HomeMy WebLinkAboutCOM 1155.002 2004-2006
To: Hawaii County Council Members and Council Members-Elect
County of Hawai` i
25 Aupuni Street, Hilo, HI 96720
c)
From: Protect O`okala Ad Hoc Steering Committee
P.O. Box 42, O`okala, HI 96774 ti
808-936-2675 or 808-936-0072 -1)
www ProtectOokala.ora 7n
ti
Date: November 27, 2006
Re: AGENDA ITEM "PRESENTATION BY MR DON BRYAN, PRESIBENT
AND CEO, TRADEWINDS FOREST PRODUCTS" AT THE NOV. 28, 2006
MEETING OF THE COMMITTEE ON HUMAN SERVICES & ECONOMIC
DEVELOPMENT
Please find attached some informational materials on the O`okala community opposition to
Tradewinds Forest Products' plans to build a veneer mill and power plant in the middle of our
residential community.
Here is a brief summary of our concerns:
1. Industrial business of this size does not belong in a residential community due its
impact on the quality of life (map of community attached).
2. O`okala has a total of 89 homes, and the homeowners of 63 households, or 71%
of households, oppose this project being located in the middle of our community
(Opposition Statement attached, petitions available for review upon request).
3. Tradewinds does not have the contract for the trees in Hamakua; the contract was
awarded to Fulghum Fibres this month. Tradewinds has no claim on the trees in
Hamakua.
4. Tradewinds main source of trees is at the Waiakea Timber Management Area, .
about 40 miles south of O`okala.
5. The projects' main investor is Rockland Capital Energy Investments, an
international energy investment corporation "focused on the acquisition,
development, and optimization of companies and projects in the North America
and European energy sector." Rockland has no experience in mill co-generation.
6. Upon completion of the project, Rockland has the option to obtain major financial
interest in Tradewinds and majority seats on the board (Letter of Intent attached).
Despite Don Bryan's lack of financing and performance over the past seven years, his public
relations pattern is always to say he's ready to go. His current claim is that he is ready to begin
construction in Feb. 2007. But here are the facts that show this to be yet another unrealistic start
date:
1. Don Bryan does not own the O`okala mill site. He has an option to buy, which he
has not yet exercised due to lack of financing for the mill side of the venture.
Comm. Nk~ (IS J' L
Ref. To:
Ref. Date QS
2. Don Bryan submitted his Clean Air permit application to the state Department of
Health on May 30, but it was deemed incomplete on July 17. He just submitted
the revision on Nov. 17 and it has not yet been reviewed and therefore is not yet
considered submitted.
3. Once the Clean Air permit application is deemed complete, there is a 30-day
public comment phase, a public hearing, and a 45-day EPA review conducted
before the application is considered for final approval.
4. As of Nov. 22, the Hawaii County Planning Department has not received any
permit applications from Don Bryan.
The following documents are attached:
1. Our Opposition Statement
2. A map of our residential community showing the proximity of the mill site to our homes
3. The Letter of Intent between Tradewinds and Rockland Capital Energy Investments
Members of the Protect O bkala Ad Hoc Steering Committee:
Kenneth Bugado, Susie Collins (records), Scott Enright, Violet Ishikawa, Aloe Ita, Walter Ita
(co-faci&tator), Tawn Keeney, Bobby LaBrie, and Robbie Paghai (co-facilitator).
Statement in Opposition to the Veneer Mill and Co-Generation Power Plant
Planned for the Old O'okaln Sugar Mill Site on the bland of Hawaii
www.ProtectOokals.org
Statement of the Protect O' okala Ad Hoc Steering Committee
Aug. 9, 2006, Revised Nov. 24, 2006
O'okala, the Island ofHawai'i
The Protect O'okala Ad Hoc Steering Committee speaks on behalf of sixty-three (63) of the
community's total of eighty-nine (89) households. The homeowners signed a petition stating in
whole:
I, the undersigned am a homeowner in O'okala and oppose the construction of a veneer
mill, co-generation power plant and plywood lay-up facility at the old O'okala sugar mill
site. T Leese proposed industrial facilities will create unacceptable health, safety and
welfare risks to the residents of O'okala.
In contrast, homeowners of only eight (8) households signed a petition in support of the project.
Seven (7) households abstained from signing either petition, and eleven (11) households did not
respond. Every attempt was made to contact each and every homeowner; homeowners had a free
choice of which petition to sign. (Signed petitions are available for review upon request.)
Tradewinds Forestry Products, the developer of this project, claims that the establishment of this
value-added forestry product business would improve the lives of citizens of the Hamakua Coast
through the creation of a new diversified industry and the resulting jobs. But in reality, this
project would do just the opposite to the residential community of O'okala by drastically
changing the quality of life now enjoyed.
