Tuesday, August 28, 2018

UW Oshkosh Foundation fetches higher than expected price for Rosendale biodigester

Photo by Brian Kermath for the University of Wisconsin Oshkosh
Huge digestion tanks are at the heart of a system designed to turn cow manure into biogas at Rosendale Dairy.
By Miles Maguire

In a surprise development, the biodigester that the UW Oshkosh Foundation built in Rosendale attracted a flurry of bids this week and may have fetched a price close to the $8.5 million in liabilities the facility has accumulated.

Fond du Lac County Judge Richard Nuss confirmed the results Tuesday of an auction for the biodigester without entering into the record the amount of the winning bid.

It was “a very aggressive and very successful process that was undertaken” to auction the biodigester, Judge Nuss said. “My compliments.”

Assuming that the transaction closes, which is expected to happen early next month, the proceeds from the sale could go a long way toward resolving the financial difficulties of the Oshkosh foundation.

When it filed for bankruptcy last year, the foundation listed a $6.7 million guaranty on the biodigester to Madison-based First Business Bank as its largest unsecured debt. Total liabilities were put at $16 million at the time.

The auction “was very successful,” said Timothy C. Mulloy, chairman of the foundation’s board. “We’re very pleased.” He said the precise amount of the winning bid will be disclosed in a joint statement from the auction participants within a few days.

The foundation had been prepared to accept a bid as low as $2 million, but the winning offer was a multiple of that amount, Mulloy said.

The auction was conducted Monday by Fond du Lac lawyer William B. Everson, who had been appointed as receiver for the biodigester. He said that four bidders participated through 36 “very robust” rounds over a five-hour period.

The winning bidder is REV LNG, a Pennsylvania company that specializes in the distribution of liquified natural gas and related products. The company was in the news recently as a participant in a project to ship refined biogas from a dairy in Kewaunee County to California.

The biodigester operates at Rosendale Dairy, whose 8,000-plus cows make it the largest milk producing farm in the state.

When it opened in 2013, the manure-converting plant was seen as an important step forward in securing energy independence for the university and in preparing students for jobs in green industries.

But the foundation and former university leaders have since come under criticism for undertaking the project. Two former officials face civil and criminal charges for their actions in arranging the financing.

This week’s auction greatly reduces the university’s and state’s exposure to financial liability. While the Rosendale biodigester had been seen as a “white elephant” for the university, the winning bid suggests that the facility had greater value than had been recognized.

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