A proposed $350 million waste recycling plant has investors edgy, a community on hold and its owners in question.
Nature’s Fuel is to begin construction this month on the project in Huntington. The recycling plant is supposed to generate at least 180 high-paying jobs and has the OK for a 10-year tax abatement that would save the company about $3.2 million – if it gets off the ground.
Anticipation for the plant, first announced in 2008, was high in the region, but September marked the third time Nature’s Fuel has said it’s moving forward. With each announcement the value of the project – and number of jobs – ballooned.
As it stands now, the company is either Henry Ford or Bernie Madoff, said Mark Wickersham, executive director of the Huntington County Economic Development Corp. We’re honored to be considered for the plant. We’re rooting for them.
The men behind Nature’s Fuel are Fort Wayne native Bill Sinish and partner Glenn Johnson. Sinish serves as CEO and Johnson is president. They say financing and permitting slowdowns hindered their plans, but that the 125,000-square-foot facility will take root near Huntington’s landfill on County Road 300 West.
We had a few false starts, Johnson said, who has more than 30 years of business experience as an entrepreneur, accountant and engineer. We’re moving forward and know what we’re doing. People on the outside don’t know what we’re doing, but those who need to know, we keep informed on a weekly basis.
Johnson said the company has three patents and 18 patent claims pending, but a spokesman in the U.S. Patent & Trademark Office only verified one. He said patents aren’t recorded until a sale is final and Johnson said the process is ongoing.
At the urging of fellow investors, Johnson said he and Sinish took control of Nature’s Fuel in 2005. The business aims to sort metals from landfill waste then shred the remaining trash to prepare for pyrolyzation, which uses a lower temperature than gasification. The resulting gas, after filtering and cooling, becomes oil. The company expects to initially sell its product to a refinery and petroleum supplier.
Besides Huntington, Nature’s Fuel has plans for locations in Constantine, Mich.; and Gallatin County, Ky., although officials in Kentucky said the project is dead as far as they’re concerned.
The company last fall said it was considering building a $470 million biofuel plant and would employ 280 people, according to a Kentucky Department for Energy Development and Independence online newsletter.
The business would have netted $35 million in tax incentives. Gallatin County Economic Development Director Ken McFarland declined comment. Johnson and Sinish said they continue to explore areas in Kentucky for investment, but offered no further explanation.
In Constantine, Nature’s Fuel made another ambitious announcement in September saying it planned to spend nearly $200 million and create 130 jobs at a former plastics facility. The company originally approached the community with a renewable energy idea last fall, said Mark Honeysett, village manager. At that time, the operation was pegged at $55 million with 75 jobs being created.
If the updated project proceeds, Nature’s Fuel would save nearly $3.5 million thanks to a 12-year tax abatement, Honeysett said.
If what they’re proposing comes through it would be very good, he said. Certainly I’m impatient, but I have no reason to believe they’re not going to do what they say.
Nature’s Fuel does employ about 14 full-time and seasonal workers at a plant in Defiance, Ohio. The operation is an organic liquid recycling business that began about a year ago. The company so far has invested several hundred thousand dollars converting a more than 20,000-square-foot biodiesel plant, Johnson said.
Jerry Hayes is director of the economic development office in Defiance. He said the leased site is in very limited production. No tax incentives have been offered to Nature’s Fuel, which hopes to invest $1.6 million, Hayes said.
As for the number of jobs it wasn’t enough to get our interest, Hayes said, declining to comment further. Nature’s Fuel said the project could grow, but right now the ball is in their court, Hayes said.
The Defiance endeavor has five distilling towers, but Nature’s Fuel is operating just two of them, Hayes said.
There are reasons for that, Johnson said. For one thing, the company is in talks to buy the site. And other locations are higher priority – like Huntington.
We have other plants we want to get up and running, but we’re waiting on Huntington because that’s sort of our baby, Johnson said.
Perhaps, but Sinish and Johnson’s mainstay appears to be TechEdge Corp., another Fort Wayne enterprise. It is a headhunter company the pair have owned for 15 years. The recruiting firm assists other companies seeking technical and managerial professionals. They also operate the Johnson Sinish Group, an executive search business.
Mark Leavitt of Fort Wayne is a board member with the Indiana Search and Staffing Association. He said TechEdge has been a member of the group, but not in recent years. Even so, the company has a good reputation, Leavitt said.
I’ve heard nothing but positive things about (TechEdge), he said. If you’re not a good service provider you don’t last long in this business.
The same can be said of the alternative energy business.
Krinos Group of Youngstown, Ohio, is being touted as a key financial backer enabling Nature’s Fuel to start building.
CEO George Krinos has had brushes with the law. Court and police records in the Youngstown area depict him as a foul-mouthed businessman with a substance-abuse problem. During an early-morning incident at a Mexican restaurant in April, police and ambulance crews responded to a 911 call because Krinos said he did too much cocaine, a report stated.
Krinos later told authorities he lied about the drug overdose to keep from getting beaten up by a group of men waiting outside the restaurant. He was charged with making false alarms. The case remains open. About two months later, Krinos was charged with operating a vehicle impaired – the second time in six years.
That case also remains open.
As for Krinos, the investor says he was the victim of a vendetta by the Youngtown newspaper, The Vindicator. While it is true his first arrest involved alcohol, he said the second violation was the result of adjusting to medication. The former mayor of Campbell, Ohio, said his personal matters would have stayed that way if he weren’t in politics at the time. Krinos served the city a little more than a year before resigning in January 2011.