A veneer mill and power plant located at the old O'okala mill site are unacceptable to the
majority of homeowners in O'okala for the following reasons:
1. The Hawaii County General Plan states, "...industrial development shall maintain
or improve the quality of the present environment" (14.4.4). Despite Tradewinds'
claims that "this has been an industrial site for several generations," there has not been an
industrial business located in the O'okala community for 20 years, the span of an entire
generation. The truth is, O'okala is no longer a company town, but rather a well-
established, thriving residential community of 89 privately-owned homes. The industrial
zoning of the old O'okala mill site is left over from the by-gone sugar era and such use is
no longer acceptable to the majority of O'okala residents.
2. The Hawai'i County General Plan also states, "...noxious heavy industrial uses
most be separated from residential and other incompatible uses" (14.4.1). The vast
majority of O'okala homeowners oppose plans for a veneer mill and power plant at the
old Obkala sugar mill site because of quality of life issues such as unacceptable health,
safety and welfare risks to the community. Specific concerns include, among others, dust
and particulate matter polluting the air quality (by far the greatest concert of our senior
citizens; 30% of O'okala residents are retirees), constant noise 2417, increased business
1
traffic on Old Mamalahoa Hwy, logging truck traffic on the nearby haul cane roads, daily
importation of coqui frogs and noxious insects, and the negative impact on property
values.
3. Concerns about Tradewinds' business plan. The Protect O'okala Ad Hoc Steering
Committee has serious concerns about the viability of Tradewinds' business plan for the
following reasons:
• For seven years, Tradewinds has been unable to secure financing for the mill
component of their venture. They've been on the verge of default of their state
land lease agreement for logging at Waiakea Timber Management Area because
of lack of financing and performance.
• As citizens of the state, we are concerned with the lack of fiduciary responsibility
on the part of the State of Hawaii in allowing Tradewinds to tie up the multi-
million dollar asset at the Waiakea Timber Management Area with empty
promises over the course of seven years.
• During the past year, as Tradewinds stopped negotiations with Kamehameha
Schools to use KS lands for their project, and secured an option to buy the old
O`okala mill site (not yet purchased by Tradewinds), Tradewinds' business plan
shifted from a large veneer mill and true co-generation facility employing 400
people to a small veneer mill and oversized power plant employing only 100
people-
• The only major potential investor that Tradewinds has attracted is Rockland
Capital Energy Investors, "an investment company focused on the acquisition,
development, and optimization of companies and projects in the North America
and European energy sector" (www.rocklandcapital.com). Rockland has no prior
experience in veneer mill co-generation facilities. When contraction is
completed, Rockland would receive a substantial interest in Tradewinds including
the right to appoint three of the five board members. Too see the Letter of Intent
between Tradewinds and Rockland, go to http://prctactookala.org.
• Forest industry studies show that it is highly questionable whether or not there is
enough value-added quality wood on the island to sustain a veneer mill. For more
information, see Market Study at http://protectookala.org/.
• Tradewinds has no claim on the trees in Hamakua; the contract was awarded to
Fulghurn Fibres in Nov. 2006. These trees, located on Kamehameha Schools'
lands, were planted expressly for chipping, not veneer, and according to forestry
experts, <15% of the trees are veneer quality wood. Why is Tradewinds planning
to build at the old O'okala mill site?
• Tradewinds' resource of trees is at the Waiakea Timber Management Area, about
40 miles south of O'okala. Again, why is Tradewinds planning to build at the old
O`okala mill site?
• Of the many forestry experts that the ad hoc committee has consulted on this
issue, not one has confidence in Tradewinds' business strategy. Contact
information of these experts is available upon request.
• These observations beg the question: Is Tradewinds building a viable veneer mill
with a true co-generation facility or an unsustainable mill with an oversized power
plant? We believe the likely outcome of this venture will be a failed veneer
2
mill, and the residents of O`okala will be left with a large power plant located
in their community.
4. Our community's opposition is only in regards to the location of this venture. We
support development of a healthy, diversified forest industry on the island, but oppose
Tradewinds' industrial project being built in a residential community. Note that for the
past several years while Tradewinds was negotiating with Kamehameha Schools for land
to build their project at a location about 4 miles north of the village of O`okala, there was
no protest from O`okala residents.
5. The Protect O`okala Ad Hoc Steering Committee is not interested in negotiating
with Tradewinds on the minutia of the project such as noise levels or amount of
truck traffic or deal sweeteners such as mentoring projects or building of a library
and caf6. Simply put, we hold the position that it is unacceptable for an industrial project
of any size or scope to be located in the middle of the O`okala residential community.
