit $5 million in the bank account,” according to City Administrator Todd Feland.

The proposal to build the plant has stirred controversy, almost since it was first announced late last year. Opponents have been critical of the Chinese-owned company’s background, and are concerned about what they feel are national security risks, considering the proposed plant’s relative proximity to Grand Forks Air Force Base.

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Recent national reports likely do not help alleviate concerns. Late last week, CNN reported that an FBI investigation determined that equipment placed on cell towers in the Midwest by the Chinese telecommunications company Huawei is capable of disrupting Department of Defense communications. In its report, CNN noted that the Chinese government denies any efforts to spy on the United States and also that Huawei denied that its equipment is capable of operating in any communications spectrum allocated to the Defense Department. 

Fufeng’s COO, Eric Chutorash, also has repeatedly said the proposed Grand Forks plant will not engage in any sort of espionage.

It was announced earlier this month that the Committee on Foreign Investment in the United States – a panel commonly known as CFIUS – will review the Fufeng project.

In the moments leading up to Monday’s vote, committee members engaged in a conversation about how the agreement has grown in size over the weeks, while audience members challenged them not to move forward with approval.

Council member Bret Weber, during the discussion, said he believes the agreement “does a fantastic job of protecting the city from the types of concerns that have been raised, and as council members we have raised, and I move approval of the amended development agreement.”

An audience member then spoke up: “Do not do this, guys.”

Weber’s motion was seconded by Danny Weigel.

Councilman Ken Vein then asked a few questions of City Attorney Dan Gaustad about the size of the agreement.

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“I was maybe a little confused,” Vein said. “The original development agreement was like 45 pages and when I printed this out, it was like 150 pages. ... How has it progressed?”

Gaustad responded: “There has been no change in the development agreement other than what has been proposed. The length of it might be because of the exhibits that were attached. All those exhibits were contained in the development agreement as originally drafted.”

Council President Dana said any changes that have occurred have been included in previous meeting agendas.

With the exceptions of the exhibits, Vein said, “the rest of it, you’re telling me, is all the same?”

Gaustad responded affirmatively.

At that moment, Osowski – a new board member who earned a spot in the June election – sought to table the decision on the development agreement. But Sande said she couldn’t, since a motion – followed by a second – had been made and was awaiting a vote.

The committee then went forward with the vote, with Osowski the only member against approving the agreement.

The full development agreement (which can be seen in its entirety on the city website) includes 10 sections – the first one simply outlines 70 “definitions” used within the agreement. Other sections include:

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● Development/construction of Grand Forks plant and city infrastructure.

● Master development plans and other development agreements.

● Financing and cost allocations of city infrastructure.

● Utility rates and fees.

● Tax and other incentives.

● Development letter of credit/pre-construction fees and costs.

● Conditions to construction and financing of city infrastructure.

● Conditions to construction of the Grand Forks plant.

● Development representations/indemnity/release of liability.

After Monday’s meeting, Feland said some of the important points within the development agreement include the environmental, engineering and public safety factors of the project.

“It encapsulates all the areas that we need to study in good faith with Fufeng to determine if and how best to move forward with the project,” Feland said.

The development agreement is also important as it protects the city financially, according to Feland.

“Not only does it require us to provide detailed studies and to find positive ways forward, it also protects the city up front on some of the up-front investments we’re making on studies and environmental reviews,” he said.

Also Monday, wastewater pretreatment, traffic, thermal plumes and odor were among Fufeng’s memorandums-of-understanding progress updates given to council members.

Paul Boersma, associate vice president at Black & Veatch, reviewed some of the updates.

For wastewater pretreatment, a consultant team determined that the aerobic treatment process Fufeng is proposing is a common and accepted method for pretreatment of wastewater. The consultant team also determined that covers should be considered over certain processes, though this discussion is ongoing with Fufeng.

Work on water supply, including raw and portable/fire water along with solid waste management, are currently in progress and will be presented to the council at a future meeting.

