Danville negotiates grant repayment for U.S. Green Energy
- June 15, 2014
Danville has tentatively agreed to repay the Virginia Tobacco Commission $1.6 million given to U.S. Green Energy.
In the fall of 2010, the commission gave U.S. Green Energy a $1.6 million grant in exchange for a commitment from the company to invest $30 million and create 372 jobs over three years. The company planned to manufacture solar building materials, such as roof slates and shingles, siding and facades.
Since the commitments have not been met, the city is responsible for refunding the money to the Tobacco Commission.
If approved by Danville’s City Council, scheduled to vote on the matter on Tuesday, the agreement would allow the city to seek reimbursement from U.S. Green Energy.
Danville would make four annual installments of $400,000, the first that would be paid on June 30.
“We do not anticipate a city liability on this project,” Joe King, Danville’s City Manager said in a statement on the city’s website. “Officials from U.S. Green Energy have assured us that the company will cover the full $1.6 million grant in the scheduled four-year period.”
U.S. Green Energy built a manufacturing facility in the Cane Creek Centre. Last month, a company director purchased the building for $1.1 million. The cash from the sale of the building, which will be leased back to company, allowed U.S. Green Energy to pay some of its debts and take steps toward continuing production. Company officials expect production to resume by the end of the month.
U.S. Green Energy expects to receive a second cash flow from overseas investors. The company told the city that ”international money lending regulations have kept the cash languishing in an overseas bank while the transfer goes through multiple reviews,” according to the statement.