Enervation Advisors of New York has agreed to purchase the East Fork Biodiesel plant in Algona for an undisclosed amount.
According to a press release from Enervation, the plant requires a significant amount of work to conform to Enervation's plan for the property, located east of Algona.
The East Fork Biodiesel plant has been idle since it was started in 2006.
Enervation is reviewing existing permits and licenses while the engineering team works to produce a more definitive plan to bring the plant up to the desired specifications.
Enervation also intends to add additional components to the facility to create additional revenue. It may take up to a year to get the plant up and running.
"While the plant as it stands cannot produce positive cash flows, we have a strategic plan for the Algona location that enables the facility to thrive and to fulfill its promise to the community for the jobs so sorely needed in the area," Enervation founder Paul Tantillo said.
Enervation founders Tantillo and William Dollard said they share a vision of growth without dependence on government grants. They are not, they added, enamored with the return of the dollar per gallon tax credit.
"It was the false sense of security that pervaded the industry just a few years back that caused hundreds of millions of dollars in bank loans to ultimately fail and plants to close as a result of depending on soybean oil and the dollar per gallon tax credit, we choose to be able to operate clear of that dependence," Tantillo said.
Tantillo is the director of operations and managing member of Enervation. He said the company plans to spend upwards of $70 million in the renewable fuels business in the next 18 months.
According to Enervation's website, the company's initial focus was on using proven wind turbine technology to generate electricity in a clean, safe manner by taking the force and strength of the wind and converting it into energy for homes and businesses.
Investors formed East Fork Biodiesel, LLC, on Jan. 5, 2006, to capitalize on the then-booming biofuels industry. But by December, 2007, the 60-million-gallon per year plant had only produced 1.1 million gallons to test the functionality of the plant.
"(The plant) then shut down to the existing adverse market conditions," said a court document detailing the plant's woes after Farm Credit Services filed suit.
A judgment of more than $25,736,000 was served against East Fork Biodiesel and the plant languished.
CoBank Farm Credit Holdings purchased the plant for $12 million in a sheriff's sale in 2010 and all remaining assets were liquidated and used to pay off debts. The future of the plant has been in doubt since then.
However, in December, Congress renewed the $1-per-gallon tax credit for biodiesel, creating an opportunity for the idled plant.
