V-Vehicle Deadline Extension from LED

According to The (Monroe) News-Star’s Greg Hilburn, the Louisiana Department of Economic Development is planning to extend the March 1 deadline for the controversial V-Vehicle project. Until now, LED has consistently and categorically denied any plans to extend the project’s deadlines. The project has been stalled since last fall after the company missed an October 1 deadline for funding.

At a David Vitter economic forum on February 19, LED Assistant Secretary Don Pierson said categorically there were no plans for any deadline extension. There was “not a fallback plan,” Pierson said.

LED, along with V-Vehicle officials, will make an announcement this evening, Hilburn wrote in his story. LPNO will post the statement as soon as it is available.

Lincoln Parish News Online has reported extensively on the controversial company and the Monroe project. Archived stories can be found here. We will continue to report on this ongoing story.

Legislative Committee Approval Requested
UPDATE: 5:30 pm, 2/28

Updating this ongoing story, Louisiana Economic Development Secretary Stephen Moret will ask a legislative committee to approve a contract amendment for a deadline extension. Robert Travis Scott has the story.

Last summer, the Joint Legislative Committee on the Budget had approved the contract. Here are the committee members.

Associated Press story by Alan Sayre
UPDATE: 7:08 pm – 2/28

The Associated Press’ Alan Sayre now has a story out. Several tidbits of new information can be picked out.

Like this:

Varasano also said the company’s demonstration vehicle was being tested and he believed it was close to the product that will eventually be sold.

What the hell does that mean? “Close to the product?” Do we or do we not have a car?

And this:

V-Vehicle said it has raised $86.5 million in private investment…

Notice how that number keeps shrinking. A couple of months ago the figure of $100 million was used. About a month ago, it shrank to $90 million. According to SEC documents, the figure is $65.6 million.

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Smart Grid to get Part of Entergy Refund

As predicted by Lincoln Parish News Online last December, at least some of the $3.75 refund from Entergy will not be given back to Ruston’s electric utility customers. In a Letter to the Editor, Ruston Mayor Dan Hollingsworth said some of the refund would be used in the Smart Grid Initiative for electrical system improvements. The money would match federal grants from the program.

The balance will be refunded to customers who were connected during the period between May 2003 and September 2007. The city’s records go back only as far as May 2003. It is unclear what percentage of the money will go to the Smart Grid program, or go toward refunds.

What is the Smart Grid Initiative?

The term refers to a program originating with the Energy Independence and Security Act of 2007. The stated purpose of the act is “to move the United States toward greater energy independence and security, to increase the production of clean renewable fuels, to protect consumers, to increase the efficiency of products, buildings, and vehicles, to promote research on and deploy greenhouse gas capture and storage options, and to improve the energy performance of the Federal Government, and for other purposes.”

The Wikipedia entry Smart grid in the United States says grants from the initiative will pay for installing more than 2.5 million smart meters, which allow utility customers to access dynamic pricing information and avoid periods of peak electricity use, when power is most expensive. The grants will also support the installation of other smart grid components, including in-home energy displays, smart thermostats, and other load control devices to enable consumers to reduce their energy use.

Extensive discussion of the program can also be found in the entry Smart grid.

Board of Aldermen Monday Night

The Ruston Board of Aldermen will meet Monday, March 1, 2010 at 5:30 pm on the second floor of Ruston City Hall. Here is the agenda.

There is a lengthy list of code enforcement actions, and a Memorandum of Agreement with the FAA for an equipment site lease. Also, a Cooperative Endeavor Agreement with the Lincoln Parish Police Jury for construction and improvements on Parish Road 404 (Longstraw Road). The road is located at the south end of Ruston Regional Airport’s runway.

We will be unable to cover Monday’s Ruston City Council meeting. We will be at the Ouachita Parish Police Jury meeting in Monroe.

What is an Environmental Assessment?

Just what is an Environmental Assessment? Here is the Department of Energy’s definition:

Environmental Assessment (EA) – A concise public document that a Federal agency prepares under the National Environmental Policy Act to provide sufficient evidence and analysis to determine whether a proposed agency action would require preparation of an environmental impact statement or a finding of no significant impact.

Last year, the DOE did an EA for Nissan North America’s Smyrna, TN manufacturing facility. The company plans to manufacture lithium-ion batteries for their LEAF electric vehicle at Smyrna, and had applied for an Advanced Technology Vehicle Manufacturing (ATVM) Program loan from the DOE.

