US city tries to avoid legal battle after cancelling Chinese corn mill project in North Dakota

Under the standstill agreement, the two sides have 90 days to come to terms and forestall what would likely be a long and costly legal fight.

But despite the vote, some city officials are questioning the move and demanding that Fufeng USA return the costs the city incurred on the project.

City Council member Rebecca Osowski was one of those expressing her frustration. “I guess I just don’t understand what we’re trying to come to an agreement on,” she said during a recent council meeting.

“Fufeng was deemed a national security threat so we terminate the agreement; we get our money back.”

City Attorney Dan Gaustad said the 90-day window for negotiations would including a discussion about what Fufeng USA planned to do with the land, which it bought from a private individual in 2021. “It’s more than getting money back … they still own property,” Gaustad said.

Fufeng USA has not spoken publicly about possibly selling the land to an American company or transferring the development agreement to a third party. A company representative did not respond to a request for a comment.

The Fufeng project secured a preliminary approval by the city administration in November 2021 and was hailed as an economic boon for the local community.

In the ensuing months, the local authorities defended the decision in the face of mounting public opposition over the company’s Chinese ownership.

Fufeng’s corn milling plant would have been about 12 miles east of Grand Forks Air Force Base. Map: SMCP

Fufeng’s corn milling plant would have been about 12 miles east of Grand Forks Air Force Base. Map: SMCP

In December last year, the city administration welcomed a federal clearance of Fufeng’s investment in Grand Forks as “positive feedback”. But in a surprising reversal last month, the officials claimed they had been “long unaware” of Fufeng’s Chinese origins.

Some beleaguered local officials have dodged calls to resign for initially approving what some residents suspect would have been a “nest of spies” acting at the behest of “Communist China”, and residents’ displeasure has not abated in the aftermath of the failed project.

Speaking at a City Council meeting last month, Dennis Kadlec urged the city mayor to “do the right thing”.

“Be a leader,” he said. “Fire the people you need to fire.”

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