California Loans Planned for State Agency That Aided Solyndra
February 15, 2012, 4:14 AM EST
By James Nash
Feb. 15 (Bloomberg) — California is working with banks to develop low-interest loans for owners of commercial and industrial property to finance upgrades that curb energy use, state Controller John Chiang said.
A pool of funds would be made available under criteria set by the California Alternative Energy and Advanced Transportation Financing Authority, Chiang said yesterday in a telephone interview. Legislation fleshing out the proposal will be introduced this year, he said.
The authority, whose five members include both Chiang and state Treasurer Bill Lockyer, came under scrutiny last year for awarding more than $25 million in tax relief to Solyndra LLC, the now-bankrupt solar-panel manufacturer.
“We’re hoping this moves money off the sidelines,” said Chiang, a 49-year-old Democrat, who declined to identify the banks the state is working with. “We have a lot of dislocated workers because of what happened in the real-estate and financial sectors in 2007 and 2008.”
Chiang said the bank loans would be aggregated by the state and offered at below-market interest rates to property owners to lower energy use, while the environmental retrofits would put people to work.
“As the investment bankers say, this could be a game- changer,” he said. “I don’t want to say billions off the bat but it would be a major improvement.”
While many larger businesses have been able to absorb the costs of mandated improvements in energy efficiency, smaller companies are struggling, said Matthew Hargrove, the senior vice president of governmental affairs at the California Business Properties Association, an industry trade group.
Financing ‘Harder’
“A lot of the folks you talk to will say it’s hard to come by capital,” Hargrove said by telephone. “It’s harder to get financing for something that takes longer to get a return on the investment.”
Last year, the alternative energy authority temporarily paused its tax-relief program to review procedures in the wake of Solyndra’s collapse. Lockyer, the authority’s chairman, defended the incentives and the program resumed by year’s end.
Joe DeAnda, a Lockyer spokesman, declined to discuss the authority’s role in the proposed loan program in a telephone interview yesterday.
Beth Mills, a spokeswoman for the California Bankers Association, said the trade group is working with Lockyer and Chiang on the program.
“We don’t really have a position until we’ve had a chance to go over all of the details,” Mills said by telephone yesterday.
In November 2010, the authority granted Solyndra a tax break on equipment for its solar-power equipment factory in Fremont, California. The break was valued at $34.7 million, according to a report from Lockyer’s office, of which Solyndra used $25.1 million.
Solyndra, which received $535 million in U.S. loan guarantees from the Energy Department, filed for court protection from creditors on Sept. 6. The bankruptcy filing prompted investigations by the FBI and congressional committees.
–Editors: Pete Young, Ted Bunker
To contact the reporters on this story: James Nash in Sacramento at Jnash24@bloomberg.net.
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.
Article source: http://www.businessweek.com/news/2012-02-15/california-loans-planned-for-state-agency-that-aided-solyndra.html
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