MOORHEAD — The Moorhead City Council took a step toward selling city-owned property to a business hoping to use the land for a $5 billion facility.
During its meeting Monday, Sept. 8, city council members voted unanimously to authorize city staff to enter into an option agreement with DG Fuels, a sustainable aviation fuel company that has expressed interest in building a $5 billion production facility in Moorhead. Council member Lisa Borgen was not at the meeting.
In November 2024, Washington, D.C.-based DG Fuels announced it had picked Moorhead as the site of a facility to produce low-carbon aviation fuel. The proposed facility will produce around 193 million gallons of fuel annually, according to the company’s announcement. Production is expected to begin in 2030.
The plant would use biomass, including materials left in the field after corn harvest and timber waste, to produce near-zero carbon fuel, the announcement said.
Derrick LaPoint, president and CEO of Downtown Moorhead Inc., told The Forum the agreement will allow DG Fuels to hold the land. Through the agreement, the city of Moorhead will not be able to sell the land to another party without notifying DG Fuels, he explained.
“It’s really a tactic to allow time for them to do due diligence on the land, check on permitting and environmental and all that kind of stuff,” LaPoint said. “Then ultimately, if that’s satisfying to them, then we work towards entering a purchase agreement with them.”
DG Fuels is interested in a tract of land that stretches from Moorhead’s new industrial park to the Moorhead Municipal Airport. According to LaPoint, the parcel includes 554 acres of land.
LaPoint told city council members that DG Fuels Chairman Michael Darcy requested the agreement as part of an application for federal Energy Department tax credits. To continue with the application, the company has to show site control, he said.
“We feel that this is low risk to the city of Moorhead,” LaPoint said. “We feel that this is a great first step and really kind of securing some time and due diligence needed to make sure that this project can move forward in a real detailed way.”
In the coming months, the city will explore details of the proposed development, including its size, timeline and infrastructure needs, like power, water and wastewater, LaPoint said.
There is a payment tied to the agreement, LaPoint said, but an amount has not yet been finalized. If DG Fuels decides to purchase the property, the payment will be applied to the purchase price, according to the City Council packet.
LaPoint said the agreement will be for 12 months, but will be extendable.
DG Fuels did not respond to a request for comment.