Chuck Haralson and Ken Smith were inducted into the Arkansas Tourism Hall of Fame during the 43rd annual Governor’s Conference on Tourism
Things have not gone well for Camden in recent years — for most of South Arkansas, really — but they seemed to be looking up last summer. State and federal officials turned out for a ground-breaking ceremony for a new plant, in a town that has grown more accustomed to plant closings. The new plant possessed symbolic significance too, in that it would be on the old International Paper Company property. From 1927 until it closed in 2000, the IP paper mill was a major employer in Camden. More than a thousand people lost their jobs when the mill shut down. (Also shut down was the plant's strong odor, but Camden residents never noticed the smell anyway. Visitors did.)
The new plant would also be part of the fashionable "green" movement, intended to help 21st century America move away from foreign and dirty sources of energy, into the clean-energy uplands. Here was industrial development that was good for the economy and good for the environment. Cheering was prevalent.
No one was happier or prouder last Aug. 13 than Camden Mayor Chris Claybaker. "I'm the one that first talked with Phoenix [Renewable Energy] and convinced them they should locate on this old IP site," Claybaker said in a recent interview. "We felt something like this would help turn us around — not a panacea but a good step in the right direction."
A year later, all stepping has ceased. There's been no construction on the proposed new plant — June 4 was a projected starting date that passed unobserved — and Phoenix has yet to obtain the final approval it seeks from state environmental-quality officials under the "brownfield" program. That final approval won't be given until some rather expensive work has been done to remove contaminants left over from the paper mill operations. Presumably, the money would have to come from Phoenix or from the Camden Area Industrial Development Corp., which now owns the IP property and is leasing it to Phoenix.
Even worse, the state securities commissioner determined that Phoenix was selling stock in violation of state law and ordered it to stop. Investigation is continuing.
And, certain information about Phoenix executives that might have aroused suspicion had it been known earlier has now come to light. Skepticism is growing that the Phoenix plant will ever become operational, much less be the boon that was hoped for.
The situation has become a "nightmare," Claybaker told the Arkansas Times, before he stopped returning our phone calls.
Some 400 people were on hand at the groundbreaking Aug. 13, 2009, according to a news release. They'd been told that Phoenix would build a $180 million wood-pellet plant on 44 acres of the old IP property, and that the pellets would be shipped to Europe where "cap-and-trade" laws forced the burning of pellets instead of coal to generate electricity. The plant would employ up to 60 people, it was said, and create 450 more jobs in timber, transportation and other industries that would serve the plant.
Among the officials who spoke at the ceremony were U.S. Sen. Mark Pryor and U.S. Rep. Mike Ross, who is a vocal supporter of biomass, such as wood pellets. Pryor, whose family has deep roots in Camden, said that South Arkansas needed clean-energy jobs. Representatives of environmental groups — the Sierra Club, the Audubon Society — were on hand, some waving "Clean Energy" signs. Gov. Mike Beebe sent a representative to the event, as did U.S. Sen. Blanche Lincoln, who also issued a statement from Washington: "Phoenix Renewable Energy is poised to help make our state a leader in renewable energy production." (Spokesmen for Pryor, Lincoln, Ross and Beebe say they were invited by Mayor Claybaker and others, and that they routinely attend or comment on industrial groundbreakings.)
A featured speaker at the ceremony was Sam L. Anderson of Hot Springs, CEO of Phoenix Renewable Energy. He said two things made the new plant possible: a change of administration in Washington, and the European cap-and-trade laws requiring the use of clean energy.
"I believe if it were not for the Obama administration's stimulus plan (and) concept of a new economy, the business we're about to engage in would not be profitable," Anderson said, adding that the American business community should be more positive about cap and trade.
"Those Phoenix guys are infectious in their enthusiasm," Claybaker told the Times. It's unclear whether he knew last August of Anderson's background; it's safe to assume that many of those in attendance did not. A Phoenix brochure says, "Mr. Anderson, a founding member of Phoenix Renewable Energy with many years as a practicing attorney, oversees all aspects of the company." A casual reader might think that Anderson is still a practicing attorney, but no. He lost his license in December 1986, after being convicted in 1985 of distributing cocaine. Roger Clinton, brother of the then-governor, was convicted in the same case. Anderson was quoted in the newspaper at the time as saying that State Police were out to get him because of some of the clients he'd represented. He did time in federal prison and was released in December 1987.
