Danville negotiates grant repayment for U.S. Green Energy

June 14, 2014 by  
Filed under Green Energy News

Posted: Friday, June 13, 2014 3:29 pm
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Updated: 4:17 pm, Fri Jun 13, 2014.

Danville negotiates grant repayment for U.S. Green Energy

BY VICKY MORRISON
vmorrison@registerbee.com
(434) 791-7981

godanriver.com

Danville has tentatively agreed to repay the Virginia Tobacco Commission’s $1.6 million investment in U.S. Green Energy.

The plan to repay the commission in $400,000 installments over four years will be up for approval Tuesday at the City Council meeting. If approved, the first installment will be made June 30.

The commission requires a payback on its investment because U.S. Green Energy never followed through on its promise to invest $30 million and create 372 jobs in three years. Since the company announced its plans on Oct. 22, 2010, it bought a $1.1 million manufacturing facility in Cane Creek Centre, according to a city news release.

According to previous news releases issued by the economic development office, U.S. Green Energy manufactures building systems that feature integrated photovoltaic cells to generate solar electricity. Employment decisions had been expected to start in early 2011.

Since the city will be making the initial repayments to the commission, U.S. Green Energy will be expected to reimburse the city. Danville’s city manager, Joe King, stated in a news release from the city that the company has guaranteed it will handle its repayments within the planned four year timeframe.

King explained via phone that “we accept those responsibilities” to abide by the three year timeframe of the Tobacco Commission. “They had technically reached a non-performing status last year, 2013, so since we’re able to see that it was not a surprise.”

King added that the failure of a small business start-up isn’t that shocking either. “The majority of small businesses fail within the first five years,” he said. “It’s not unusual to have a new start up company experience some tough times getting fully functional.”

The sale of the recently purchased building, which will be leased back to U.S. Green Energy, assisted in debt payments and production. Previous reports in the Danville Register Bee stated that $413,000 has been recuperated by the city from the sale of the building.

Production should continue by the end of June. Funds are expected to be supplemented by overseas investors. The release stated that “international money lending regulations have kept the cash languishing in an overseas bank while the transfer goes through multiple reviews.” Previous reports supported that the company has been awaiting the multi-billion dollar international investment for close to a year.

“We’re disappointed that the company has not been able to get up and running and isn’t employing people now, but the fact the company is, after some struggle, ready to get up and running” is a positive, King said.

With the investment returned to the commission, King said that U.S. Green Energy would be free to proceed at its own pace without constraints of timing, investment or job figures. This, he added, would mean that the community would ultimately win in this scenario even though the commission will mark this deal a failure.

“We’re hopeful at the end of the day U.S. Green Energy will be a successful company for the region,” King concluded.

Morrison reports for the Danville Register Bee

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Friday, June 13, 2014 3:29 pm.

Updated: 4:17 pm.

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