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Arizona's first merchant plant will fire up this summer near Kingman. If this plant is any indicator of things to come, Arizona is in deep trouble.
Mohave County is on the verge of bankruptcy, thanks, critics say, to incentives and tax breaks given to the new Griffith power plant. The county's economic development board's dealings in the project are currently under investigation by the Arizona Attorney General's Office. The investigation should be finished next month.
The plant will be pulling all of its water from an aquifer that also flows under the residents of Golden Valley. Residents there were informed that county officials had made a deal with the plant's builders that gave the power plant first rights to the aquifer.
The plant will draw 8.4 million gallons per day from the aquifer, the equivalent of a city of 40,000 people. In effect, if the plant dries up wells around Golden Valley, the plant can continue to run and residents won't have water.
The Mohave County Economic Development Authority used county money to pay for the roads, water lines, wells and other infrastructure for the plant and the adjacent industrial park. However, because the development authority is a private corporation, county residents don't know how much county money went for the project.
Estimates range from $7 million to $10 million. Development authority officials won't give the figures.
The county budget in that time has gone from a $3 million surplus to a projected $3 million deficit. To raise money, the county has sold its courthouse and jail and is now leasing them back.
Accusations of financial impropriety are false, says Bill Goodale, executive director of the Authority.
And claims that the Griffith plant is a boondoggle are equally ludicrous, he says, noting that studies showed that Mohave County needed the power. And the county, he says, badly needed industry to prop up a sagging tax base.
The county's money problems, he says, are actually caused by the county's heavy population growth and subsequent infrastructure needs. He says the county needs more heavy industry, not less, to generate much-needed taxes.
"This power plant is a boon for the county," Goodale says. "There is no doubt we're doing something good for the county."
The Mohave County Economic Development Authority brokered other sweet deals for the power company.
The plant sits in what is called an "enterprise zone," meaning the plant will not have to pay sales tax on construction costs during its first year of operation.
In addition, thanks to a change in state law, the plant will also benefit from a state statute that was originally intended to help mom-and-pop entrepreneurs get started in the state. The amended statute will, in effect, cut the property taxes paid by the plant by 30 percent.
The companies that own the plant, Duke and PP&L, didn't need the help. Running at 80 percent capacity, the plant should have revenue of $1 million to $3 million per day.
Plant officials say they received nothing that other plants haven't received, according to news reports of the project.
The plant sits on land sold -- cheaply -- to the companies by Fred L. Dean. Dean was a founding member of the Mohave County Economic Development Authority. Dean now owns land by the plant.
The executive director of the Development Authority and lead promoter of the plant used to be Donald Van Brunt. But Van Brunt resigned from his position last year one month after it was discovered he had an 18-year-old felony conviction. In 1982, he had been convicted for conspiracy to manufacture $3.8 million worth of counterfeit Federal Reserve Notes.
According to testimony in the case, Van Brunt and an accomplice purchased a print shop in Santa Ana, California. The seller of the print shop became suspicious when Van Brunt, identifying himself as Mr. "Van Smutt," asked if the shop's cameras "could pick up very fine lines" and told the seller they "might have to board up the windows because they would be doing top-secret government work." A month later, Secret Service agents raided Van Brunt Enterprises Inc. Van Brunt quickly waived his Miranda rights, signed a sworn statement of his involvement in the scheme and named his accomplice.
After the revelation of his criminal past, the MCEDA board unanimously supported Van Brunt, issuing a statement that "This board, and the industrial organizations we represent, continue to maintain the greatest respect for Mr. Van Brunt."
"We supported him because he is a man of great vision," Goodale says. "He has done so much good for this county."
Van Brunt said he had paid his penalties to society for the crime and then accused political enemies of "character assassination."
Soon after Van Brunt's resignation, he was hired by Caithness to promote the company's proposed plant near Wickieup in Mohave County.
According to the residents of the tiny town, the power plant proposal has been one long series of cover-ups and half-truths.
"When we first met Van Brunt, he said he would bring all this wonderful development to Wickieup," says Corey Daniel, the owner of the town's Mobil station. "Then we asked what kind of development it was, and he said, 'Just come to the meeting.' When we got wind it was a power plant, people were just outraged.