Page 10A
NORTHWEST
East Oregonian
Saturday, October 24, 2015
MAKAD: Morrow Power’s first customer was Enron
Continued from 1A
River Bank on Aug. 6, 2001, which
MECS would end up purchasing a
year later and adding it to the total
Morrow Power owed the company.
This would not be the only time
MECS would cover a loan for
Morrow Power, according to the
lawsuit.
“On or about August 28, 2003,
Columbia advanced a second loan
to Morrow Power in the amount of
$315,000 to allow Morrow Power
to pay delinquent property taxes
to Morrow County,” Merz wrote.
“To induce Columbia to advance
the loan, (MECS) agreed to repay
the loan if the plant was not sold by
November 20, 2003. The sale did
not take place and (MECS) repaid
the loan to Columbia, again adding
... additional amount to the contract
price.”
Outside of the construction and
loan costs, MECS advanced funds
for telephone, insurance, property
taxes, pest control, electricity,
natural gas, security, maintenance
staffing and payments required
under the lease.
Six years after MECS finished
building the power plant, Merz
wrote that Morrow Power had
neither “operated the plant for any
significant period of time” nor
“made any meaningful payment”
toward its contractual obligations.
MECS pegged Morrow Power’s
total debt at $25 million.
Merz wrote that MECS encour-
aged Morrow Power to find a buyer
for the property, but despite poten-
tial purchasers expressing interest,
it did not sell.
In a memorandum in support
of a court-appointed receiver,
Pahl continued to target Morrow
Power’s financial shortcomings
while declining to explain why
the plant wasn’t running, instead
writing that reasons were “outside
the scope of this proceeding,”
“complex” and “not pertinent.”
Lawyers for Morrow Power
and MECS would spend the next
few days disputing the contrac-
tually correct way to solve the
dispute, with MECS preferring
a receiver and Morrow Power
favoring informal negotiations or
an independent panel of arbiters
experienced in construction law.
In none of Morrow Power’s
memos do they dispute defaulting
on its financial obligations, and
Pahl would write in his own memo
that Morrow Power “cannot deny
that it is in default.”
Despite being at an impasse, the
case was put to rest when the two
parties jointly filed a notice that
they settled the matter out of court
on Aug. 31, 2007.
Tawni
Camarillo,
Makad
Corp. vice president of opera-
tions, declined to comment on
the outcome of the lawsuit in an
emailed statement, although she did
add that it was “amicably resolved.”
Camarillo wrote, “without
understanding the ownership of
Morrow Power, LLC (which is
confidential) and the ultimate
internal business, economic and
tax goals of the parent company of
MECS, there is no way for anyone
to understand the lawsuit from
publicly available sources.”
“As has become fairly common,
the public often confuses allega-
tions set forth in early pleadings
with actually established facts,” she
wrote.
Questions addressed to MECS
were directed to general counsel
Michael Feuer, who did not return
a request for comment.
Contrary to a previous statement
from a Port of Morrow official and
MECS’s court filings, Camarillo
wrote the electric plant initially
generated and sold power.
Camarillo
wrote
Morrow
Power’s first customer was Enron,
which infamously declared bank-
ruptcy after being caught up in an
accounting fraud scandal.
After
the
Houston-based
company declared bankruptcy in
late 2001, Camarillo wrote Morrow
Power sold power to other orga-
nizations like Avista, a Spokane
energy company, before deciding to
“mothball” the facility.
“The economics of the Morrow
Power LLC plant were based upon
the lucrative long-term purchase
contract provided by Enron,” she
wrote. “When Enron breached the
contract and power prices dropped
dramatically, the plant became
difficult to operate on an econom-
ically sound basis.”
Although unsure of the date
it was acquired, Port of Morrow
General Manager Gary Neal said
the power plant was eventually
taken over by MECS. After it was
sold to a venture capital firm, it
was again sold over the summer
to Langenburg Technologies in
Eugene.
Camarillo also went into detail
about the fertilizer and ethanol that
never got off the ground, which
Makad Corp. officials described
in the early 2000s as future
multi-million dollar facilities with a
combined workforce of more than
150 full-time employees.
In both instances, plans were
made when those industries
boomed, only to be scrapped later
when feasibility concerns and
changes in the market made the
projects unprofitable.
