USA Springs withdraws challenge of local authority

USA Springs has backed off its attempt to convince a bankruptcy judge to overrule state and local permit requirements, at least for now.Facing objections from the town of Nottingham and the state of New Hampshire, the company said Friday that it no longer needs the ruling to finalize a $55 million deal to resurrect a controversial plan to bottle as much as 300,000 gallons a day of groundwater and sell it to customers, mostly overseas.USA Springs filed a motion Aug. 13 to make clear that permits previously issued by the state and town are the company’s property, and it should be the court – not local government – that makes the determination of whether they are in effect or not.USA Springs said it has spent nearly a decade and almost $17 million to obtain the permits before going bankrupt in June 2008, leaving the plant half-finished. Since then, some of the permits have lapsed and others are about to lapse, a fact noted repeatedly by plant opponents to all who will listen, including potential investors in the project.The previous filing asked the court to uphold the “validity and enforceability of the permits” and that it order that agencies that granted the permit to renew those that have expired.On Aug. 24, Nottingham, which holds an expired building permit, claimed that USA was trying “to circumvent the normal permitting process created under state law to protect the public health and safety” and that there was no reason the “court should step in to subvert that process.”The town required an engineering study to determined if the structure of the building – left unprotected from the elements over two years as the project languished – was safe to support further construction.If USA Springs reapplies, the town said, it would have to meet the newer requirements of the state building code, not those in place during the original permit.The state attorney general office also planned to file a similar motion contending a bankruptcy court judge should not second-guess the state’s environmental permitting process.But USA Springs said its lender received some comfort from both the state agency and the town. On Aug. 4, the state Department of Environmental Services issued a memo saying the most important permit – the large groundwater withdrawal permit issued by the state Department of Environmental Services – won’t expire until 2014, despite an assertion by the town’s attorney that new rules require that it should have expired in 2009, because it wasn’t activated.USA Springs’ Friday motion said that it doesn’t oppose the “substance” of the town permitting procedures. More importantly, it received assurances that the lender is satisfied with the status of relative permits for the purpose of closing the $55 million loan on the project.In response, the court canceled a hearing on the permits, which had been scheduled for Sept. 3.That may not be the last word on the matter. USA Springs said it reserves the right to challenge state and town permit rulings in the future “to the extent that it becomes necessary.” — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW