Thursday, October 8, 2015

MDA on Kior: "We have the ability to make them make full payment on that loan"

$70 million in Kior loan money turns into $600,000 for Mississippi.  The Republicans made hay out of the beef plant fiasco, now it is their turn to take some lumps although both Democrats and Republicans overwhelmingly voted for the Kior project.  It is now time to look at what MDA had to say about the project while it was merely a proposal instead of a failure.  Amy McCullough reported in a 2011 Mississippi Business Journal article:

State leaders agree that affordable and reliable energy is essential for Mississippi’s future economic growth. Gov. Haley Barbour has said his energy policy is “more of it” and has aggressively promoted hefty incentive packages to a number of green energy projects, which have received enthusiastic support from the state Legislature.

Successful global companies like Nissan and Toyota have also received generous state incentives to locate plants in the state. But these companies have excellent and lengthy track records, unlike start-up energy companies.

Making loans to start-ups is “a relatively new position for the state to be in,” said Kathy Gelston, chief operating officer for the Mississippi Development Authority (MDA).

Wisely written clawbacks, or contract reversionary clauses, can recoup Mississippians’ money if a plant moves or doesn’t produce. But it’s hard to claw back money from a corpse if a start-up goes belly up.

Mississippi clawbacks and competition with China

The people of the State of Massachusetts are unhappy and reviewing clawback provisions in a deal they made with Evergreen Solar — a plant that announced this month that it is moving its manufacturing facility and 800 jobs to China.

Massachusetts taxpayers gave more than $40 million in combined grants and tax incentives to Evergreen’s plant, which opened in 2008. But manufacturing costs in China are 50 percent cheaper.

The company says that clawbacks in its state agreement dictate that Evergreen Solar only owes Massachusetts $4 million, according to Solar Novus Today. The state disagrees.....

We should continue financing research on solar technology as long as that research continues to produce cost-cutting breakthroughs… but we shouldn’t pretend that cheaper solar energy will end up employing millions of our less-skilled citizens. For decades, local economic success has come from entrepreneurship and education, not large-scale manufacturing.”

MDA’s Gelston said the agency puts clawbacks in place to protect Mississippi taxpayers.

“In general, the way our programs work, if the state has invested money… then clawbacks basically state the company must maintain the jobs for a negotiated period of time. Normally that number is 10 years. And they must make an investment amount by a certain date,” Gelston said.

“A lot of them have really long construction cycle. In the event that that doesn’t occur then most of the time the clawbacks are written so that we would do a percentage. For example, if they had to invest $300 million and had only invested $150 million, they would have to pay back 50 percent” of the investment money.

“In the event the company doesn’t meet their investment commitment or job commitment, we have the ability to make them make full payment on that loan… The way we work these projects is we based the incentives we provide based on the investment the company is going to make and the jobs they’re going to create over the next several years,” she said.....

Green energy startups and secured loans

Since July 2010, the Mississippi Legislature has approved a $185 million alone in loans for three green energy projects — Soladigm, KiOR and Stion – which collectively represent more than $1.1 billion in planned investments in the State of Mississippi.

*Soladigm, founded in 2007, will build its first full-scale manufacturing facility for dynamic glass windows, in Olive Branch.

*KiOR, founded in 2007, will convert biomass to crude oil with three facilities near Columbus, Newtown and Franklin counties.

*Stion, founded in 2006, will manufacture high-efficiency, thin-film solar panels in Hattiesburg.

Such projects have received loans from a Mississippi Development Authority-administered fund called the Mississippi Industry Incentive Financing Revolving Fund, and Mississippians are on the hook for the money if any of these companies should go bankrupt. The Revolving Fund is funded with state bond proceeds.

MDA’s Gelston said all the start-up companies MDA has worked with are cash- and equity-rich.

When the state makes loans for equipment purchases, as it has for Soladigm, MDA makes sure the state has the first lien position on pieces of equipment, she said. And, “We normally don’t finance pieces that are not somewhat generic. For example, a generator is a generator; a crane is a crane,” Gelston said.