Camarillo wrote Makad Corp.
moved away from large scale
industrial projects after the 2008
recession, choosing to focus on
“other core business segments
of food distribution and energy
conservation.”
With the economy improving,
Camarillo wrote that Makad Corp.
is looking into development oppor-
tunities again.
Pendleton City Manager Robb
Corbett said the city vetted Makad
Corp. by following up on a list
of projects provided to the city
by Makad, although he wouldn’t
reveal the specific projects exam-
ined.
Corbett said city employees did
contact the Port of Morrow about
Makad Corp.’s ventures, but he
would not say what port officials
told him. Corbett said he was
unaware of the lawsuit filed against
Makad Corp. in 2007. He wouldn’t
comment as to whether the lawsuit
would have factored into discussion
if the city was aware of them during
negotiations.
Gary Neal, Port of Morrow
general manager, didn’t go into
detail to describe the port’s rela-
tionship with Makad Corp., besides
saying owner Elie Makad had
an “interesting personality” and
pointing to the fact that they always
paid their rent on time.
As for the city of Pendleton, the
city offered a lucrative incentive
package to CyDat Industries LLC,
the Makad Corp. subsidiary that
will manage the data center. Makad
does not have to pay the $2,460
monthly rent until 2018.
Makad Corp. Vice President and
general counsel Allan Fulsher said
at the Oct. 6 Pendleton City Council
meeting that the corporation sought
out the rent-free period to give
officials time to perform feasibility
studies for power sources.
Although
CyDat’s
rental
payments start in 2018, it doesn’t
have to start the lease until Aug. 31,
2016. CyDat has the right to termi-
nate the lease at any time within
the first two years of the lease. The
city can also terminate the lease
in certain situations, including
instances where CyDat fails to pay
the rent or abandons the property,
in which the city could take over
any facility built on it.
Corbett said that even if the
data center fails to come together,
Makad Corp,’s interest in Pendleton
demonstrates the larger business
community’s willingness to invest
in Pendleton.
Corbett was also optimistic
on the infrastructure the city was
required to install at the project
site, which includes an in-progress
$300,000 sewer extension, a water
line extension and a gas line exten-
sion. He said that extending utilities
to Airport Road has been a longtime
goal of the city’s, and this project
helped achieve that goal, whether
CyDat would be a longterm tenant
or not.
Fulsher said at the meeting that
Makad Corp. needs two years to
perform feasibility studies and
another 18 months to build the
colocation data center, which
Makad Corp. officials estimate will
generate 45 permanent jobs.
Until construction begins,
Camarillo wrote Makad Corp. and
its various subsidiaries will not
speak with the media about the data
center.
———
Contact Antonio Sierra at
asierra@eastoregonian.com
or
541-966-0836.
Malheur County farmers Banks not ready to relinquish Braves name, logo
1,000 respondents wanted
support joining Idaho
to keep the “Braves” name,
By DILLON PILORGET
The Oregonian
By SEAN ELLIS
EO Media Group
ONTARIO — A recent
effort to create a forum where
people can discuss the idea
of eastern Oregon and Wash-
ington counties joining Idaho
was welcomed by farmers in
Oregon’s Malheur County.
If any county in the two
states is a good fit for Idaho,
it’s Malheur County, farmers
and agribusiness owners in
that county told Capital Press.
“I guarantee you we’d
be all for it,” said Kay
Riley, manager of Snake
River Produce, an onion
shipping-packing facility in
Nyssa, a few hundred yards
from Idaho. “We don’t have
anything in common with the
western part of Oregon.”
Farmers in this area grow
the same crops, are in the
same time zone and many
of the Oregon farmers have
Idaho cell phone numbers.
Malheur County farmers
and ranchers are more
conservative and identify
more politically with their
Idaho counterparts, said Shay
Myers, general manager of
Owyhee Produce, an onion
shipper-packer in Nyssa.
“Everything
about
Malheur County is more iden-
tified with Idaho,” he said. “I
wish I knew how to actually
make this happen. I wouldn’t
mind trying to help.”
The major crops grown
in this area — onions, sugar
beets, mint, seed — are grown
by farmers on both sides of
the border and the industries
are closely linked.
An onion processing
facility in Parma, Idaho, for
example, uses onions from
“There is absolutely
no way that would
ever happen, but it’s
fun to talk about.”