The EA for the Smyrna project is 103 pages long and was begun in June of 2009 and completed in November 2009. Here is the document.

OPPJ President Shane Smiley Begins the Crawfish Maneuver on V-Vehicle Tax Refund

In what we in Louisiana refer to as a “crawfish” maneuver, Ouachita Parish Police Jury President Shane Smiley said yesterday that if V-Vehicle Company does not meet their March 1 deadline for funding, then they (the Police Jury) will have to meet with everyone to determine what next to do. In a Scott Rogers story in The Ouachita Citizen, Smiley talked about the project and the deadline.

“At this point we’ve got to let March 1 get here,” he said.

Smiley said local governments will take direction from LED (Louisiana Economic Development) regarding the agreement with V-Vehicle.

“If the state says the agreement in place on March 1 points to phase 3 funding being commenced, the we (local governments) remain obligated,” Smiley continued. “If not, then we’ll have to meet with everyone to determine what our next step will be. Right now, I don’t want to speculate.”

But that’s not what was said three weeks ago. No mention was made of any meeting with LED to get instructions.

In a 2/4/10 Ouachita Citizen story, West Monroe Mayor Dave Norris and Smiley both indicated the 3/1/10 deadline was firm and that the local property tax collected so far for the V-Vehicle project would be refunded.

Norris confirmed that if V-Vehicle failed to meet the March 1 deadline, property taxes collected for the V-Vehicles incentives package would be returned to taxpayers.

“Our agreement was if V-Vehicle was unsuccessful in getting all things in place, all that money would be refunded,” Norris said.

Police Jury president Shane Smiley, in a recent interview with The Ouachita Citizen, echoed Norris’ sentiments.

While V-Vehicle can ask for an extension in light of its loan application with the Department of Energy, Smiley says the resolution passed by the police jury contained strict language that would forbid granting an extension.

“The language is cut and dry … they have to meet certain criteria by a certain timeframe (March 1) or we are no longer responsible for our part of the deal,” Smiley said. “This timeframe we are working on was requested by Louisiana Economic Development Corp. and we agreed to it, and the contract was drawn up as such.”

Section 4.03 (E) of the original Cooperative Endeavor Agreement reads:

If Phase III has not commenced by October 1, 2009, grant payments under Sections 4.01 and 4.02 shall be suspended until Phase III has commenced. If Phase III has not commenced by March 1, 2010, the parties are relieved of further obligations hereunder, except Guideco’s obligations under Section 4.05(B), and the Company’s obligations under Sections 4.06(G), 4.07 and this paragraph. In this event, by April 1, 2010 the Company shall reimburse the State Investment.

Lincoln Parish News Online has reported extensively on the controversial company and the Monroe project. Archived stories can be found here. We will continue to report on this ongoing story.

Who is Jonathan Silver and Why is he so Important to V-Vehicle and Northeast LA Politics?

Just who is Johnathan Silver and why does he matter to the Northeast Louisiana politico/economic landscape? He is the Executive Director of the US Department of Energy’s Loan Guarantee Program. He decides who does and does not get one of those Advanced Technology Vehicle Manufacturing (ATVM) Loans that we’ve heard so much about.

He literally holds the fate of V-Vehicle Company in his hands – and by extension, the fate of many Northeast Louisiana politicians who had hitched their wagon to the controversial company’s long-shot plans. He’s the guy who signed the January 8, 2010 memo to the Louisiana Department of Environmental Quality, telling them that before any loan would be approved, the application would have to undergo an Environmental Assessment review. See LPNO’s comprehensive story about the EA here.

It is of note that he was not appointed to his post until November 10 of last year. For the pending loan applications – like those of V-Vehicle – would he want to review what he was asked to approve before signing off? We don’t know, but such a scenario would be logical.

We know he was on President Obma’s transition team and was a founding partner of the venture capital firm Core Capital Partners. Here is an interview with Silver in Washington Business Journal. As a venture capitalist, he’s seen every pitch in the book for The Next Big Thing and can likely spot a dud a mile away.

That’s who is Johnathan Silver.

Lincoln Parish News Online has reported extensively on the controversial company and the Monroe project. Archived stories can be found here. We will continue to report on this ongoing story.

Sammy Hanna: “Bad Bet on the Ouachita?”

