CE+P granted fifth loan extension
EL CENTRO — The Imperial County Board of Supervisors Tuesday morning voted 4-1 in favor of a fifth extension on a $625,000 loan for a proposed ethanol and power plant near Brawley.
Supervisor Luis Plancarte cast the dissenting vote, and Supervisor
Jesus Eduardo Escobar asked David Rubenstein, co-founder, CEO and president of California Ethanol + Power LLC, several questions regarding on how he plans to pay the county back. He also expressed concern regarding another extension in the future.
Rubenstein did not say he would not be asking for another extension. Instead, he asked if he could meet with Escobar before going to the entire Board of Supervisors for a future extension.
Rubenstein will only pay interest on the loan for the next six months. He said the county would not be out any money because of the extra months of interest he will pay before paying off the loan.
Rubenstein said he needed the five-month extension because unforeseen expenses had occurred, adding the nearly billion dollar project is nearing realization.
Rubenstein hoped to have the financing in place by the end of September 2020 with the two-year construction timeline to start late in the fourth quarter.
To date Rubenstein and his company have paid $30,000 in interest over the last five years on the county’s loan, and he offered another $5,000 in interest on Tuesday if the board granted him the extension.
Escobar had a lot of questions for Rubenstein.
“It was funded five years ago, and we have not seen any principle paid back,” he said. “We need to know when the county will be paid back.”
Escobar said if the project comes to fruition everyone wins, so that is the hope.
“This is a loan, and we need specifics (on how we) are going to get paid back,” he said, pointing out it has been five years since the $625,000 loan was given.
“It is highly likely that you will be back within six months to ask for another extension,” Escobar said. “I would like to see some specifics in how and when we will get paid.”
Escobar said when Rubenstein asks for another extension in five to six months he wants to see concise documentation on how the county will be paid back.
Rubenstein said these answers were included in the latest information he provided to the county.
Without the extension, Rubenstein would have had to pay the county $78,125 by the end of January.
“You are talking about our loan.” Escobar said. “How will your entity pay us back?” he asked, adding it must be paid back.
When Escobar told Rubenstein the proper documentation would be needed before getting another extension, Rubenstein asked if he could work directly with the supervisor to make sure he has the proper documentation needed before coming to the entire board.
Plancarte said his concern is the lack of a guarantee on this project, adding the supervisors are seeing one extension after another with no personal guarantee.
The $625,000 loan has no collateral securing it if it ended up being in default. Rubenstein does not own the property where the plant would be located.
Plancarte said he would only vote for the extension if the board changed the agreement to modify the extension.
Supervisor Ray Castillo, who agreed to add Escobar’s request in his motion, chose not to add Plancarte’s amendments.
After the vote, Rubenstein told the supervisors he is doing everything he can.
The Sugar Valley plant is projected to produce up to 68 million gallons of fuel-grade ethanol from sugarcane yearly. Sugar Valley would use the molasses created as a byproduct from the process to produce up to 740 million cubic feet of bio-methane gas per year and use the juiced sugarcane feedstock to generate up to 49 megawatts of electricity.
The site will also have a wastewater treatment plant capable of processing all wastewater from the property’s facilities, as well as 1 million gallons more from nearby businesses and homes.