Danville Negotiates Grant Repayment for U.S. Green Energy - WSET.com - ABC13

Danville Negotiates Grant Repayment for U.S. Green Energy

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Danville Co., VA -  The city  has reached an agreement with the Virginia Tobacco Commission that if approved by City Council will refund $1.6 million given to U.S. Green Energy. In turn, the city will seek reimbursement from the company.

The refund by the city would be made in four annual installments of $400,000, with the first installment being made by June 30.

“We do not anticipate a city liability on this project,” City Manager Joe King said today. “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.”

A vote is scheduled for City Councils next meeting on Tuesday, June 17, to authorize King to enter into the agreement with the Virginia Tobacco Indemnification and Community Revitalization Commission.

In the fall of 2010, the commission issued a $1.6 million grant from its Tobacco Region Opportunity Fund through the city in exchange for a commitment from U.S. Green Energy to invest $30 million and create 372 jobs over a three-year period. These commitments have not been met.

Tobacco Commission grants must be refunded if promises are not kept. If a company cannot refund the money, the city becomes responsible to reimburse the Tobacco Commission for the grant.

Last month, a company director purchased the U.S. Green Energy 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 resuming production. Company officials tell the city that production will restart by the end of the month.

Company officials expect to receive a second cash infusion from overseas investors. They say international money lending regulations have kept the cash languishing in an overseas bank while the transfer goes through multiple reviews.
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