Banks finance Hinkley dairy, energy farm
Futuristic complex would produce milk and cheese, ethanol and electricity
By LARRY RAND/Staff Writer
VICTORVILLE The Desert Community Bank has joined The Business Bank of St.
Louis to finance $8 million worth of development on a Hinkley dairy-energy
farm that could eventually generate 1,500 new jobs.
The money represents the first major investment by banks into the
dairy-energy farm in Hinkley, according to Buck Johns, co-developer of the
venture. The farm would churn millions of dollars into the High Desert
economy primarily by turning cow manure into power.
"This is an interesting deal," said Robert Hughling, president and chief
credit officer of Desert Community Bank. "I didn't know anything about the
dairy industry in California when I started, but I know now.
"The project is based on present operating technology that is working in
various parts of the world, but ought to be the standard by which the dairy
industry is run in the U.S. To have that in our back yard is fascinating
it's political, not just economic."
Johns, co-developer of the High Desert Power Project, a 750-megawatt power
plant in Victorville, said the $8 million investment will be enough to pay
for much of the pre-construction costs. It will pay the permitting costs and
consolidate any indebtedness on the land and water rights, plus cover the
costs of starting the environmental studies, Johns said.
Johns envisions 30 $10 million dairy barns, each owned by a different
dairyman, that would hold 90,000 cows kept indoors in a hygienic
environment, with bovine waste rinsed every four hours into a $100 million
manure cooker. The methane produced by the cooker would produce commercial
power from a $50 million, 49 megawatt gas turbine generator.
The cows would feed on distiller's grain, the corn leftovers from a $50
million factory on the Hinkley site that would produce ethanol, a gasoline
additive since 2003 in California. A $50 million Scott's fertilizer plant on
the site will use the cooked cow manure, a $50 million cheese factory will
use some of the milk, and the rest of the milk would go to markets like Las
Vegas and Los Angeles. There would be a meat packing facility on the
premises, too.
The dairy operation aims to eliminate the pollution and health risks
associated with traditional dairy farming.
Agriculture is a major factor in the San Bernardino County economy, with a
yearly value of more than $600 million, according to a county agricultural
commissioner's report. The High Desert has traditionally generated about 10
percent of the value.
Hughling said that his bank was the logical local business bank to
participate in the Hinkley project, because of its knowledge of local land
and water rights, and credited bank director Terry Caldwell, Victorville's
mayor, for urging participation.
The lead bank, Business Bank of St. Louis, is located in Clayton, a suburb
of St. Louis. It was brought into the project by Midwestern investors Rick
Mahue and his brother Wally Senney. Mahue had business experience with
Johns' co-developer, Henry Orlosky of Sacramento, who owned the land and
water rights in Hinkley. Both Orlosky and Mahue had run companies that sold
dental tools.
"Business Bank of St. Louis is a young, aggressive bank," said Mahue on
Thursday in a telephone interview. "In only two years, they have taken their
original $10 million in assets to more than $150 million. Their second
public offering just oversold."
Johns expected quick action now that initial funding has been approved.
"We expect the funds to be released in about three weeks," he said. "Shortly
thereafter, we'll make application to the county; there are no state
applications, because the energy plant is less than 50 megawatts. The
environmental studies will begin, and the architect will make some rough
designs to show prospective tenants."
The architect for the dairy-energy farm will be Eric Lloyd Wright, grandson
of Frank Lloyd Wright.
"There will be a Frank Lloyd Wright flavor and an organic feel to everything
we do," Johns said. "We are trying to elevate all of this. This is a
once-in-a-lifetime opportunity, and we want to do something that we can look
back on and say, 'we did something spectacular.' We understand that we are
going to be the standard by which others are measured."
Orlosky echoed the others' lofty ambitions.
"I'm kind of a guy who is a visionary," he said Friday. "I want us to do
things that are different and cleaner. I am certainly a capitalist and would
like to profit from development, but if you can do a project for the right
reasons, to clean up air and water and enhance the quality of life for
dairymen and workers, that's great."
Paul Tracy of Victorville, regional sales manager for DeLaval, the world's
oldest and largest producer of dairy equipment, said, "When I saw this
project, I said, this is the next generation. It's fascinating I read
about it in the Daily Press on Sunday, and by noon Monday I was talking with
Buck Johns. My company is going to outfit a demonstration barn to show
dairymen how it will work."
The primary market for the condominium-style Hinkley dairy complex is the
Chino dairy district, where land has become too valuable to farm and
neighbors are increasingly upset with the polluting aspects of traditional
dairy operations. There are more than 200 dairies in Chino. Johns, Orlosky
and company need only 30 of them to move to Hinkley.
Johns already has the dairy's neighbor in mind. Next to the dairy complex
would be a $300 million solar/geothermal power plant that Johns said already
is generating interest from Southern California Edison and municipal
utilities.
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Larry Rand can be reached at larry_rand@link.freedom.com or 951-6232.
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Gene Schriefer
Shepherd
Dodgeville, Wisconsin USA
Commercial Texel-x and Charollais-x Sheep
