Rio Rancho Solar Plant On Hold
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Sunny Promises Eclipsed by Reality of No Money
The huge new solar plant was going to be “fast-tracked.” The City of Rio Rancho would cobble funds from dozens of projects to build roads and sewers to serve a million square-foot plant that would employ 1,500. Eventually 3,000 people around the state would be employed by this new leader in the solar industry, Green2v. Politicians rushed to share in the limelight. Governor Bill Richardson, U.S. Senator Jeff Bingaman, Rio Rancho Mayor Tom Swisstack gathered before the cameras to herald the coming of thousands of “green jobs” and the next great thing in alternative energy.
It’s all looking more and more like one huge spin job that suckered in some of the state’s most prominent politicians. The formula required gullibility. They provided it. What’s missing is real money. And the lack of real money–despite contrary representations from Green2v and its associates–has canceled out the giddiness politicians displayed only weeks ago.
Big Talk, Bigger Promises
Other solar dreamers have failed to turn New Mexico into Governor Richardson’s dream of a “Solar Valley” that could rival California’s “Silicon Valley.” They, too, inspired giddiness with their promises of thousands of high-paying high-tech jobs. But they didn’t come with their own money and couldn’t get the financing needed to move beyond talking about what they would do.
Green2v was going to be different. It supposedly had the money, a lot of money. It had more money than any other solar start-up had been able to attract anywhere in the United States. Half a billion dollars, to be exact, sitting in a bank ready to be invested through industrial revenue bonds to be issued by the City of Rio Rancho. Green2v had a letter of credit to prove up its staggering financial backing.
Many businesspeople contacted by New Mexcio Watchdog, particularly those who vet solar power venture cap proposals, were incredulous. Green2v had no unique process, intellectual property, or patents. They also noted that Green2v didn’t have much “skin in the game.” Virtually all of its funding would be borrowed, with its own team putting in little money of their own. Against $500 million to be borrowed through IRBs, Green2v said it had only about $20 million it could put on the table. Ratios like that raised red flags among venture cap analysts and investors who play with their own money.
So far, there hasn’t even been a sign of Green2v’s $20 million. The company doesn’t even have a website.
Not to mention the fact that Green2v was supposed to take on the entire global solar power industry, particularly the low cost Chinese, yet it has never built or installed a single solar panel anywhere.
But politicians were easily impressed. Less than a week after the 4/8/10 press conference with speeches from Swisstack, Richardson and Bingaman, the Rio Rancho City Council unanimously passed an inducement resolution expressing the city’s intent to issue $500 million in IRBs for Green2v.
Show Us the Money
This site, the Albuquerque Journal and New Mexico Politics with Joe Monahan didn’t buy the hype. The letter of credit looked fishy. For one thing, it had no contact information for the issuer, an outfit with no more identification than the symbols “GP3.” It was supposed to be a California limited partnership, but the Secretary of State of California had no record of their existence. The signature page of the letter of credit was faxed not from the office of a firm with half a billion in the bank, but from a UPS store north of Los Angeles. The company that presented the letter of credit to the Rio Rancho City Council, OCS Capital Group, was revealed to have corporate offices that were no more than a drop box at a UPS store in Las Vegas.
Now the chairman of OCS Capital Group, Gil Olguin, says he has never heard of GP3 and learned of them only through newspaper coverage of the Green2v situation. But OCS Vice President Bruce Adams has surfaced in another solar power financing deal as a representative of the elusive GP3. To that, Olguin says Adams is just a contract worker for OCS and he has no idea if Adams has any connections with GP3–whoever they are.
New Mexico Watchdog early on suggested city officials could clear away the questions and doubts simply by insisting upon presentation of a verified bank statement showing that GP3, as its letter of credit stated, had $500 million on deposit in a bank.
City officials, who invested personal political capital in the Green2v hoopla, initially defended the company and criticized the skeptics. But after the questions continued to build they’ve backed off. And the Green2v momentum seems to have died. Rio Rancho has issued the following statement:
On April 14, 2010, the Rio Rancho Governing Body approved an industrial
revenue bond (IRB) inducement resolution for Green2V. This IRB
inducement resolution is the first step in the formal IRB Governing Body
approval process. The inducement resolution expresses the intent of the
city to issue the bonds, but does not legally commit the city to do so.
In addtion, there is no cost to the city related to the issuance of the
In the near future, a bond ordinance will follow for Governing Body
consideration and action. Until formal and final confirmation that the
private bond financing ($500 million) arranged by Green2V for this
project is in place and the Governing Body considers the bond ordinance,
the process of due diligence remains ongoing.
Translated: Nothing more is going to happen until Green2v shows us the money. Finally, a little common sense has squeezed its way into the process.
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Rio Rancho Solar Plant On Hold
Errors of Enchantment » Rio Rancho Solar Plant on Hold
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