Anytime that news is dumped out on Friday afternoon, it’s not going to be good news.
This company got $1,600,000 in Free Money from the Tobacco Commission back in 2010 and promised well over 300 jobs. Nothing happened in the first year, but the company said it’s going to happen very soon. Nothing happened the next year, but the company said it’s going to happen very soon. Nothing happened in the year after that, but the company said it’s going to happen very soon. See the pattern here?
Time’s Up! That buzzer that you heard was the end of the Free Money period from the Tobacco Commission. US Green Energy didn’t beat the clock, the clock beat them. Badly. Like the Harlem Globetrotters beat the Washington Generals. Like the chances of a non-country concert in the Harvest Jubilee concert series. Like Thomas Motley in a Danville City Council election. Yeah, that bad.
Here’s the city’s press release that was tossed out Friday afternoon… Danville negotiates grant repayment for U.S. Green Energy.
Here’s the Register & Bee story on it… Danville negotiates grant repayment for U.S. Green Energy. (Yes, it’s the same headline as the city’s press release. It was Friday, so I’m not going to mention how lazy-ass that was.)
If you’re a faithful reader of SouthsideCentral, you’re probably ready for me to disembowel this entire thing. I’m not going to let you down. Bring on the Big Board.
- City Manager Joe King says ““Officials from U.S. Green Energy have assured us that the company will cover the full $1.6 million grant in the scheduled four-year period.” – They also told the city, the Tobacco Commission, and everybody else that they were good for $30 million and 372 jobs. Jeremy Stratton believed them enough to vouch for them and we know all of his economic development deals have succeeded. Isn’t that right, Mr. Chervik? (Let’s see who gets that Caddyshack reference)
- “Company officials expect to receive a second cash infusion from overseas investors.” Yes. I expect to have the winning Powerball ticket as well. I’m pretty sure that this “second cash infusion” will never happen.
- “They say international money lending regulations have kept the cash languishing in an overseas bank while the transfer goes through multiple reviews.” Riiiiiight. If this Mystery Cash was real, I could have sent it by Western Union $1000 at a time since 2010.
- An officer of the company bought the building, leased the building back to the company and used the cash proceeds to pay the first of four $400K payments. Remember this next year when the second $400K payment is due, because I’m betting it won’t be paid by US Green Energy.
- This is the company that was in front of City Council less than two weeks ago complaining about their $450 electric bill. If their electric bill is $450 with nothing going on there, imagine what it would be with real production going on. They’ll need a lot of this Mystery Cash to pay that bill. It’s not like they have any solar energy panels to use for electricity there.
- Joe King: “The majority of small businesses fail within the first five years. It’s not unusual to have a new start up company experience some tough times getting fully functional.” – Wow. This is some really good spin because the majority of small business don’t get a million dollars of Free Money that’s guaranteed by the City of Danville (Brad Mainland and Web Parts not included). This is the same type of “Everything’s Going To Be Fine” talk we got a few months ago about the death spiral of the GOK Chinese furniture company. It’s horsecrap.
The city wants you to believe that the taxpayers aren’t going to be on the hook for the rest of the Tobacco Commission money. That’s understandable because they don’t want to feel the sting of the public outrage. The city also doesn’t want to publicize the fact that the Jeremy Stratton-led era of economic development has been a string of Job Busts and that more situations like that are going to be coming up. When Ecomnets turned out to be a Job Bust, at least they had the money to repay the Free Money that they got. US Green Energy doesn’t and they’re probably not ever going to.
This is a Job Bust disaster that’s been all wrapped up in pretty paper with a sweet bow on top. Inside the package, we’re going to find out that this is not anywhere close to what the city is trying to make you think it is. The city is now trusting a company that’s already broken every promise. It’s just not going to work out and the taxpayers are going to end up paying for this Job Bust.
Let’s all remember this article when it comes time to make Payment #2 on this bill.