A group of local farmers and investors is considering its options after the Hampton Township board rejected the group's plan to build an ethanol plant about 10 miles southeast of Farmington.

In a unanimous vote last week, the three-member board voted not to amend its zoning rules to allow construction of a $100 million ethanol plant that project leaders said would produce about 40 million gallons of ethanol a year, using 15 million bushels of corn from surrounding farms.

Cannon River Clean Fuels, formed in April 2006, approached Hampton Township this spring with its proposal after floating the idea with officials in Cannon Falls and Randolph Township. The company also considered two sites near Hager City, Wis., and a location near Red Wing, said company chairwoman Lynnea Sjoquist.

The company chose its "No. 1 site," on 160 acres north of County Road 86 and half a mile west of Hwy. 56, partly because it felt officials in Hampton were receptive, Sjoquist said. The site also has good access to a railroad and highway, natural gas, electricity and water, she said.

The company organized a tour of a Boyceville, Wis., plant for local officials and residents and presented plans for the plant at an informational meeting and a public hearing this summer.

"We're disappointed with the decision," said Sjoquist, a Cannon Falls resident. "We had thought that the board and the planning commission had been impressed with the Boyceville tour, so we were hoping the decision would go the other direction."

The Wisconsin plant did impress officials such as town board member Donna Otto. "It didn't smell, and it was well run." Still, she added, "I said I would vote for whatever the majority of the people wanted."

Local opinion has been split on the proposal, with many residents worrying the plant would deplete the water supply and generate too much traffic and noise. More than 100 people signed a petition opposing the plant.

Others have welcomed the plant as a way to help local farmers.

Cannon River Clean Fuels initially applied for a conditional use permit for the plant, but withdrew the application when Hampton Township's attorney told the company that an ethanol plant would not be allowed under the township's zoning rules, Sjoquist said. Instead, the company asked the township to change its zoning rules.

At a company board meeting held after the Aug. 21 vote, the firm decided to "sit tight for a couple of weeks," Sjoquist said. "We could revisit some other sites," she said. Continuing to pursue a plant in Hampton Township is also an option, but "it's never been our goal to create any enemies, so we may leave it as it is."

Minnesota currently has 16 operating ethanol plants. Another five are under construction.

Sarah Lemagie • 612-673-7557

Sarah Lemagie • slemagie@startribune.com