Today there is this must-read column by Ouachita Citizen publisher Sam Hanna, Jr.

“However, it’s a bit discerning when taxpayers are called upon to put up some $465 million for a privately held company to take a stab at the free-market economy, especially when the company that’s asking for taxpayer support has less than $100 million in the deal. I suppose I wouldn’t be as nervous about it if those figures were reversed.

Maybe.”

Louisiana Higher Education: The Untouchables

We were pleasantly surprised yesterday to see The (Baton Rouge) Advocate print this letter to editor yesterday. It is a refreshing change from all the whining from the higher education establishment about how they cannot, must not, and will not be subjected to fiscal discipline.

On excessive whining from LSU

The behavior of the faculty and staff of this university demanding exemption is an embarrassment to the state, shows a lack of education on the part of these educators of the present economic crisis facing this state and this nation, and is a spit in the eye for all of us who are suffering because of the same job losses that LSU employees demand they not be a part of because of their extreme arrogance.

Meanwhile the pious posturing resumes today, scattered across the state’s Gannett newspapers and in The Advocate.

University officials welcome challenge, chance for independence
Jindal plan allows for tuition increases
Cuts jeopardize future of LSU
Game plan needed for higher ed

OPPJ Hell-bent to Sell V-Vehicle Bonds

In a surprise called meeting, the Ouachita Parish Police Jury last night voted to go ahead with the sale of bonds to help finance V-Vehicle’s project at the old GM Guide Plant. The story is in today’s The (Monroe) News-Star. Agendas for upcoming meeting are normally posted on the Jury’s website. Yesterday’s meeting was not posted.

Last October Ouachita parish voters approved a 1.8 mil property tax placed on the ballot by the OPPJ last July 16. Several days later the Jury passed a resolution that it said would refund the tax if the V-Car project does not materialize.

That promise, however, has enough daylight through which an 18-wheeler could pass. Firstly, the resolution says the jury would:

use its “best efforts” to refund to the taxpayers such taxes paid as a result of the levy under the authority of the proposition.

Additionally:

the terms of the Resolution shall be superseded by any obligations the Ouachita Parish Police Jury incurs in connection with any bonds, certificates of indebtedness, or other instruments entered into in connection with the financing of the Local Contribution.

V-Vehicle company plans to design and market what the company says is a revolutionary auto design, and assemble it at the plant location. The building and property are owned by Guideco Properties, LLC, a front company for Ruston businessman James Davison. The facility is now under lease to the company at an undetermined price.

We have seen reported that a March 1 tax refund deadline was promised by area politicians if the V-Car project didn’t materialize, and implied that the tax would be refunded after that date. In a 2/4/10 Ouachita Citizen story, West Monroe Mayor Dave Norris said:

Norris confirmed that if V-Vehicle failed to meet the March 1 deadline, property taxes collected for the V-Vehicles incentives package would be returned to taxpayers.
“Our agreement was if V-Vehicle was unsuccessful in getting all things in place, all that money would be refunded,” Norris said.

OPPJ president Shane Smiley echoed Norris’ sentiments:

While V-Vehicle can ask for an extension in light of its loan application with the Department of Energy, Smiley says the resolution passed by the police jury contained strict language that would forbid granting an extension.

“The language is cut and dry … they have to meet certain criteria by a certain timeframe (March 1) or we are no longer responsible for our part of the deal,” Smiley said. “This timeframe we are working on was requested by Louisiana Economic Development Corp. and we agreed to it, and the contract was drawn up as such.”

However, nowhere in the original resolution nor the refund resolution is an actual firm date deadline mentioned. The only condition mentioned is that if:

…said local contribution does not come due, the OPPJ will not make any future levy…

Presumably, if the State of Louisiana renegotiates the deadline, then the local deadline also slides. While the Louisiana Department of Economic Development denies any plans to extend the contract terms, such a move would not be unexpected.

Sorry, Ouachita Parish voters. You were lied to again.

News-Star, V-Vehicle Flack for Pact Extension

In a major front page spread (online today, dead-tree edition yesterday) designed to pave the way for an extension of contract terms, The (Monroe) News-Star says the controversial V-Vehicle company is finally constructing a drivable prototype of the V-Car. This comes eight months after a high-profile announcement at the old Monroe GM Guide Plant of their intent to build and market what the company says is a revolutionary auto design. Since that time, various politicians and company execs have told us there was a car – really there was. It appears they have finally gotten around to doing what they said long ago had been done – building a car that runs.

