The state’s effort to help build a renewable- and advanced-energy industry in Ohio with taxpayer assistance is on the verge of suffering its first casualty.
Perrysburg-based Willard & Kelsey Solar Group failed to make payments on a $5 million loan and struggled to get financial investments, so the Ohio Air Quality Development Authority yesterday took the unprecedented step of calling the loan due. It declared the solar manufacturer in default and ordered full repayment by Sept. 3.
GBQ, an independent analyst hired by the authority to audit the company’s operations, now has the go-ahead to brief Auditor Dave Yost’s office about the company as part of the regular state audit of the authority. Yost’s legal counsel was upset because he was blocked from attending the authority’s last meeting with GBQ, which the auditor contended was conducted in an illegal executive session.
The Ohio Department of Development called a separate loan due this month, ordering Willard & Kelsey to pay $4.1 million by Sept. 5.
If the full amounts are not repaid, the state will begin to liquidate assets and take other legal steps to recoup as much taxpayer money as possible.
Gayle Channing Tenenbaum, chairwoman of the authority, said the default declaration was done “ with a heavy heart.” She said the authority hoped the solar industry would take off in Ohio, but at this point, the company doesn’t have the capital to make it work.
“You just can’t let it go on and on,” she said. “At some point you have to say: We’ve given you every chance and now we cannot continue to do this. We have to get as much back of taxpayer money that we can.”
In addition to the loans, Willard and Kelsey also got nearly $700,000 in state grants and a 10-year job-creation tax credit. The company was supposed to create 450 jobs, but employs fewer than 60.
State officials say the infant solar industry has been battered by a poor economy and a Chinese effort to flood the overseas market with cheap panels. Willard & Kelsey is one of three Toldeo-area solar manufacturers that have failed to make loan repayments.
Todd Nein, interim executive director of the authority, said Xunlight Corp. has changed its product and the authority is working to restructure the loan, though the company has until the end of September to come up with $3 million in investments it says is in the pipeline.
The authority has asked for an attorney general’s opinion on Buckeye Silicon’s loan. Nein said there is a question about when the clock started on the loan terms.
Willard & Kelsey officials recently rejected an authority request to make an immediate $1million payment, plus a $4 million personal note. GBQ supported the move to call the loan.
Jeff Jacobson, an authority member and former Republican state senator, urged the authority in April to turn over all three solar companies to the attorney general’s collections department.
“It’s sad to be in a position to have to do this,” he said yesterday. “I hope the taxpayers are no worse off than they would have been had we acted at a previous time. The issues that are involved in this default have been there for a while.”
A call to Willard & Kelsey was not returned.
The loans are part of a $1.6 billion state stimulus bill signed in 2008 by Gov. Ted Strickland. That package included $150 million for advanced and renewable energy.
The 2011 failure of Solyndra, a California solar company that took a $535 million federal loan and then went bankrupt, has sparked debate over the desire to assist renewable-energy companies versus the risk of losing taxpayers’ dollars.
The Blade of Toledo has reported that Willard & Kelsey officials have paid themselves $1.4 million and spent company funds on trips to sporting events, airline tickets for family members and furniture.
Source: http://www.dispatch.com/content/stories/local/2012/08/24/state-orders-solar-company-to-repay-5m.html
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| Willard & Kelsey CEO Michael Cicak, left, and plant manager Vince Poleo show solar panels to U.S. Labor Secretary Hilda Solis during a factory tour last year. |
Perrysburg-based Willard & Kelsey Solar Group failed to make payments on a $5 million loan and struggled to get financial investments, so the Ohio Air Quality Development Authority yesterday took the unprecedented step of calling the loan due. It declared the solar manufacturer in default and ordered full repayment by Sept. 3.
GBQ, an independent analyst hired by the authority to audit the company’s operations, now has the go-ahead to brief Auditor Dave Yost’s office about the company as part of the regular state audit of the authority. Yost’s legal counsel was upset because he was blocked from attending the authority’s last meeting with GBQ, which the auditor contended was conducted in an illegal executive session.
The Ohio Department of Development called a separate loan due this month, ordering Willard & Kelsey to pay $4.1 million by Sept. 5.
If the full amounts are not repaid, the state will begin to liquidate assets and take other legal steps to recoup as much taxpayer money as possible.
Gayle Channing Tenenbaum, chairwoman of the authority, said the default declaration was done “ with a heavy heart.” She said the authority hoped the solar industry would take off in Ohio, but at this point, the company doesn’t have the capital to make it work.
“You just can’t let it go on and on,” she said. “At some point you have to say: We’ve given you every chance and now we cannot continue to do this. We have to get as much back of taxpayer money that we can.”
In addition to the loans, Willard and Kelsey also got nearly $700,000 in state grants and a 10-year job-creation tax credit. The company was supposed to create 450 jobs, but employs fewer than 60.
State officials say the infant solar industry has been battered by a poor economy and a Chinese effort to flood the overseas market with cheap panels. Willard & Kelsey is one of three Toldeo-area solar manufacturers that have failed to make loan repayments.
Todd Nein, interim executive director of the authority, said Xunlight Corp. has changed its product and the authority is working to restructure the loan, though the company has until the end of September to come up with $3 million in investments it says is in the pipeline.
The authority has asked for an attorney general’s opinion on Buckeye Silicon’s loan. Nein said there is a question about when the clock started on the loan terms.
Willard & Kelsey officials recently rejected an authority request to make an immediate $1million payment, plus a $4 million personal note. GBQ supported the move to call the loan.
Jeff Jacobson, an authority member and former Republican state senator, urged the authority in April to turn over all three solar companies to the attorney general’s collections department.
“It’s sad to be in a position to have to do this,” he said yesterday. “I hope the taxpayers are no worse off than they would have been had we acted at a previous time. The issues that are involved in this default have been there for a while.”
A call to Willard & Kelsey was not returned.
The loans are part of a $1.6 billion state stimulus bill signed in 2008 by Gov. Ted Strickland. That package included $150 million for advanced and renewable energy.
The 2011 failure of Solyndra, a California solar company that took a $535 million federal loan and then went bankrupt, has sparked debate over the desire to assist renewable-energy companies versus the risk of losing taxpayers’ dollars.
The Blade of Toledo has reported that Willard & Kelsey officials have paid themselves $1.4 million and spent company funds on trips to sporting events, airline tickets for family members and furniture.
Source: http://www.dispatch.com/content/stories/local/2012/08/24/state-orders-solar-company-to-repay-5m.html
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