This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
More than three years ago, a waste-to-energy developer entered a deal with Sandy to construct and operate a plant on city-owned property that would turn residential trash into a clean alternative source of power.
But now Navitus Sustainable Industries has yet to make a singe monthly rent payment, commence construction, or meet various other obligations under the contract that the city once heralded as its pathway to a "zero-waste" future — a promise that has since become mired in permitting and financing hassles.
Still, the city is not ready to terminate the 20-year contract authorizing the company to develop the $100 million project, which Navitus executives say is back on track — and they're poised "to go vertical" on what would be the nation's first commercial-scale waste gasification plant.
"Sandy has asked for further information and the city is reviewing the situation to see if the conditions are correctable," said Sandy spokeswoman Nicole Martin. "Both parties have agreed to continue the discussions. Sandy and its citizens are not negatively impacted by discussing alternative waste possibilities."
Meanwhile, the city has taken down its webpage touting the Navitus project, known as the South Valley Sustainability Park.
Navitus has not once paid its monthly rent of $1,667 — about the same as for a small house in Salt Lake City. Nor has Navitus reimbursed the city the $96,000 that Sandy paid a contractor for prior work to prepare the site for an earlier proposal to build a solid-waste transfer station. Under the contract, that payment was due three years ago.
Currently the city is owed $156,000 plus interest.
—
Navitus received its long-awaited and crucial state air-quality permit in July. And for the past year, executives have told the city they want to get current on the debt, according to email exchanges obtained by The Salt Lake Tribune.
When news broke a month ago that city officials were losing patience with Navitus' failure to begin work, company officials asked to convene an "emergency" huddle with city officials, including Mayor Tom Dolan and public works chief Rick Smith.
"Navitus executives are prepared to immediately resolve concerns and bring the lease and other obligations current and in full compliance," Navitus board member Brandon Fugal wrote the mayor Sept. 6.
At the meeting two days later, the city pressed the company to explain how it would address various unmet obligations.
But for reasons that remain unclear, Navitus has yet to pay the city a nickel, nor has the city formally demanded payment.
Straight answers were not forthcoming in interviews last week with representative of both parties.
"All our agreements were tied into various milestones," CEO Heidi Thorn told The Tribune on Thursday. "The check can be written at any moment. This is part of adjusting things so that we are back on a schedule that makes sense. The major milestones we just hit are historic. ... We couldn't be more optimistic."
As the unpaid sum in question is small compared with what Navitus is spending on the project, critics believe the company's failure to pay raises questions about its willingness or ability to meet its many obligations under the contract.
—
Navitus made big promises to residents when Sandy agreed to lease the company the 5.5-acre lot that houses its public works complex at 8800 South and 700 West.
Using pyrolysis, or combustion in the absence of oxygen, Navitus' plant would cook the city's waste, yielding synthetic natural gas after 15 minutes of exposure to intense heat — all without emitting pollutants. The gas would fire an on-site electrical generator whose output would create a back-end revenue stream for the company. The arrangement would save Sandy millions each year in reduced waste-disposal costs, executives say.
"The focus was to help Sandy become the first zero-waste community in the U.S., reducing our dependency on landfilling. Caring for the environment is something we are proud of," said Fugal, chairman of the Salt Lake City real-estate investment firm CBC Advisors.
Yet Utah's environmental community has viewed the project with suspicion. Activists doubt that trash can be turned into syngas without harmful emissions and raised numerous concerns during public comment on a draft permit issued last year by the Utah Department of Environmental Quality.
In legislative hearings, company officials have said that the prolonged permitting process has undermined the project's prospects. Were it not for "unreasonable" delays, according to Fugal, a pyrolysis plant would be up and running in Sandy by now, serving as a model for the nation.
"No one should have to go through the runaround for three years. The real story is why it takes the state 31 months to issue a permit for something that should only take six months. It is typical bureaucratic baloney," he said Thursday.
DEQ officials say they couldn't begin processing Navitus' permit until after the company submitted a complete application, and that didn't happen until January 2015.
"We want them to succeed, but we want to make sure the permit has the best possible environmental protection," DEQ spokeswoman Donna Spangler said. "We can only review what we were given."
By the agency's estimation, the permit approval took 18 months, not 31. That's still a year longer than typical for a "minor source" project, but Navitus' process is anything but typical.
—
While pyrolysis technology has been around for decades, no commercial-scale plant has ever been permitted in the United States.
One issue hinged on whether the Navitus plant would be defined as an incinerator under federal guidelines. To avoid that designation, which would have resulted in onerous pollution controls, Navitus had to alter its design so that it would not fire its pyrolysis unit with the very syngas it produced, according to Bryce Bird, director of the state Division of Air Quality. Instead, it will buy natural gas.
Meanwhile, concerns arose about how Navitus would exclude hazardous substances from the plant and ensure complete combustion. Partial combustion could result in the formation of dioxins and other harmful pollutants during the pyrolysis phase.
"It is a unique facility that our engineers have not permitted before and it took some research to understand what the standards are and to make sure they were properly applied," said Bird.
Navitus answered all the questions DEQ put to it, but the back and forth took months.
Data supplied from Navitus' demonstration unit in North Carolina, for example, were not helpful, Bird noted. This research plant was developed to apply pyrolysis to woody biomass coming off national forests, while the feedstock to be used in Sandy — municipal solid waste — is varied, ranging from soiled diapers to banana peels. Recyclables would be separated out.
Thorn contends Navitus had hired a third party to run such waste through its prototype equipment and conduct stack tests.
The project also requires a solid-waste permit from the DEQ, but Navitus has yet to apply for that.
Around the time Navitus finally got its air-quality permit in July, it secured an interconnection agreement with Rocky Mountain Power, more than two years late under the terms of its contract with Sandy.
The city, meanwhile, holds out hope that Navitus can make good on its bold promises.
"If the technology is viable, and it is an Earth-friendly solution for municipal waste, then it's an option we are interested in, but it has to go through the process to make sure it is safe and viable," Martin said. "We don't want to rush this. We think the regulatory bodies should do the work they are tasked to perform."
Twitter: @brianmaffly