If a company went bankrupt, much of the equipment for cutting-edge renewable energy technology wouldn’t have much market value. Additionally, the start-ups “don’t want to run risk of their technology being seized,” Gelston said..... Rest of article. 

Kingfish note: Just remember, WTVA reported earlier this week:

The equipment of biofuel company KiOR has been sold. Lowndes County officials announced the sale Monday morning. REG Energy of Indiana spent $1.7 million to purchase the hydrostater at the site. The company, which manufactures biofuel from natural fats and grease, will move the equipment to a site in Indiana.

Georgia Renewable Power purchased the remaining equipment for $1.5 million. The owner of the company may locate a wood chip mill at the site or move the equipment. KiOR manufactured crude oil from wood byproducts and refined it into gasoline and diesel. The plant never reached production levels anticipated and filed for Chapter 11 Bankruptcy in November of 2014.

The state, county and city of Columbus invested nearly $74 million on the KiOR project. The state is expected to get $600,000 from the sale with the rest going to local government. As for the land where KiOR was located, it could revert back to the county.


Anonymous said...

They’re [KioR] going to do what it takes millions of years for Mother Nature to do in a matter of seconds.” -- Haley Barbour

Anonymous said...

Speaking of Mother Nature, Haley is the same guy who tells us that getting MS Power customers to pay $ 4 Billion for Kemper burning manufactured Syn Gas is a good deal compared to an off the shelf $500 Million plant burning natural gas that Mother Nature provides abundantly and cheaply. Haley I hope the SO fees have been worth the sale of your reputation.

BenBit said...

Great research work. Keep it up. Their own words can only hang them if they are constantly thrown back at them.

"sunlight is said to be the best of disinfectants"
Louis Brandeis

Anonymous said...

Butler Snow??💰

Anonymous said...

"Most of our customers trust us and know we're trying to do the absolute best thing by them," he said. "We are at the end of the day motivated to keep our rates as low as we possibly can." Mississippi Power CEO Ed Holland. More Haley Barbour and Butler Snow $$$$$. Only people who believe the lies told about these financial disasters are Ms.Power's two representatives on the PSC and zero on the Kioscam.

Credik Whur Dew said...

You Haley Haters are also democrats, liberals, progressives. Doesn't it occur to you that the quotes you attribute to Haley were actually comments made by your boy Barack?

Anonymous said...

Big biz capitalism is another word for small biz unfairness. Taxation giveaways causes the regular guy to pay more.

Anonymous said...

If you think only "democrats, liberals, progressives" abhor what Haley Barbour has done to Mississippi then you are, well, ignorant.

Anonymous said...

Democrats, liberals, progressives and 'conservatives' who have been shut out of the Republican family picnic all abhor Barbour.

Anonymous said...

Damn 11:49 you might have nailed it and not realized it. You so-called "republicans" that like to bitch about Haley are bitching because you have been "shut out". Maybe you have been shut out of the Republican picnic because all you like to do is bitch about some of its leaders.

Anonymous said...

Sorry piss ant, you Republicans can't win jack shit without paying black Democrats $$$ to replace the folks you've excluded from your glory hole picnic.

Anonymous said...

IN the mean time, regular tiny business guys are getting audited by the Mississippi Dept Of Revenue in case some mistake can net the state a few hundred bucks, costing the small business thousands just to prepare for the audit all the while the same state is giving away tens of millions of the citizens dollars on projects that said tiny business man can tell right off would not work.

Ah, Remind Me Who You Are ... said...

11:49 either has a large burr under his saddle or an intractably, irritable boil in the crack of his ass. Did Haley not invite you to the Coon-Hound Convention one year? Or perhaps, at some remote fish fry, he simply asked you to remind him who you were. This blog is an amazingly convenient place for anger and jealousy to be displayed.

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Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).

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In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.

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Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

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