SOUTH BEND, Indiana — South Bend plans to buy a $2 million corn oil extraction unit and lease it back to a company as part of deal to reopen a shuttered ethanol plant.
The city and Noble Americas, based in Stamford, Connecticut, are still negotiating the deal that would call for the city to lease the unit back to the company for no less than $100,000 per year over five years, The South Bend Tribune reported (http://bit.ly/1kHd6y2 ). The money would come from the city's Airport Tax Increment Finance Area, which includes South Bend Regional Airport and the Studebaker corridor.
Noble Americas Corp., a subsidiary of Hong Kong-based Noble Group, bought the plant for about $8 million in July after the previous owner, New Energy, declared bankruptcy. The company is spending another $28 million to get it ready for production, said Bernie Punt, a Noble Americas spokesman.
Chris Fielding, assistant executive director of community investment, said having the city buy the corn oil extraction unit was part of the deal from the start.
"This was part of the method that we used to really attract Noble Americas to the plant," he said.
Producing corn oil makes sense at the plant in that it makes the plant more sustainable and better able to withstand fluctuations in the ethanol market, Punt said. He said he expects corn oil production to generate additional revenue of between $4 million and $6 million a year at the plant.
Punt said Noble Americas expects to restart the plant sometime in July. He said the company plans to hire between 50 and 65 people at an average wage of about $27 an hour.
Information from: South Bend Tribune, http://www.southbendtribune.com