A thermal plume evaluation looked at the potential impacts the plant could have on light general aviation used by UND for training and commercial aircraft. The evaluation determined that there is not an adverse impact on either light general aviation and commercial aircraft, though there is a slight impact on sport aircraft.

Odor control expectations identified potential odor sources from the plant including the various processes of raw material handling/processing, steeping, fermentation, material drying and wastewater treatment that can factor into an odor from the plant. An air permit will be submitted in August.

Bolton & Menk, an engineering consultant in Fargo, was hired to perform a traffic impact study, analyzing the existing and projected future traffic conditions expected to be impacted by truck traffic from the plant. The study considered passenger car and truck traffic. Mike Bittner, principal transportation engineer with Bolton & Menk gave an overview of the final report.

Major corridors expected to be impacted are Washington Street (State Highway 81) and Gateway Drive (US Highway 2). Since both roads are also state highways, Bolton & Menk and city staff partnered with the North Dakota Department of Transportation to ensure that all of their concerns were addressed as part of the traffic study.

The study estimates that the plant will generate 200-300 trucks per weekday and the total trip generation, including passenger cars and trucks, is estimated to be 480-580 trips per weekday.

Several recommended improvements to accommodate the increased truck traffic at intersections were identified in the study. The improvements include constructing a northbound-to-westbound left-turn lane on North Washington Street at 27th Avenue North, lengthening the southbound-to-eastbound left-turn lane on North Washington Street at Gateway Drive, constructing a southbound-to-westbound right turn lane on North 42nd Street at Gateway Drive and lengthening the eastbound-to-northbound left-turn lane on Gateway Drive at North 42nd Street.

The study also recommends lengthening the westbound-to-northbound right-turn lane on Gateway Drive at North 42nd Street and converting North 42nd Street from Gateway Drive to 27th Avenue North to a three-lane section if traffic issues arise when the plant is in operation.

In other city news Monday:

● Council members received a revised ordinance for electric scooters. The council first heard about the possibility of the electric scooter system, by Birds Ride Inc., at the end of June. Since then, an ordinance relating to the use and operation of electric scooters in Grand Forks has been drafted, with the first reading last week. After last week’s discussion, a revised ordinance has been drafted. The revised ordinance lowers the age requirement of operating an electric scooter from 18 to 12, though anyone under the age of 18 must wear a helmet. Council members talked about the number of scooters they would want to be available in the city with a set number to be determined at next week’s council meeting when a public hearing and second reading of the ordinance will be held.

● Considered approving PKG Contracting, Inc. to provide construction manager at risk pre-construction services for the Wastewater Treatment Facility improvements, and to complete bidding and construction using CMAR project delivery. The use of CMAR project delivery for the two upcoming Wastewater Treatment Facility Improvements projects was approved by council members on June 6.

● Earlier in the day, members of the Grand Forks/East Grand Forks Wastewater Intermunicipal Advisory Board received a wastewater interconnect operations update. The wastewater interconnect makes it so the city of Grand Forks provides wastewater treatment to the city of East Grand Forks. The cities of Grand Forks and East Grand Forks entered an intermunicipal agreement in 2016 and wastewater service to East Grand Forks began in 2017. During the meeting city leaders from both Grand Forks and East Grand Forks shared that the wastewater interconnect between the two cities has been working well. The projected cost of service for the interconnect in 2023 will be $434,539, up from 2022’s cost of service, which is $392,000.

Related Topics: FUFENG
Meghan Arbegast grew up in Security-Widefield, Colorado. She earned a Bachelor of Science in Journalism from North Dakota State University in Fargo, in 2021.

Arbegast wrote for The Spectrum, NDSU's student newspaper, for three years and was Head News Editor for two years. She was an intern with University Relations her last two semesters of college.

Arbegast covers news pertaining to the city of Grand Forks/East Grand Forks including city hall coverage.

Readers can reach Arbegast at 719-235-8640 or MArbegast@gfherald.com.

Pronouns: She/Her
Languages: English
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