GRAND FORKS, N.D. (KFGO-KNOX) Fufeng USA is looking to receive $8 million in damages from the city of Grand Forks. The Chinese based company threatened the city with litigation and believes the city did not have any legal basis to terminate a development agreement for a proposed corn milling plant.
Fufeng’s demand was in a letter sent September 23rd to Brian Schmidt. Schmidt is an attorney who the North Dakota Insurance Reserve Fund appointed to the city of Grand Forks. City Attorney Dan Gaustad worked on the original development agreement with Fufeng and he was mentioned in the litigation.. The document was not made public by the city, but other media outlets were able to get a copy of the letter through open records filing.
Fufeng decided to choose Grand Forks as a possible location to build a plant in 2021 and the City Council approved a development deal in 2022. The City Council voted in 2023 to terminate the development agreement with Fufeng after several national security concerns were mentioned.
Assistant secretary to the Department of the Air Force Andrew Hunter wrote a letter to U.S. Senator. John Hoeven where he said the plant would be a “significant threat” to national security because how close it would have been located near the Grand Forks Air Force Base.
Fufeng said in response it was not considered to be a security threat by a federal entity. Fufeng USA also says the city’s decision was a violation of both the terms of its contract and the U.S. Constitution’s Commerce Clause.
Fufeng USA’s letter gave the city until today to respond to its demands. Fufeng is estimating it suffered $20.7 million in economic damages, but it is only pursuing damages from its allegations of the city violating the Commerce Clause and for breaching the contract.
The City Council held an executive session on October 5th and discussed how to handle threatened litigation. Council President Dana Sande and Mayor Brandon Bochenski both say the city will not respond to Fufeng’s demands.
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