I urge the Board of Supervisors to support the Upper Lake Community's appeal of this use permit, place the required Conservation Easement on the proposed project site, and terminate the lease with Scotts Valley Energy Corporation. The lease is a direct violation of SAP Contract # 4600003318 and the County's purchase agreement with the State for this parcel.

According to the "Specific Award Conditions" for EDA Award No. 07-79-07842 (the grant funding this project), the Recipient must ensure the following:

"19. EVIDENCE OF GOOD TITLE: Prior to solicitation for construction bids, the Recipient shall provide an opinion of counsel, satisfactory to EDA, that the Recipient has acquired good and marketable title to land, free of all encumbrances, to all real property necessary for completion of the project, as well as any necessary rights-of-way, easements, State or local government permits, or long-term lease interests necessary for the completion of the project, in accordance with 13 CFR part 314."

"36. ACQUISITION OF LEASEHOLD INTEREST: Recipient has provided EDA with a draft lease between itself and the owner of the Project Property, Lake County Watershed Protection District (the “District”) and a Board Resolution from the District approving the lease of the Project
Property to the Recipient. Recipient hereby agrees that within 120 days of this Award, as may be extended in writing by the EDA Project Officer, the Recipient shall furnish to EDA evidence satisfactory to EDA at EDA’s sole discretion of the execution and recording of a final Lease (the
“Lease”) between itself and the District. Recipient hereby further agrees that the Lease will comply with EDA’s regulations and the terms of the Award, including but not limited to 13 C.F.R. § 314.7 and EDA’s Standard Terms and Conditions for Construction Projects, March 22, 2021 §
H. EDA, in its sole discretion will determine whether the Lease is satisfactory for the Award. Recipient further agrees that the Lease will be recorded in the appropriate and customary place and manner for property records in the location of the Project Property. In no event may Recipient advertise for bids for construction until EDA has received and approved of all documentation of the executed and recorded Lease and given Recipient approval to begin to advertise for construction contracts."

The details on the Applicant's "EDA Site Certificate Form 05-16" and the list of easements on the proposed project site (source: Board of Supervisors September 10, 2024 agenda File #24-877) failed to include the purchase agreement with the California Department of Water Resources (SAP Contract # 4600003318) and the impending Conservation Easement Deed that must be placed on this parcel (APN # 004-010-040-000). According to the purchase agreement, "The District's Responsibilities" under item "M" (pages 3-4) state: "Where the District acquires property in fee title or funds improvements to property already owned in fee by the District using grant funds provided through this Agreement, an appropriate easement providing for non-structural flood benefits and wildlife habitat preservation shall be simultaneously conveyed to a regulatory or trustee agency or conservation group acceptable to the State. An example of such an easement is attached as Exhibit E."

To date, only two Conservation Easement Deeds have been submitted by the Lake County Watershed Protection District to the California Department of Fish and Game Wildlife Conservation Board as required when the District uses State taxpayer funds to purchase real property for the Middle Creek Flood Damage Reduction and Ecosystem Restoration Project. Both conservation easements filed by LCWPD provide a list of "Prohibited Uses" and specifically prohibit "Commercial or industrial uses" of land purchased under the Middle Creek Project. When the LCWPD files the Conservation Easement Deed for 755 East State Highway 20, Upper Lake, CA (APN # 004-010-040-000) in compliance with the purchase agreement, we expect it will have the same restrictions as other parcels purchased under the Middle Creek Project.

If the Lake County Watershed Protection District had placed the required Conservation Easement Deed on the property in a timely manner upon purchase, the application for a major use permit on this site would not have progressed to this point. If the Conservation Easement Deed was in place as required, the Lake County Watershed Protection District also would not have entered into a 10+ year lease with a third-party entity for a commercial and industrial wood processing project. The County's failure to comply with SAP Contract # 4600003318 contributed to the false and inaccurate information provided by the Applicant to comply with the EDA's "Evidence of Good Title" and "Acquisition of Leasehold Interest" award conditions.

While the title of the use permit suggests this is simply an agricultural "AG" project, the application for the EDA grant describes a commercial and industrial project that once "fully operational" is expected to "directly generate approximately $1.9 million per year in total revenues" through the following:

"Biochar: $340,065/yr
Bundled Firewood: $750,000/yr
Other Bioenergy Based Fuel: $261,645/yr
Decorative Wood Chips: $26,786/yr
Compost Mulch: $50,000/yr
Intermediate Wood Products: $475,000/yr
Total: $1,903,496/yr"

The application goes on to state, "the project will also serve as a regional catalyst for the development of an effective forest thinning management industry, and downstream wood products production and usage." The "sale of intermediate wood products will also support downstream industry
development, where quality, consistently sized wood chips produced on site can be used to produce high value engineered woods and related products."

This is clearly an industrial project that should be located on a site zoned for industrial use. This project should not be permitted on property purchased with taxpayer funds "to protect or enhance flood protection corridors while preserving or enhancing wildlife values of the real property," especially near a waterway that drains directly into Rodman Slough. Another requirement in the EDA's Specific Award Conditions states:

"31. WETLANDS PROTECTION: The project shall be designed to keep at least a 100-foot buffer between construction activities and wetland areas. Construction best management practices shall be used to avoid impacts to adjacent wetlands."

According to the "Construction Details" and "Driveway Access and Improvements" sections of the Initial Study, the 1000-foot access road that runs down the west side of the property from Highway 20 to the project site must be widened, graded, and resurfaced with additional gravel and plastic pavers. This access road runs parallel to the waterway on the west property line that drains directly into Rodman Slough. In some areas the road is only 9 feet from the waterway, but always within 20 feet of the waterway. The project plans and CEQA documents fail to include a 100-foot buffer between the waterway on the west side of the property and the construction activities needed to improve the 1000-foot access road, as required by the EDA's Specific Award Conditions. While the Applicant, Thomas Jordan, has stated "the water channel is located outside of the area leased," it is actually less than 20 feet from the road. CEQA requires the project to consider the "whole of the project" including direct and indirect impacts on the environment. The waterway that runs down the west side of the property cannot be ignored.