California Ethanol & Power gets loan extension from county
EL CENTRO — An ethanol and power plant that would bring in nearly 300 local jobs to the area and about $900 million to build was narrowly granted a second extension to pay back a $625,000 loan in a vote by the Imperial Board of Supervisors Tuesday morning.
The 3-2 vote, with Chairman Ryan Kelley and Supervisor Jesus Euardo Escobar in dissent, allows David Rubenstein, co-founder, CEO and president of California Ethanol & Power LLC, to pay only interest on the loan for the next six months in accordance with an Agriculture Advisory Committee recommendation two weeks ago.
Rubenstein is now required to pay $2,000 a month on interest though Nov. 10 on the $625,000 loan, with a six-month extension on the principle.
“We are working hard on this project,” Rubenstein said. “It’s complex. We are not giving up.”
‘Rubenstein hopes to have the financing in place by the end of September with the two-year construction timeline to start by the end of the year.
The supervisors were told the $625,000 loan had no collateral securing it if it ended up being in default. Rubenstein does not own the property where the plant would be located.
That concerned Escobar, who conceded the project, if it comes to fruition, would be good for the area.
Four years ago, the county approved to loan Rubenstein $750,000 to do some startup work. Ultimately, Rubenstein received $625,000.
“It is very important we get a concrete timetable, not monthly statements,” Escobar said. “We don’t have an end date.”
One concern he had focused on when and if the loan would be repaid.
“We need to set a date and a target,” Escobar reiterated. “If we are (considering) an extension on a loan we gave four years ago, it is important we have a timeline. At the end of the day, this was approved four years ago.”
Rubenstein said the terms of the loan required that he provide updates on the project on a quarterly basis.
“I am doing everything I can to get this moving,” he said. “I am herding (cash) as fast as possible. I am dealing with big guys. We are doing a good job.”
Escobar refused to change his stance.
“We are lending other people’s money,” he said, adding if the financing falls through, the project goes to heck.
However, Supervisor Ray Castillo who voted in 2015 for the loan, still supports the ethanol plant and another extension.
It’s going to become a reality,” he said “Fuel is going to increase in price.”
Other states are already using alternate fuels, he said, and added the board needed to approve the loan extension immediately.
“I don’t see any reason why we should deny,” he said.
The concern for Supervisor Luis Plancarte is the vendors, after four years, are not coming through,
“Some of the bigger (things) are not done yet,” he said.
Plancarte said he believes the project can be completed, but as a proponent to the proposal, not having any collateral worries him.
Ryan Kelley told Rubenstein that at this point he was not going to support the loan extension.
Rubenstein said when the county provided him with the loan, other organizations and companies saw this as a positive and decided to get on board, too.
“We have some real good momentum now,” he said. Fifteen to 20 percent is going to be spent on the local level, he added.
“We trimmed our costs. I am determined to get this across the finish line.”
Ryan Kelley told Rubenstein said he will always support the project, but could not agree to the extension when money is involved.
Rubinstein said they need not less than $900 million in financing to succeed with this project.”
Rubenstein and his company used the $625,000 loan for engineering work and to be installed on the power grid with the Imperial Irrigation District.
The plant at California 111 and Dogwood Road would have 50,000 acres of sugar cane to be grown locally. The sugar cane would then be converted into ethanol to provide green power for electricity.
The facility would also have its own wastewater treatment and a power plant.
Rubenstein two weeks ago reiterated the ethanol plant is not going to be completed overnight.
“Nothing is for sure,” he said. “I am not going to to you.”
Besides the $625,000 low-interest loan California Ethanol & Power LLC received from the county, it was given a $2.5 million grant from IID, a $37 million sales tax waiver from the California State Treasurer and most recently received a $10 million state income tax credit from Go-Biz by the state.
According to a fact sheet, low-carbon fuel standards are good for the climate by taking almost 7 million gasoline-fueled cars off the roads every year, resulting in less smog and soot particles in the air.
With more diverse fuel choices, more efficient cars and less frequent trips to the pumps, climate and energy policies, research shows, could help families save up to $1,500 a year by 2030. He also said the low-carbon fuel standards have spurred interest in the clean fuels market by up to $2 billion while generating good-paying jobs. lie