USA Springs permit expiration in question



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The argument that USA Springs' 10-year permit to withdraw 300,000 gallons of water a day out of Nottingham has expired doesn't hold water, according to an opinion by the New Hampshire Attorney General's office.The question is key because that groundwater permit is the company's major asset to secure a $55 million loan to complete the controversial water bottling plant.USA Springs said it had already spent $17 million on the effort, much of it in obtaining a 10-year permit in 2004, despite intense opposition from neighborhood and environmental groups, and that expense contributed to the company's bankruptcy filing in June 2008, leaving the bottling plant half completed.The permit would have been good until July 2014, but in the meantime, the state issued a new rule - which went into effect in October 2009 - which stated that groundwater permits would expire in five years if not activated.An attorney representing the town of Nottingham argued that this law should apply to USA Springs' permit, which would have expired in July 2009. The town's attorney said that the new rule was procedural in nature and not substantive, and therefore could be retroactive.Local environmental groups have been making similar claims, even approaching perspective buyers or lenders of USA Springs telling them that the permits they think they are buying have expired or are about to expire.But USA Springs attorney Tony Soltani argued that such a retroactive change is substantial and basically amounts from the state taking away property that the company has "vested" in.This would seriously undermine the value of the enterprise. USA Springs claims the land is worth $20 million, but the enterprise - thanks to permitting, agreements with three overseas customers and the half finished plant itself - is worth at least $100 million.At least one lender agreed and has offered a five-year $55 million loan - that the bankruptcy court has tentatively put its stamp of a approval on - for a 20 percent stake in the company.A hearing on USA Springs' bankruptcy plan is scheduled for Oct. 4.In an Aug. 4 memo to the New Hampshire Department of Environmental Services, the attorney general's office backed USA Springs, saying that the permit will remain in effect to 2014, even if it was procedural, under constitutional law.Of course, that may not be the last word on the matter. One of the parties could take the matter to court and the bankruptcy court might also take issue with that decision.In addition, there is the matter of the bottling plant permit, a five-year permit which expired in October 2005. There are town permits at issue as well. - BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

 

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