Another Phoenix official listed in the brochure is "Steve Walker, Director of Development." In May, state Securities Commissioner Heath Abshure ordered Phoenix and Stephen R. Walker to stop soliciting and selling securities in violation of the Arkansas Securities Act. The order said that the securities sold by Walker and PRE were neither registered nor exempt from registration as required by the Securities Act. In addition, Walker violated the Act by soliciting and selling the securities without being registered with the Securities Department himself, Abshure said. The order said that more than 50 people had invested in Phoenix, with some $1.4 million invested in 2009 and 2010. During the same time period, the company had expenditures of about $1.4 million, with over $250,000 in payments made directly to Walker and over $80,000 in payments to Anderson, his companies and his family, according to Abshure. The Securities Department is continuing its investigation of the matter.
Anderson told the Times that the securities commissioner's order wouldn't stop construction of the Camden plant. Phoenix will simply have to find another way to raise money, he said. "We think we can stay in business without selling stock. We'll do whatever we need to do."
More bad news for Walker came in June. He was indicted in federal court on charges of income tax evasion and failure to pay taxes. It was reported also that in 2009 he'd agreed to pay $410,000 to settle a civil lawsuit that accused him of fraud.
Camden had a population of 13,154 in the last census, Claybaker said. He expects the figure to be nearer 12,000 in the new census, continuing a downward trend. "The school district has taken a big hit with loss of students," Claybaker said. "Forty to 60 new industrial jobs would be important to a town that's lost so many industrial jobs. We felt something like this new plant would help turn us around."
"Biomass" and "brownfields" are buzz words in the environmental movement, and both apply to the situation in Camden. Biomass is biological material, such as wood, that can be used as a renewable energy source. Phoenix plans to use wood to make pellets that would then be sold as fuel. Some environmentalists have questions about biomass, but it's recognized as a cleaner energy source than coal.
Glen Hooks of the Little Rock office of the Sierra Club said, "We generally support biomass as long as it's done in a sustainable way. We understand that Phoenix plans to use wastewood, and wouldn't be cutting down old-growth forests. We support things like that over coal." Hooks has on his desk a bag of pellets given out by Phoenix for promotional purposes, but he said he hadn't heard anything about the proposed Camden plant in awhile.
Claybaker says he's been going to conferences on the brownfield program for years, and thought Phoenix would be a good fit. The idea is to re-use old industrial property, rather than green space, for new industrial purposes. The federal Environmental Protection Agency defines brownfields as "real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant." The IP property in Camden fits that definition. Phoenix is working on getting brownfields approval from the state Department of Environmental Quality. The process is taking longer than was expected, according to Anderson and Claybaker, who said he's called state officials trying to speed things up. ADEQ officials have identified the remedial actions that Phoenix must take to rid the IP property of contamination left by the paper mill. When that remediation is complete, the property can get brownfield certification, which means that Phoenix would be exempt from liability in lawsuits involving the land's previous use by International Paper.
"We were pretty ecstatic about getting this state-of-the-art 'green' system using wood from the timber around here," Claybaker said. "In talking with them [Phoenix], they seemed to know exactly what they're talking about. I was in the oil and gas business for almost 15 years. You see a lot of bullshitters. I figured I had a pretty good bullshit detector, and I didn't get that from these guys at all. They had people from Denver, New Mexico, Germany — they sure made an impression on me."
They also had political connections. Bob Mathis, a former state representative and former mayor of Hot Springs, is on the Phoenix board of directors. He's now a lobbyist in Little Rock. Another board member is Jason Willett, former chairman of the Arkansas Democratic Party.
Despite the setbacks for Phoenix, "They still give me assurances they're coming," Claybaker said. "As soon as they get approval from ADEQ, they'll start doing something. Whether it'll be to the same extent, I'm a little bit in the dark about that."
At one time, Phoenix was talking about pellet plants across South Arkansas — Monticello, Warren, Rison. That talk seems to have died out. Now, Anderson says that he still believes the market would support multiple sites, but the Camden plant "will be our first and primary site. That's the one that all the engineering has been done on. We felt like we'd made a commitment to that community."
A reporter wondered if the state Economic Development Commission, which hands out state money to new industries, had invested in Phoenix. A spokesman said no. He sounded pleased.
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