Archive for the ‘Twin Creeks’ Category

Barbour: Vetting process for Twin Creeks was sound

December 14th, 2012 1 comment

Former Gov. Haley Barbour says the vetting process for Twin Creeks revealed a company that had an advantage over its competitors because it used 4 percent as much silicon to make its solar panels.

That wasn’t enough to keep the company from going under, and owing the state just more than $27 million in aid used to build an 80,000 square-foot facility in Senatobia and to purchase equipment to put in it. China’s decision to flood the U.S. solar panel market with products even cheaper than Twin Creeks’ was what did the company in, Barbour said, echoing what Mississippi Development Authority officials have said recently.

“We thought it was a company that could compete very successfully,” Barbour said in an interview with the Mississippi Business Journal. “They had an agreement to sell quite a large number of solar panels in India. Indian officials even came to the groundbreaking. Those expected contracts fell through when the Chinese ran the price down so much. So while Twin Creeks could beat everybody’s price over here, the Chinese didn’t care what the price was. The Chinese were interested in employment. They’ll sell the solar panels for whatever they get. They don’t care about profit.”

To go with its contracts in India, Barbour said Twin Creeks had more than $100 million in private investment committed, something he called “a key indicator” as to whether the company was legitimate.

Barbour said the state has had success with start-ups before, pointing to steelmaker SeverCorr (now Severstal) in Columbus.

“We spent about $35 million on their facility in Columbus – site prep, drainage, and the like,” Barbour said. “Then we gave them a $60 million loan guarantee, which they have paid off. We’re in that deal about $35 million and they’re in it several hundred million dollars.”

Barbour did not praise or criticize current Gov. Phil Bryant’s recent assertion that the state would be more interested in investing in established companies with a track record of success, rather than start-ups like Twin Creeks.

“For us, when we looked at something that was a start-up, it always came back to how much private investors were putting in. It’s up to (the Bryant administration) to set the policies, to fine-tune them how they think is best. Nobody’s crystal ball is perfect.”

MDA boss: Incentives here to stay

December 12th, 2012 No comments

Mississippi Development Authority executive director Brent Christensen said that agency will examine the possibility of lending financial help to start-up companies like Twin Creeks “with a different eye,” and any aid package will likely look different than those of the past.

Christensen, in his first extended session with the media Wednesday morning, also released a report that detailed the amount of economic development incentives the state has issued since fiscal year 2008. Christensen added that he will make the release of similar data an annual thing.

Numbers show that from FY 2008 until the end of FY 2012 last June, the state gave out incentives totaling $520,397,565 in the form of grants, loans, tax credits, tax rebates and other devices. Those incentives resulted in a total of 32,268 jobs being committed, though MDA CFO Kathy Gelston said some of the incentives were for job-retention programs, which means those jobs have already been realized.

Eliminating duplicate job counts, the incentive-per-job ratio comes to $20,794.

How they’re given and who receives incentives is getting a fresh look at the MDA, Christensen said, and not just because of the recent failure of Twin Creeks. The Senatobia solar panel manufacturer owes the state $26 million it got to build its 80,000 square-foot facility and to purchase equipment. The MDA is marketing the building in an attempt to find a tenant. The state also has sued Twin Creeks in an attempt to recoup some or all of its investment.

Christensen, like Gov. Phil Bryant recently, said the state would be hesitant to go into business with start-up companies like Twin Creeks.

“And if we do, our incentive packages will likely look different than they have,” Christensen said. “We’ll continue to look at those kind of projects, just with a different eye. There has to be significant private investment.” Private investment in Twin Creeks had reached $100 million. The state chipped in $25 million of a $50 million loan package that was available.

State aid in newer or start-up companies will probably help with workforce development and infrastructure, instead of actually financing the company, Christensen said. Ghelston said companies having in-hand the money to build their facility would likely be a requirement, too.

What will not change is the actual practice of issuing incentives, Christensen said. “The only way they go away is the federal government bans them, which would lead to widespread litigation, or all 50 states get in a room and agree to drop their weapons,” Christensen said.

The Southeastern U.S. is particularly competitive when it comes to economic development. Christensen listed Alabama’s recently upping its ceiling on incentives by $130 million via referendum, designed to help that state land Airbus suppliers connected to the aircraft manufacturer’s Mobile facility.

South Mississippi wants in on those suppliers, Christensen said, and incentives will be a part of that pursuit.

