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E-M:/ the last of Tondu in Manistee.......


November 3, 2005

Tondu won't appeal, city absorbs $111K

Council votes 6-0 in favor of settlement

      MANISTEE - The city agreed to swallow $111,518 in costs stemming from Tondu Corp.'s permit application for a coal-fired power plant.
      In exchange, the corporation will walk away from its federal lawsuit against the city over the city's refusal to grant a special-use permit for the plant, city officials said.
      The city council voted 6-0 Tuesday to approve the settlement, city manager Mitch Deisch said.
      "We believe this is a very good deal for the city of Manistee," he said.
      A message left at Tondu Corp. in Houston was not returned.
      Manistee Salt Works Development Corp., a Tondu subsidiary, sued the city in July 2004 for $59 million, alleging that the city discriminated against it when it rejected the 425-megawatt power plant.
      Last month, U.S. District Judge Richard Enslen ruled the company had no case and granted a motion to dismiss the suit. Tondu has now agreed not to appeal that dismissal.
      Deisch said the city spent about $32,000 to defend the lawsuit and the city's insurance company spent "a tremendous amount of money." He said he didn't know how much the insurance company paid.
      The city's zoning ordinance will be revised to clarify that a company requesting a special use permit will be required to pay consulting fees and costs stemming from a special use permit application whether the permit is approved or not, Deisch said.
      Attorney Christopher Bzdok, who represented intervening defendants Manistee Citizens for Responsible Development and Little River Band of Ottawa Indians, said the special- use permit fee was between Tondu and the city.
      "Our interest in the case was preventing the construction of an environmentally harmful coal plant," Bzdok said. "It sounds like it's all done, and we're happy to hear that."
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