The Western Sugar Cooperative has pulled out of the Lovell Inc. greenhouse and food hub project, leaving the project in flux.
Lovell Inc. said they are still moving forward with the project.
“Unfortunately, just on Friday we received an email that they did not wish to participate in the greenhouse project,” Lovell Inc. Director Elaine Harvey announced during a Monday evening meeting regarding the project. .
The email was just one sentence long, according to Harvey.
“We don’t want to send any kind of message that is negative toward Western Sugar,” Harvey said. “Whatever their reasons are, they still know their business better than we do.”
Harvey said Lovell Inc. is unable to answer questions regarding Western Sugar’s decision and directed the public to contact Western Sugar with any inquiries.
“At this time they are not able to participate, they are not going to participate,” Harvey said. “If people have additional questions, we encourage them to talk to Western Sugar.”
The Greenhouse previously would have sat on property adjacent to the sugar factory, and would have used the wastewater from the factory to heat the greenhouse during campaign season. The Co-op’s decision to remove themselves from the project is a blow, according to Americorps VISTA Food Hub Coordinator Jeanine Swift.
“The waste water, the hot water coming from Western Sugar, was the unique factor; that was the pull that said this project is innovative,” Swift said. “It was saying we are taking something that was garbage and we are taking something that is valuable, which is heat. It takes the shine off of it, for sure.
A business partnership agreement was signed between Lovell Inc. and Western Sugar to give the hot water as an in-kind donation.
“What does it do for Western Sugar? Well, for one thing, it has the potential to reduce the smell a heck of a lot,” Swift said.
According to Swift, the water that exits Western Sugar is at a very high temperature that causes the sugar within it to ferment. The greenhouse would naturally reduce the temperature of the water.
“By the time the water exits the greenhouse, it’s going to be cold,” Swift said.
Ric Rodriguez, the Vice-Chairman for the Lovell District Co-Op board, said that the matter did come before the local board. Western Sugar has not withdrawn support for the project but is unable to participate at this time, he said.
“It’s not that we’re not supporting the project. We just can’t really get involved in it. We’re not in the position where we can” Rodriguez said. “Their business plan is not something that we thought was favorable to our current position.”
Rodriguez said Western Sugar would still be open to partner with the project in the future if another opportunity arises.
“Absolutely, we’ll be open to that, for sure, if it’s feasible, if it makes sense for our shareholders,” Rodriguez said. “We did discuss it. The position we’re in is that we need more information. We’re not really in the right place.”
Harvey said Lovell Inc is contacting other landowners in the local area to determine a new location for the greenhouse. Some are open to working with Lovell Inc., she said.
“It’s viable wherever we build it as long as we are in the proximity to natural gas, to electricity and to the (water) pipeline,” Harvey said.
Multiple people who attended the meeting encouraged the town to advocate for the project with Western Sugar.
“What if the city got an emissary to wine and dine whoever said no to the project,” Scott Brown said. “ I don’t think the city needs to take no for an answer.”
Ken Grant voiced his agreement with Brown.
But, regardless, Swift said, the project is feasible with or without the participation of Western Sugar.
We still have a feasibility study that breaks down why a greenhouse and a food hub will do well here,” Swift said. “What we found is we’re going to make a profit.”
According to figures determined by an economic feasibility study by Greener by Design, an LLC out of New Jersey, the greenhouse will turn a large profit.
The cash flow analysis for 10 years shows the greenhouse producing a gross revenue of $963,967 during its first year, $1,067,284 of revenue in its fifth year and $1,263,799 in its tenth year. Total operating costs will be $867,715 in the greenhouse’s first year, $939,243 in its fifth year and $1,037,000 in its 10th year. Net operating income will start at $124,319 in year one and by year 10 is projected to stand at $260,644.
The cash flow analysis addresses the potential loan payments but not lease payments. The town of Lovell has yet to determine the lease payments however the lease payments will be at least the loan payments, Harvey said.
Wastewater provided by Western Sugar would have saved the greenhouse up to $33,685 a year, according to the analysis.
At least seven jobs will be created by the greenhouse at an average of $15 an hour, Swift said.
A greenhouse company will run the greenhouse, Swift said. The town of Lovell will own the property and lease it to the operator.
The cost of the one-acre greenhouse and the other facilities attached will be about $4 million to design and construct the greenhouse.
Lovell Inc. plans to raise the money to design and construct the greenhouse by applying to the Wyoming Business Council Business Ready Communities Grants and Loan program as well as other grants. The Wyoming Business Council will grant up to three million dollars for the project, but one million dollars will have to come from a loan taken out by the town from the council. The town of Lovell will also be the applicant in the grant.
