State officials have denied a Colombian businessman's request for a 90-day extension to get his finances in order while he tries to turn a profit with a cane mill.
The Advocate reports (http://bit.ly/GPlSVt) members of the Louisiana Agricultural Finance Authority thumbed through the charts Friday, listened to Luis Santacoloma's offer, met privately to discuss it and then publicly rejected it.
Already late on roughly $3 million in payments to the state and the bank, Sanatacoloma offered to relinquish the Lacassine mill to the state if his efforts to quickly generate cash failed.
LAFA's chairman, state Agriculture and Forestry Commissioner Mike Strain, told Santacoloma to immediately pay the money he owes.
"All creditors are not current. Therefore, you are in default," Strain said.
For state government, millions of dollars are at stake. The state built the mill and still owes $16.2 million in construction costs. The state also guaranteed $6.3 million in bank loans designed to make the mill a success.
The Lacassine mill is a hallmark of longtime state Agriculture Commissioner Bob Odom's administration. Odom used state dollars and state workers to build the facility in Jefferson Davis Parish. Concern started to set in by the time Odom proposed a similar facility for the Bunkie area. State officials rejected the Bunkie project after questioning whether it would be a financial success.
Strain called the Lacassine mill a boondoggle when he ran against Odom in 2007. The election ended Odom's decades-long tenure at the state Department of Agriculture and Forestry.
Five years later, the idea of using cane, rather than corn, to create a profit-generating ethanol industry still is an unproven experiment in the United States.
Santacoloma and his brother, Alejandro, relocated from their native Colombia to Lake Charles with plans to make the venture a success. They entered into an agreement to buy the mill from the state and borrowed money from banks to purchase the parts for an ethanol plant.
The mill did process sugarcane into syrup and soon fell idle when it became clear that enough sugarcane wasn't being brought in to justify the expense of operating the mill.
The parts to make the ethanol plant still are in pieces on the site.
Strain has been working with the Santacolomas to make the mill a success amid a struggling national economy.
Luis Santacoloma is vice president of Louisiana Green Fuels Group, or LGFG. LGFG owns the bulk of Lake Charles LLC, which is buying the mill from the state.
In five years, Lake Charles LLC has struggled to generate revenue and to repay loans.
After the board rejected the proposal, Santacoloma said he will sit down Monday with the state's attorneys to discuss whether he can meet the payment demand.
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Information from: The Advocate, http://theadvocate.com