THEREFORE, we urge all parties involved in this venture including elected officials,
government regulatory agencies, investors, citizens and community leaders in other parts of the
island, union leaders, and Tradewinds' president Don Bryan, to do all in their power to stop
plans for this industrial venture at the old O`okala mill site and support moving it to a suitable
location away from people's homes.
Further, we remind Mr. Bryan that at the informational meeting he held in O`okala on
June 27, 2006, he stated to the crowd, which included our mayor, county councilman, state
representative, and the governor's liaison, that if the O`okala community did not want the
mill, Tradewinds would leave W okals. On behalf of the majority of homeowners in
O`okala, we are stating unequivocally that this project is not waated in our residential
community, and we ask Mr. Bryan to honor his statement and loge.
In addition, should the project continue moving forward as planned, the Protect O`okala Ad Hoc
Steering Committee, on behalf of the O`okala community, is prepared and committed to
vigorously seek recourse with the government through the public input phases of the permitting
process as well as other activities, including, but not limited to, litigation.
IN SUM, an industrial business has no place in a residential community. We should all be
working together, putting our energies toward smart, innovative development of a diversified
forest industry, rather than subjecting a peaceful residential community to unacceptable health,
safety and welfare risks associated with industrial business.
Prepared by the Protect O okala Ad Hoc Steering Committee:
Kenneth Bugado, Susie Collins (records), Scott Enright, Violet Ishikawa, Aide Ita, Walter Ita
(co-facilitator), Tawn Keeney, Bobby LaBrie, and Robbie Pagliai (co-facilitator)
Contact number 808-962-6071
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ROCKLAND CAPITAL ENERGY INVSSTMENTS~ LLC
2204 Tft&cdoih Ftn
sake 390
.hewoodWaa4 TX77380
Pho .632-8660035
832.585-0101 CoWeatral
F.u
July 26, 2005
Draft
Tredewinds, LLC
2574 Northwest Thurman Street
Portland. Oregon 97210
Attention: Don Bryan
Dear Don:
Ibis letter sets forth the intent of Rockland Capital Bnergy Investments, or
an affiliate ("Rockland'j to provide up to $1.300,000 but not less than $700,000 of equi ' capital
to Tradewinds, LLC (or a newly-forr ned substituted entity) for development of the Tra( ds
Veneer Mill and Cogeneration Facility located on the Island of Hawaii (the "ProjecC7. pan
of the arrangements. Tradewinds intends to execute fee and management arrangements th Don
Bryan (the "Developer" or "Managemenfl. The Parties acknowledge that T is in
discussions with other investors for the provision of up to $600,000 of equity capital 'Vffier
Phase I Investmej.
The significant terms of this letter of intent are as follows:
1. Terms. The principal tam of the proposed atrangemen would
be as set forth in Annex A.
2. fiat; Areements The proposed arrangements would be eted in
accordance with terms and conditions to be set forth in definitive agreements ing the
aaaegornents which shall be satisfactory in farm and substance to Rockland, ds, the
Developer and the Other Phase I investors (the "Equity Agreements").
3. Closing. The closing of the arrangements would be subject to C) tering
into the Equity Agreements, (ii) completion of Rockland's due diligence invesd with
results satisfactory to Rockland, {iii) obtaining final investor approval with Rockland "vectors
and Board, (iv) format approval from the State of Hawaii acknowledging that the makes
Timber Contract is in full force and effect, including an extension of the Phase H g
deadline satisfactory to Rockland. The parties contemplate that the Equity Agreements cold be
executed after completion of (ii) and (iii) above which is expected prim to July 2gw, d will
close after Tradewinds receives formal Stan approval mentioned in (iv), which is ex on
August 12.
oontw ex.1
A T T A C H M E N T 2
VV• Lf YM Vt. Y'ftI •
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Rockland Capital EMU InVOWD01% LLC 2
4. Arcass and Caoocraim For the period connuancing on tlx of
acceptance of this kttar of lament by Tradcwiods though the earlier of August 31, 2005 or die
dame the definitive documan an etcecused, Rockland and its nTresmh4ves will have fall
to ns&wlads and Managrmmt and their respective ofSoas, amploym. coomei,
and other enpr+a. and full opportanity to iavestigaee Tradeas' bosiaesees, propatia,
records and liabilities and to discuss 1Yadewinds' and Mauagemeaf s at5iau willh Ilea
officers, argloyea, cvansei, accanntem and cosoomars, in each case upon raeaaable notice
and during normal bushnm hours.