What needs to be emphasized, he said, is that the Krinos Group is a multifaceted financial firm offering insurance, venture capital and financial consulting services with more than a decade of experience. Its website lists several investment clients in Ohio, Las Vegas, Pittsburgh and Knoxville, Tenn.
My business experience and knowledge of the industry and our ability to raise capital is second to none, Krinos said. I’m a finance guy.
Sinish refuses to address Krinos’ issues only to say that he is not our only source of financing. Johnson said investors of Nature’s Fuel hit the roof when news broke about Krinos, but remained committed to the project.
We had Krinos thoroughly investigated before we entered into any kind of agreement, Johnson said, so, we knew about (his history).
The revelations are more a source of irritation to Johnson than an embarrassment. The Missouri native said he understands Krinos’ problems may raise eyebrows, but those issues have passed.
Keeping the faith
Huntington is a city of about 17,500 people, about 30 miles southwest of Fort Wayne. Unemployment in the county was 8.4 percent in September, up from 7.9 percent in August. Nature’s Fuel promises positions, including chemical engineers, chemists, heavy-equipment operators and sorters.
Wages would range from $16 to more than $25 an hour, Johnson said.
I can understand their being anxious, he said. I don’t blame them. They want jobs.
Steve Kimmel is executive director of the Huntington County Chamber of Commerce. He said when Nature’s Fuel first came on the scene people were excited, but that has died down considerably as most are taking a wait-and-see attitude about the project.
That includes Lee Bowers, owner of the Rusty Dog Irish Pub near downtown Huntington.
It all sounded great, but they just kind of went off the radar, Bowers said. I had forgotten about it and nobody’s really talking about it. I hope it’s not dead in the water.
Mayor Brooks Fetters has been supportive of the company and that hasn’t changed.
The dollars are huge and 180 jobs would be great, especially at the wage level they’re describing, he said. We have a landfill whether or not Nature’s Fuel comes, but they’re seemingly working hard. We’ve had other projects with (slow starts). Some took six or seven years to develop. Sometimes things just take time.
And while Fetters said he is sure there are probably coffee conversations in the community questioning the company’s legitimacy, the mayor hopes there is some truth to good things come to those who wait.
Sinish said there is.
Getting money today is near impossible, said the South Side High School alumnus who also has more than 30 years of managerial experience, including more than 20 years with Rea Magnet Wire Co., a manufacturer of magnet and nonferrous wire products. Sinish said stiffer regulations in the banking industry are partly to blame for the delays.
We could sell off to the venture capital groups who want what we have, he said, but we’re not going to do that.
Nature’s Fuel has had setbacks before and continues to work through them. For instance, the company had to abandon an Atwood, Ind., operation in an agreement with the Indiana Department of Environmental Management. The facility, which opened in 2007, used a heat treatment process to develop bio-oil from wood scrap.
But complaints from neighbors about odors and other issues resulted in Nature’s Fuel agreeing to vacate by early 2011.
We could have stayed and fought, but it wasn’t worth the fight, Sinish said. So, we just dropped it.
Well, not completely. The company plans on opening a similar plant at the Constantine site where it would renovate a 238,000-square-foot building.
They (are) glad to have us, Johnson said.
Cause for pause?
Some investors with Nature’s Fuel feel their patience is being tried. One investor who requested anonymity said he funneled more than $100,000 into the company. While he remains confident, there have been miscues by Johnson and Sinish.
I don’t think they were realistic in the financial projections and too (optimistic) on how quickly production would increase, the investor said. They failed to foresee available materials for reprocesses. But given all that, it’s still a great project.
Maybe so, but local business expert Les Baggett said there are more than a few reasons to be cautious. As acting vice chairman of SCORE – Service Corps of Retired Executives – he said some throw caution to the wind when alternative energy projects are pitched.
I invested in a company that was supposed to make batteries for the Chevy Volt, Baggett said. The business model depended on the adoption of cars like the Volt. They figured everybody would be driving one, but it didn’t happen and they went bankrupt.
Nature’s Fuel may be able to turn McDonald’s old grease into gold, but then again they may not, Baggett said.
One of the problems with green energy projects is that they require a ton of government subsidies, he said. The question you have to ask is: Do they have a sound business plan? I’d have to take a long hard look at it.
At a glanceNature’s Fuel, 421 E. Cook Road, has big plans, but so far business has been slow-going. Here’s a timeline: October 2008
The Fort Wayne company announces a plan to tap into Huntington’s landfill waste stream, converting the trash into ultra-low-sulfur fuel oil and electricity. Trash such as tires, milk jugs and plastic bags are among the items that could be converted into energy at a $40 million plant. February 2011
Company officials announce they have secured the money and environmental permits needed to convert waste into renewable fuel at the Huntington landfill with partner AE Equities. The project grows to more than $50 million and expects to eventually hire 150 people. Initial plans called half as many jobs. Groundbreaking was to be in the spring at 23 acres adjacent to the landfill. August 2011
The investment amount grows again – this time to $110 million – as the company secures a 10-year tax abatement that will save about $3.2 million during that period. Nature’s Fuel President Glenn Johnson said initial estimates for the plant’s cost were conservative, but if everything goes well the site will see the amount double over the next two years as the facility grows. September 2012
Nature’s Fuel trumpets a $350 million plan to build the Huntington waste recycling plant. The company has new financial backing from the Krinos Group of Youngstown, Ohio, said Glenn Johnson, president. The project is supposed to generate at least 180 jobs.