The payments will be approximately $73,680 a year for 25 to 30 years. The payment will be negotiated between the town and The Wyoming Business Council
If the town of Lovell would take out the million-dollar loan, the loan payments would count as revenue recapture. If Lovell doesn’t take out the loan, as per grant conditions, 25 percent of income to the town from the greenhouse will go back to the business council. The remainder of the income not captured by the loan payments or the 25 percent payment will go toward economic development projects within Lovell.
“If (the town) wants to build a new sewer line, you would have the funds to do that,” Swift said. “If you want to build an electrical hookup for food trucks, you would have the funds to do that.”
The loan conditions will be very favorable, Harvey said. Harvey said she asked the Wyoming Business Council about the worst-case scenario, what happens if the greenhouse’s operator causes the greenhouse to go out of business?
“Does the Town of Lovell have to pick up that payment? They said no. As long as the Town of Lovell makes a good faith effort and does due diligence to find another operator to come in and operate that very specialized building, no we don’t,” Harvey said. “It’s a risk the State of Wyoming is willing to take in order to diversify our economy.”
The grant deadline, as it stands, is March 1 for the final draft. The decision to award will be made by the State Loan Investment Board will be June 1.
If the town needs to delay the process to the next loan cycle, the work will be in place to support the town applying at a later time.
“It’s there for you guys,” Swift said
The project will have two facets. The one-acre greenhouse would ensure local produce is grown year-round, while the food hub will support local farms by offering distribution and value added services, as well as marketing to local producers.
“You have to sign a contract with the food hub that says that I will follow all of the food safety rules when I grow my food. And with that you can come to the food hub house, and you can sort, you can grate, you can wash, you can package, and you can (chill) or put on a loading dock with the food you already grow. You can use the kitchen to add value to what you do,” Harvey said.
Those with EBT cards and in the Women, Infants and Children Program will be able to purchase inside the food hub, according to Harvey.
The feasibility study recommends the greenhouse have four growing zones. The first zone will likely be dedicated to growing lettuces. The second zone will likely grow tomatoes. The third zone will be focused on growing herbs. The fourth zone will be left open to the market wants and needs.
“We want to leave things open ended, so if we have a customer who tells us they need one crop at a certain volume, we want to be able to accommodate them. “
The greenhouse would be able to supply several local institutions. These institutions will include local schools, senior center, restaurants, grocery stores and wholesalers.
“The South Big Horn Senior Center in Greybull told us this story where they would get cases of lettuce from a wholesaler in the winter and they would have to throw out whole cases and go to their local supermarkets and buy new cases of lettuce,” Swift said. “…Anytime they have to throw out produce it hurts them.”
The greenhouse will ensure quality produce is always available within the Big Horn Basin.
“We can tell you point of origin,” Swift said. “The less produce has to travel, the more nutritional content you’ll get and the less problems you’ll have.”
“You won’t ever have to worry about the greenhouse ever having to recall romaine lettuce,” Harvey added.
Food security is another benefit.
“We’ll have that security, we won’t have to worry about not having produce,” Swift said. “You won’t have to worry about what just happened in Wind River Canyon.”
The food hub and greenhouse is not looking to compete with any local businesses but rather to work with them, according to Swift. She spoke about the possibility of working with Red Apple during Monday’s meeting.
We will have a quality product; they probably want it on their shelves. We don’t want to interfere with their business as well, we want to partner with them,” Swift said.
Both major wholesalers in the basin area, Food Services of America and SYSCO, also expressed optimism for the project.
“One said things to us like we could potentially buy everything you produce,” Swift said. “They sell to everyone in the area.”
The Greenhouse as a whole will grow a larger quantity of produce than can be sold in Big Horn County, Harvey said, meaning their will be opportunities to sell the produce throughout the state as well as, potentially, across state lines in Montana and Utah.
Those who attended the meeting were supportive of the project.
“I think you should go ahead and do it,” Lee Carr said after detailing 40 years of experience observing and working with greenhouses.
Brown told Swift and Harvey he wasn’t supportive of the project using government funds but thought the project would be beneficial to the community as a whole.
Incoming mayor Kevin Jones and town administrator Jed Nebel said the town’s decision would likely come down to what they feel the public consensus is and if the benefit of the project will be worth the public investment of a million dollar loan.
“You’re going to have to have the town buy into this, because we’re going to be using their tax dollars for this project,” Jones said.
By Ryan Fitzmaurice