5. Except for the Other Phaaa I Inlbw period commencing on the dame of this letter of Went duouSb August 31, Tradewknds, Mamgesuent or any Person acting on be6aH of Tradmuds or ManasoHckt. Initiate, encourage, ewer hen or ooaduct any discussions, or saws into anor
underahg, with any omer person or madly reg. Ii g the then 6, directly or any equity irtmemst in, or a subs antial part of the im b of, Tradewmds
sir the fajoint vename a sumegic alliance tavdving Ttiadewi ndt, ar (n) dinay klto Tradasvinds or afford access to the properties, boob a o,cosds of Traderwindperson a entity that nay be considering act an in Tradewinds sir joint venpae or sumicilic altiaix involving Ttadewinds.
6. The purtim agree to keep the axissew of this
leper and Its trees confidential except as neoesary to discussion with the Other I
invatass and the State of Hawaii, Board of Land and Natural Resotmces. Neither psM b this
law dog make any pulft aooormoments about dris fakeer or the proposed >sta thoat
the commt of the otherpatty.
7. CM Tndewknds and Rockland shag each bear dtrir casts
wlabd to the proposed oraoeactian, Including tea and e' I e a of their mapecave and
fman M advise. Upon a sum closing of tiro proposed asmecaon and e$eeti of
do f mfr eommitmeas, 'hadetriods will pay all mird pasty amosacdon related
including reaaoaable legal fan and expaaes of Rockland and Th dewinds. including due to
Greg Rahalsif.
S. I.ethr of Inleut Univ. This document is an erpoessim of the ' of dte
parties only. and trothiag herein siali codas my legally binding obligation an tiro of on
party (axoept as to those matters rehered mo in paragraphs 4, 5, 6 and 7 above, whicb be
bindin NTd&w party shag have any oblipwa to pame or complete any or
stsaog<meat conmemphMed by this letter and. consequently, an such obligation si>:dl unkas
and us & mumaRy m iduk ry dtdoitive qm mass eommmi ng dre proposd equity
aaasgements"have been entered lab by Tn dmnkb said Rockland..
9. Pbase 11 KW JM adb* Rockland desires to cootribuss all equity
capital re lautid b oomplata the development and consaactiaa of the Project though the of
canmardal operations omvndy atimoled at $14 million ('Phase 9 BgmW Needs-) ,
Rockland has the kmvocable option to oaauibute 70% of the model Phm II Equity in
excbaage for 70% of a new saia of isoereat in Trmkwhxb which porcine shalt
45.596 of the motal equity inavem in T Iewinds (d w -Rana H BgAy Optiodn. The it
CmtwW
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Roddaod Capital Energy Invutme % LLC 3
Equity option wqiva 30 days aft all milessooes have baa acbkved a$owmg to
present well-developed economic faecssts to potential Phase Ii equity and debt pm viders.
lbws mn7drones incfide tie following.
a) Tmdewhwa has executed contracts to pocure all of its "
resomres n gahvd to operate one shift free days per week
b) Tradev4n& has execate d cowmts for tic We of at least of
the Project's output;
e) Tradewitds iris executed a Power Purchase Agreement witb
HELM
d) : Tradewinds has executed an Engkmdng, Pwcmvmcat sod
C nstr ucticm contract with a credit-worthy company; and
e) Tradewleft or its financial adviam has prepared
haeacial forecasts for mcclasion in debt amdkt equity
memos and Las ddhwed dww fonecasb to Rockland.
If Raddamd exercises this Phase R Equity option, then, 0) after Roddamd bas, coaldbaft its
7096 powm of such Phase R Equity Needs. Rockland shall have the fegbt m appoier as
additional two din:ctats to the Board of Dimdors of Tradewinds (the "Boatd'% and (id) u we
complK m of the funding of all of the Phase II Equity Nceds, the Board will be expandix to
an mne mbets: Three will be eppoimed by Rockland. acre by the Developer ad one by other
Phase R equity iavestots. Phase U equity will eats a psefared rew 1 of 12% ptkx to as
dkugxW= to common members.
10. At err poor to losbw
of Phase I famdimg. TnWcwinds will raswwtum the VOM enga powit Agreament 11 redeoe
by 5096 tie fee associated witb Rociddsmd's Phase H equity contrllai" 01) to "t the
appiicadva of warrants to Pbaw II equity provided by perdu oduerr than Rockland
no terms of d ds letter and the dafinitive documentation sW be cons mod in
accordance with and governed by dia haws of the Stara: of New Yost.
CWAdMW
RoddwdCapital Rwgy b we0ncn%LLC ttba
N the foregoing eccust* suromarmes ow mr~oding with respect proposed equity arm. plow deft said a eckno the doplimle wgiml of this letter cmkmd and refum Ow to the and erdgaed by SAO p. as, on 2005, after thoe it"to a wAod it *A be troll and void
vary uviy ym m
ROCICL.AND CA
LLC
DIVEM TS, Ra*
By
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Agreed to US day
ofhly,2005
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