Summit land price increases

When Tom Barker bought 600 acres in Penwell in western Ector County, he says he was simply looking for a place to quail hunt.

Terms like integrated carbon capture and coal gasification weren’t on his radar.

But now, the eyes of the world are on his dusty land. And, Barker, the owner of Judy’s Bail Bonds knows it.

The land is the preferred site for Summit Power Group Inc.’s planned $1.7 billion integrated gasification combined cycle coal power plant, which is designed to capture 90 percent of the carbon dioxide it produces. The CO2 would then be marketed for enhanced oil recovery in the Permian Basin.

But during his meeting with economic development officials Friday, Barker said he upped the price on the land to an undisclosed amount, from $375,000, which had been his asking price for the past year.

“As a matter of fact it was (more),” Barker said after the meeting. “Because that’s a fair market price. Just as land that you or anybody else owns would sell it for.”

Two years ago, the property was used as the site for Odessa’s bid for FutureGen, a government-backed, near zero emissions coal fired power plant. Barker said he’d reached a deal with the Odessa Development Corp. to give it a two-year option to buy the property for $225,000.

“In my mind, I was making a contribution to the city,” Barker said.
That option continued after Odessa lost out on FutureGen to Mattoon, Ill., and began pursuing a deal with Summit, a Bainbridge Island, Wash., company that began looking at a West Texas site for a “clean coal” plant shortly after FutureGen was sent north.

But, once that option expired in late 2008, and ODC was unable to negotiate an extension, Barker said he raised his asking price to $375,000.

“I gave them a very discounted price,” Barker said of what he asked for the site when it was set aside for FutureGen. “I told them that if I was going to hold it, I’d hold it, but I’d have to increase the price.”

Gary Vest, economic development director for the Odessa Chamber of Commerce, said he would discuss the new price at a meeting Tuesday with the board of the Odessa Industrial Development Corp., a private nonprofit company that buys and holds land for industry.

“Whether they want to go ahead and pay his price,” Vest said. “Whether they want to negotiate more. Just putting some heads together.”

Once a price is agreed upon, ODC’s board and the Odessa City Council would have to approve it. Vest said that ODC, a sales tax supported entity that gives incentives to area industry, would then reimburse OIDC for the cost of the land.

After that, Vest said OIDC (which by then should be known as Grow Odessa or GO, partly to avoid confusion with ODC) would give the land to Summit.

The process of land purchases have worked that way for many years, Vest said. Because OIDC is private, it doesn’t have to go through the same scrutiny as ODC. It also has years of experience in buying land for industrial purposes.

“It takes a while for ODC to do the approval process,” Vest said. “OIDC can do it in one meeting without having to post notice.”

While he doesn’t blame Barker for wanting more money, Vest said the process could be frustrating.

“He’s putting it to us,” he said.

Barker said he would be willing to sell a portion of the property at a lower rate.

“In my mind, FutureGen was the start of something great for Ector County,” he said. “And this project they’re doing now may be very great for Ector County, but I don’t know that it would have the same impact as the FutureGen project.”

While Barker has said he’d be willing to sell part of the land at a lower rate, Vest said that’s not practical because of all the development that could spring up around the Summit site.

Summit’s 400-megawatt Texas Clean Energy Project is expected to begin site planning soon, after learning last week that it had received a $350 million Clean Coal Power Initiative grant from the U.S. Department of Energy. The grant is expected to give the company funding to start work on the project, which is expected to bring in around 1,200 construction workers until it is completed in 2014.

While Vest said his department has an alternative site near the former Flint Hills Resources Odessa chemical plant, he says Summit prefers the Penwell site, which has already undergone an environmental review by the University of Texas’ Bureau of Economic Geology as part of the FutureGen selection process.

The ultimate decision is theirs.

Efforts to reach Summit officials were unsuccessful for this story.

Vest said time is of the essence, since Summit would like to file air permits this month. A site would have to be named by then because the permits are required to include the exact latitude and longitude of the plant.

Barker said dealing on a purchase as large as this can be confusing.

“Nobody knows anything when you’re dealing with bureaucrats,” he said. “They have to go back and deal with people and see what you have to do.”