Perhaps the confusion was caused by what is the definition of “car.”

The News-Star had agreed to V-Vehicle’s preconditions to granting an interview and was allowed to tour the company’s San Diego headquarters and view the car. The conditions forbade the disclosure of details about the car, its technology or distribution model. LPNO had reported last June on the company’s headquarters, “a nondescript converted warehouse on the seedy edge of the city’s downtown Gaslamp Quarter.”

It was not disclosed who paid for News-Star Business Editor Greg Hilburn’s junket to California in connection with the series.

This all comes a week before a major deadline looms in the project timeline – March 1. At that point, according to Section 4.03 (E) of the Cooperative Endeavor Agreement:

If Phase III has not commenced by October 1, 2009, grant payments under Sections 4.01 and 4.02 shall be suspended until Phase III has commenced. If Phase III has not commenced by March 1, 2010, the parties are relieved of further obligations hereunder, except Guideco’s obligations under Section 4.05(B), and the Company’s obligations under Sections 4.06(G), 4.07 and this paragraph. In this event, by April 1, 2010 the Company shall reimburse the State Investment.

Much of the company’s financing plans depends upon approval of a Department of Energy Advanced Technology Vehicle Manufacturing (ATVM) Project loan. V-Vehicle has applied for $343 million in loans, one of which ($78.4 million) is for engineering and the other ($264.6 million) is for manufacturing facilities.

The company is also depending upon over $80 million in gifts from the Louisiana taxpayer, courtesy of the Louisiana Department of Economic Development. According to Securities and Exchange Commission documents, the company has raised only about $65.6 million in private funds for the project.

The News-Star’s Greg Hilburn gives the game away in the last graf of his “Parties await federal loan” story on page 8-A. In it he says if the loan is not approved by the March 1 deadline, the state will have to decide whether to grant an extension, “which is likely.”

Last Friday, however, LPNO had asked Louisiana Economic Development’s Assistant Secretary Don Pierson if there were any plans to renegotiate the original contract and try to extend the project timetables. He denied any such plans.

The company sub-contracted to actually build the prototypes – Metalcrafters, Inc., of Fountain Valley, CA – specializes in building prototype cars from artist’s rendering. Their website notes that they do engineering and design, “From rendered sketches to fully engineered functional moving parts.” The company also specializes in building “camera ready cars” for advertisements, film/video and documentaries.

Another bit of information revealed in the series is that Celene Varisano, wife of company CEO Frank Varasano, is V-Vehicle’s Vice-President of Marketing. She had formerly been Marketing VP at Tambrands, a maker of feminine hygiene products.

We were struck by a quote in one of the series’ articles from company spokesman Joe Fisher. He said, “Why would we unveil the car at a point so far in advance of when people can make a buying decision and squander that public interest.”

We have the answer: Because we taxpayers are paying for most all of it.

LED’s Pierson: “No Fallback Plan” for V-Car

Louisiana Economic Development’s Assistant Secretary Don Pierson said this morning that there was “not a fallback plan” in case a Department of Energy Advanced Technology Vehicle Manufacturing (ATVM) Program loan is not approved by March 1, 2010. Lincoln Parish News Online had asked Pierson if there were any plans to renegotiate the original contract and try to extend the project timetables.

He was interviewed by LPNO after he participated in a panel presentation at a West Monroe Economic Forum sponsored by Louisiana Senator David Vitter.

The loan process has been stalled since last year and is said to be necessary in order for Monroe’s V-Vehicle project to be sufficiently capitalized. If the project does not have at least $350 million in capital by March 1, Section 4.03 (E) – Failure to Commence Phase III – of the Cooperative Endeavor Agreement releases the participants from further obligations. If the capital is not in place by April 1, 2010, over $6 million of the state taxpayer’s money must be refunded.

The agreement was signed last June and announced in a high-profile event at the old GM Guide Plant, site of the proposed project.

Pierson said LED remains “confident of the (ATVM loan) confirmation in the near future,” even though the deadline is but ten days away. He said there was an “active dialogue” among the interested parties and that their goal is to make the deadline.

Lincoln Parish News Online has reported extensively on the controversial company and the Monroe project. Archived stories can be found here. We will continue to report on this ongoing story.