Lowndes County extends deadline for Silicor, with conditions

December 3rd, 2012 1 comment

Silicor Materials, which manufacturers silicon for solar energy production, received a six-month extension Monday to secure financing and break ground at its facility in Lowndes County, contingent upon the company putting up $150,000 in earnest money.

It’s the second extension the company has gotten. It missed the first deadline in September, and Silicor officials told Lowndes County officials last month they would miss the second one, scheduled for Dec. 31. The company has cited difficulty securing financing as the primary reason behind the delays.

Silicor has until Dec. 31 to put the earnest money into escrow, Harry Sanders, president of the Lowndes County Board of Supervisors, told the Mississippi Business Journal Monday afternoon. If the company fails to do that, he said, the county’s incentives are canceled and the deal is off.

The deal will also be off if, by June 30, 2013, the company has not secured financing and regulatory permits and broken ground. The company will also forfeit the earnest money. Silicor had planned to build on 90 acres owned by the county at Lowndes County’s industrial park. “We just can’t keep holding that land for them,” Sanders said.

Sanders said the county had done infrastructure upgrades to the site, but that work had been planned before Silicor made it known it was interested in it.

The project would represent a $200 million investment by Silicor, which planned to employ almost 1,000 people at the facility once it opened.

In a special session in September 2011, lawmakers approved a $75 million incentive package for the company, known then as Calisolar, including $59.5 million for construction of the facility and equipment to put in it, $11 million for infrastructure and $4.5 million for workforce training. Lowndes County also pledged $19 million. None of that money has actually been spent, though, because it was contingent upon Silicor breaking ground on its facility and reaching other milestones afterward.

Silicor’s struggles come right after Twin Creeks, another state-backed alternative energy project, failed. Twin Creeks had planned to make solar panels at an 80,000 square-foot plant in Senatobia, but the company never started production and has dissolved after being sold. The buyer, GT Advanced Technologies, will not honor the agreement with the state, which loaned Twin Creeks $26 million to build the plant and stock it with equipment. State officials are currently trying to settle with Twin Creeks and find a tenant for the Senatobia facility.


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MDA CFO: Safety net working in case of Twin Creeks

November 30th, 2012 No comments

The Mississippi Development Authority’s chief financial officer said Friday afternoon that while every economic development project that receives state aid carries some risk, the system of “clawbacks” is working in the case of Twin Creeks Technologies.

Twin Creeks, the California-based solar panel manufacturer, received a $26 million loan from the state to open an 80,000 square-foot facility in Senatobia, but the company never got off the ground and was bought earlier this month by GT Advanced Technologies. GT does not plan to honor Twin Creeks’ agreement with the state.

The state loaned Twin Creeks $15 million to build the facility, and another $8 million to purchase equipment. The state now owns the building and its contents. Another $3 million in public money was used for site prep and for infrastructure upgrades.

“This shows that the clawbacks are working,” MDA CFO Kathy Ghelston told the Mississippi Business Journal in a phone interview. “We have the building, we have the equipment. We will get a settlement hopefully. I think that worst-case scenario, everything we’ve paid for, we have. Best-case scenario the state is made completely whole.”

The state sued Twin Creeks in Tate County Chancery Court in early November. Ghelston said she was optimistic the parties could reach a settlement that would allow the state to recoup its investment.

Ghelston said the first sign of trouble came Oct. 17, when Twin Creeks officials told MDA brass in a meeting that it was not going to be able to make the first loan payment to the state, which was due in December.

“At that point, we knew that the project was in real danger,” Ghelston said.

Gov. Haley Barbour convinced lawmakers late in the 2010 legislative session to pass a $50 million loan package that did not specify Twin Creeks by name, but spelled out the  investment ($132 million) and job-creation benchmarks (500 over five  years) that Twin Creeks claimed it would reach when the company announced in June 2010 that it was building a facility in Senatobia.

Ghelston said Twin Creeks had the technology to produce solar panels cheaper than their competitors in 2010. The problem, she said, arose when China flooded the U.S. market with solar panels that were cheaper.

“I don’t know if there is anything we could have done to prevent what happened from a market standpoint,” Ghelston said.

The MDA plans to market the building for a new prospect to sell or lease. Ghelston said the facility would be ideal for suppliers connected to the aerospace or automotive industry. She took exception to a Memphis-area commercial Realtor’s assertion to the Associated Press that the building is worth far less than the $15 million it cost to construct.

“I question how they would know that considering they’d never been in the building,” Ghelston said. “It’s not a warehouse. It’s a very technologically advanced building. It’s not a shell and that’s not the way it will be marketed. We believe there are real opportunities for that building.”