— Bill Buhrig,
OSU researcher
farmers in both states and
sugar beets grown in Malheur
County end up at a processing
facility in Nampa, Idaho.
“With the kind of agricul-
tural industry they have over
there, we’d take them in a
heartbeat,” said Idaho Rep.
Gayle Batt, R-Wilder.
If Idaho annexed Malheur
County, it would make life
easier for farmers who have
to deal with tougher Oregon
regulations
than
Idaho
growers do, said Paul Skeen,
president of Malheur County
Onion Growers Association.
“We would love to be in
Idaho,” he said. “Idaho is an
agriculture-friendly state and
Idaho has a governor that is
looking to help agriculture in
any way possible.”
Oregon State University
researcher
Bill
Buhrig,
who has farmed in Malheur
County all his life, said while
it’s a nice idea, the logistics
of accomplishing that are
formidable and incredibly
complex.
“There is absolutely no
way that would ever happen,
but it’s fun to talk about,” he
said.
Idaho elected officials and
representatives of the state’s
congressional delegation said
the effort has to originate
on the Oregon side but they
would be willing to help once
it got going.
FREE
FRIDAY
MEDICARE
MADNESS
Medicare Open
Enrollment
Oct. 15 - Dec. 7
Join us for this FREE event!
FREE Medicare Counseling &
Information from trained
SHIBA volunteers.
Oct. 30,
Nov. 6, 13 & 20
9:00am - 1:00pm
GSMC conference
rooms 5 & 6
(by the GS Cafeteria)
*Bring a list of all the medications you take.
For information call
(541) 667-3507
or email
shiba@gshealth.org
BANKS — Even as the
2017 deadline for changing
Native American-themed
mascots in Oregon public
schools approaches, people
in Banks are saying, “Once
a Brave, always a Brave.”
It’s a phrase they say out
loud and, increasingly, on
their shirts, declaring their
dedication to a community
that rallies around its high
school and its mascot.
“Everybody’s
trying
to get the Braves head
on as many things as
possible before we can’t
do it anymore,” said Jaime
Berning, co-president of the
Banks Middle School Parent
Teacher Organization. Her
group has been selling
T-shirts and sweatshirts
inscribed with “Banks
Braves Forever.”
The hint of defiance
in that message is not
altogether
unintentional,
AP Photo/Rick Bowmer, file
In this 2012 file photo, the Banks High School mascot
is shown on the wall of their gym in Banks.
Berning said. But so far, it
seems a message people
want to hear. The PTO’s
first shipment of 80 shirts
flew out of stock within
one week. People bought
multiple sizes for their kids
so they’d have Braves gear
to grow into.
But the Banks Braves
and their associated logo,
a Native American man’s
head in profile, will soon
be required to change along
with 14 similar mascots
in the state. The Oregon
Board of Education voted
in 2012 to ban mascots
depicting Native Americans.
As of now, school districts
like Banks have until July
1, 2017 to eliminate their
Native American mascots.
A district survey earlier
this year in Banks showed
that about 95 percent of
while about 93 percent
wanted to keep the current
logo.
“Nobody likes change,”
said Paula Jacobs, Berning’s
co-president at the middle
school PTO. “It’s going to
be a tough one to switch that
over.”
And Berning said even
if the mascot does change,
“People are still going to say
they’re Braves.”
This sort of attachment
makes sense for a town of
1,900 like Banks, said Trevor
Beard, who volunteers to
podcast all of Banks’ home
football games and most
away games, along with
some volleyball matches.
“Smaller towns, they
get attached to high school
sports really easily,” Beard
said. “Once they get attached
to a team or a mascot, it
becomes part of them. It
kind of becomes a character-
istic about the community.”
Don’t Be Left In The Dark!
Call Umatilla Electric To
Report a Street Light Out!
Umutillu Eldctric is rdsponsibld for dnsuring thut inopdrubld
strddt lights urd rdpuirdd us quickly us possibldS Rdsiddnts urd
dncourugdd to rdport strddtlight outugds in thd UEC und
Hdrmiston Endrgy Sdrvicds tdrritoridsS Thd procdss is simpldS
Iddntify thd light, dithdr by thd numbdr on thd light pold or by
thd closdst crossing strddts, und thdn cull (541) 567-6414S
Don’t be left out in the dark!