In Searsport

Planning Board deems LPG tank application complete

Opposition lawyers: What's in a name?
By Tanya Mitchell | Oct 09, 2012
Photo by: Tanya Mitchell Thanks But No Tank and Islesboro Island Trust attorney Steve Hinchman, right, questions the decision of the Searsport Planning Board to deem the application of DCP Midstream complete Monday night, Oct. 8.

Searsport — The Searsport Planning Board ruled that the application from Colorado-based DCP Midstream was complete Monday, Oct. 8, a finding that fueled questions from the opposition about the true identity — and by extension, the legal responsibility — of the applicant.

The decision came nearly four months after town planners deemed the company's application for a proposed 22.7-million-gallon liquefied petroleum gas storage tank at Mack Point incomplete for lack of a permit from the Maine Fuel Board.

Monday night, Planning Board Chairman Bruce Probert announced that DCP Midstream had secured the state fuel board permit on Sept. 5.

Planning Board member Brian Callahan moved to find the application complete, based on that development, and after some brief discussion, the board approved Callahan's motion 5-0.

Hypothetically speaking: About those names

Thanks But No Tank and Islesboro Island Trust attorney Steve Hinchman took issue with the Board's decision and outlined his concerns in a 13-page letter he sent the Board ahead of Monday's meeting. In his letter, Hinchman contended that the application lacks proof of the financial capacity of the applicant, which is listed in town documents as "DCP Searsport LLC."

"DCP Searsport LLC is the Applicant seeking permits from the Searsport Planning Board for the construction of a 22.7-million-gallon LPG bulk storage tank facility and import terminal at Mack Point," stated Hinchman in his letter. "DCP Searsport LLC is a foreign limited liability company, organized under the laws of the State of Delaware and registered to do business in the State of Maine. DCP Searsport LLC is a separate legal entity from DCP Midstream LLC, DCP Midstream LP, DCP Midstream Partners, LP and DCP Midstream Operating, LP. To date, no proof of financial capacity has been submitted to this Planning Board demonstrating adequate financial capacity of DCP Searsport LLC to meet the Performance Standards under Section VI of Searsport's Site Plan Review Ordinance."

Adhering to Probert's reminder that no public comment may specifically refer to a pending application, Hinchman also spoke to what he described as the company's lack of ownership or right to use the swath of land on which the tank is to be built. Hinchman said if he, for example, proposed to open a beauty product store on land in Searsport deeded to his father, the board would seek written documentation that he has permission to use the land for his business. Hinchman urged the board to secure the same type of documentation from DCP Searsport LLC.

"Either you have title, you have a right, or you don't," said Hinchman.

Hinchman said it is common for large corporations to engage in an activity known as "ring fencing," where those corporations create limited liability companies to "insulate shareholders from any personal responsibility for the corporation's or entity's actions."

Probert told Hinchman the board was aware of the concerns Hinchman raised and said, "There are times to do this."

"The action you just took is illegal," said Hinchman regarding the board's decision on the completeness of the application.

Islesboro resident Kim Tucker, a former Mississippi Special Assistant Attorney General and 17-year veteran of the Florida Attorney General's Office who also works with Hinchman, agreed with Hinchman's assessment.

"I have intimate knowledge of the problem of corporations hiding behind a corporate structure to limit liabilities," she said.

Tucker said that problem arose in the aftermath of the BP oil spill in the Gulf of Mexico in the spring of 2010. While the "egregious behavior of employees" on the day of the accident made it easier for states to go after BP, she said, it is typically very difficult to pierce the veil that exists between LLCs and large corporations.

"I implore this body to take a very serious, precise look at who owns what," she said.

The 'when' and 'how' of public hearings

Town ordinances call for the board to hold public hearings within 30 days of deeming an application complete, but Probert suggested the board consider a motion to extend that timeframe out to the end of November to allow pending studies to be completed. Probert noted that the board has yet to receive the economic impact study from Fannon Evaluations Group of Portland, a study the board asked DCP to obtain to assist in the decision-making process, which will not likely be completed until mid-November. Also, Probert said, IIT is still awaiting the findings of an independent all-hazards risk assessment from Good Harbor Techmark. In August, IIT commissioned Good Harbor to identify potential intentional, natural and accidental threats to a fuel storage facility of the proposed scale, as well as vulnerabilities associated with the 24-acre project site.

Hinchman said Good Harbor staff will be in Searsport later this week to conduct on-site research, and then will meet with various technical experts.

"They don't expect to be ready before the end of the month," said Hinchman. "I would say mid-November would be the earliest date."

When Probert called on the applicant to weigh in on the scheduling discussion, DCP attorney Kelly Boden of the Portland-based law firm Verrill Dana said the company would agree to a "reasonable" extension. Boden went on to say the company has no issue holding off on the public hearings for studies the town asked DCP to obtain, but reminded the Board that the Good Harbor study was commissioned by an outside party.

"I would like that not to hold up the hearing," she said, adding that the end of November was acceptable.

After some additional discussion, the board agreed to hold public hearings sometime during the week of Nov. 26, depending on the availability of a large enough venue.

There was also some discussion about how those public hearings would be conducted. Searsport Planning Board attorney Kristin Collins presented a set of rules the board could use to ensure that the public hearings will allow residents to speak about their concerns while also making sure the board obtains only the information it needs to make a final decision on the tank application.

Among the questions the board had regarding the proposed rules were what constitutes an "interested party," versus a member of the general public. Board members raised those questions after Collins explained that at a public hearing, the applicant would make a presentation and then "interested parties" can make their own presentations, as well as cross-examine the applicant. Members of the general public, Collins said, could speak at the end of that process.

An "interested party," said Collins, is defined as a person or group that can show more evidence beyond what the board has already heard that demonstrates how and why the project would particularly impact them.

"Do they have a chance to be harmed by this project more than anyone else in town, or in the region," said Collins. "At the end of the day, it's up to the board to decide what's relevant and what's not."

Collins suggested the board could ask those seeking to present as interested parties to file a brief with the board outlining their position 14 days ahead of the hearing. Collins said that would avoid the need for the board to make determinations on who is an interested party on the night of the hearing. Callahan asked if the board could still consider someone as an interested party if they showed up on the night of the hearing but had not filed a brief, and Collins said, "it's not a hard and fast rule."

"The goal is just to try to keep this as circus-free as possible," said Collins.

"It'll be nice to get as much information as we can ahead of time," said Probert.

"This is not going to be a really strict process," said Collins, noting that the rules do not bar a member of the public from speaking more than once at a hearing. "... Keep in mind, everyone is going to have a chance to speak."

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