Exclusive | Tri-Citian who lost millions in Pasco biofuel scam wants to turn site into brewery
When a Pasco biofuel founder’s fraud collapsed, James Osterloh was left holding the bag for $4.4 million.
Now Osterloh, a West Richland concrete contractor, is brewing up an idea to bring the site back to life.
The Green Power biofuel facility in the Port of Pasco was at the center of a multi-million scheme, but it could soon be reborn as a brewery built by some of the people who lost millions to the man behind the scam.
An environmental impact study filed with the state of Washington shows that Richland Panda Holding LLC wants to turn the former facility in Pasco into a two-story micro-brewery and brewpub called Big Iron Brewery.
They also plan to later add a 4,000-square-foot fermentation and bottling plant next to the brewpub.
Panda Holding, co-owned by Osterloh, submitted preliminary site plans last month for the proposed project to be built on East Cargo Street in the Big Pasco Industrial Center.
The Port of Pasco, which leases the land, said it’s a plan that has been on the radar for awhile.
Port Director Randy Hayden said he’s glad to see something good come of that sore spot.
“It’s been in the works for a couple years. Our thought was we’d like this taken down, but (Osterloh) said rather than taking it down, he’d like to turn at least part of it into a brewpub,” Hayden said. “Because of the views of the river and you could have a real industrial vibe to it, it would definitely be a unique vibe for a brewpub anywhere. We wanted to support his entrepreneurial idea.”
Osterloh wasn’t ready to talk about his project but he’s sure to find demand for a restaurant and brewery with more than 600 people working at the 50 businesses in the Big Pasco area.
And, starting this fall, 1,500 more employees are expected to start work nearby at two massive Amazon distribution warehouses.
The port also has big plans for turning Osprey Pointe into a gathering place with an indoor market, and it is just a short walk to the Columbia River and the Sacajawea Heritage Trail.
The environmental study also indicated that they plan to build the facilities with “green roofs” that are essentially 4-inch planters with grass and grain. Some of the hops used in brewing also will be grown on site.
From the ashes
Osterloh was one of the plaintiffs who sued Green Power founder Michael P. Spitzauer for millions of dollars owed in 2014, stemming from work Osterloh did as head electrician on the project and his company Concrete Solutions.
Osterloh was looking to recoup $4.4 million after Spitzauer was federally indicted on allegations of wire and bank fraud, aggravated identity theft, money laundering, tax evasion and lying on a federal tax return.
He formed Panda Holding with Jose Gonzalez in 2014. Gonzalez was another debtor, owed more than $1 million for work done by his company American Electric.
At an auction that year, Panda Holding put a $2.5 million bid on the facility, looking to recoup their money from selling the plant and property of the defunct company.
Hayden said Panda Holding took over the land lease once the legal issues were out of the way. The port was able to avoid significant losses.
“When there started to be some cash flow issues we had (Spitzauer) pay a year in advance, and we also had a deposit, so we were really made whole by that,” Hayden said.
He said the ordeal was particularly disappointing because the idea behind the facility was promising, and a good team was taken advantage of.
Spitzauer was sentenced to federal prison in 2015 and released in 2018. At the time Green Power and Spitzauer owed $36 million to about 40 creditors. He was ordered to pay restitution of nearly $13 million to the victims and nearly $2.6 million to the IRS.
In 2019, Spitzauer, who was born in Austria, was sentenced to another three years in prison for the aggravated identity theft charges. Court documents revealed he had stolen the identity of a Texas baby who lived less than 24 hours to prove U.S. citizenship in his application for a passport.
Spitzauer was released from federal prison on Oct. 2, 2020.
He was in the St. Clair County Jail in Michigan through at least May 2021 while awaiting a deportation hearing. That hearing was eventually dismissed.
This story was originally published March 6, 2022 at 5:00 AM.
