Higgins to supes: Silicor must put up or shut up

December 4, 2012 10:36:34 AM

Jeff Clark - [email protected]


Golden Triangle Development Link CEO Joe Max Higgins didn't mince words Monday when discussing the future of Mississippi Silicon with the Lowndes County Board of Supervisors. 


"It's time to fish or cut bait," Higgins told the board during its regular meeting Monday.  


Mississippi Silicon is a phase one silicon metal producer that was once Silicor Materials, originally Calisolar. In November, Higgins told the board the company will miss its second deadline for the beginning of phase one construction. He met with the board Monday to present his recommendations as to how Lowndes County should proceed in dealing with the manufacturer. 


"This project does not have secured funding," Higgins said. "We have met with the bankers on this and they haven't even received an application on the project. They believe the funding will become available in April 2013. We have had talks with the company about missing the deadlines and June 30 seems to be a workable deadline. We have asked them to place $150,000 in escrow to ensure performance. You would have thought we had asked for their first-born male child. There was a lot of screaming and gnashing of the teeth. They have not yet accepted our offer and they are saying they are looking to locate at other locations." 


After dealing with the project and its delays for more than a year, Higgins said it was time for the board to issue some ultimatums, including a Dec. 31 deadline with a financial commitment attached. 


"As the New Year ball starts dropping on Dec. 31, they either put up the $150,000 in escrow or it's over," Higgins said. "Then, they either meet the June 30 deadline or it's over. If they don't start on time, they lose the escrow money. I think we are doing a huge disservice to our citizens because we haven't been able to work on other projects. It is time -- this either happens or it doesn't. It's time for the company to put up some money in good faith. We have done everything we were asked to do. We are better than this and we can compete better than this." 


The board took Higgins' stern words to heart and unanimously voted to enforce the escrow and startup deadline. 


In September 2011, Calisolar announced its plans to locate in Lowndes County. Upon the announcement, state lawmakers approved a $75.25 million incentive package to lure the company to Mississippi. The plan includes a $59.5 million equipment and construction loan, along with $11.25 million for infrastructure and an additional $4.5 million for local workforce training. Lowndes County gave an additional $19 million in financial incentives. According to Higgins, Calisolar investors, which include venture capitalist John Correnti and Global Principal Partners and the German Export Bank, were given a deadline of Sept. 2, 2012 in which the construction on phase one of the two-phase project was to have started. After missing that deadline due to a lack of funding, the company, now known as Silicor Materials, was given an extended deadline of Dec. 31 to begin phase one construction. 


"At some point over the past few months, what was once a memorandum of understanding (MOU) with Silicor with two phases, a silicon metal production phase and a second silicon purification phase, was then changed to two MOUs with Mississippi Silicon doing the production phase and Silicor Materials doing the purification phase," Higgins said. "But no MOU has been signed. There has only been a verbal agreement. Even though it's now two separate projects, it has a lot of the same investors." 


Higgins said originally Calisolar was looking at property east of Industrial Park Road, directly behind Mitchell Distributing. The property the county will hold until June 30, if the escrow money is made available, is a 90-acre campus behind Weyerhaeuser, south of Artesia Road. A site for phase two must be purchased by the investors from a private citizen. The board also voted Monday to require the investors to put up an additional $50,000 to show good faith on purchasing the additional property. 


"(The investors) selected the site," Higgins said. "We did all of the due diligence work on the site and then they changed their minds. We've spent some money on this thing with legal fees and environmental studies and such. That's why they need to put up this escrow money." 




Show me the money 


Higgins said he had been working with the county on trying to make the project happen long before then-Gov. Haley Barbour called a special session in September 2011 to approve the $75.25 million in incentives for the Calisolar investors. He said he was somewhat leery of the project when Sen. Terry Brown approached him about it because of Correnti's track record. 


"When we first met with them, and this is the same people who did the financing for Severstal, they told us they had the financing and they were ready to go," Higgins said. "But they haven't even submitted a financial application to their primary bank and the project will have to be audited before the money is lent. They think they could have this done by April which is why we gave them the June 30 deadline. But we've already read the book when it comes to dealing with this team.  


"Yes, they brought Severstal to Lowndes County, but they were also going to bring a rebar plant, but they demanded too much. So then they were going to take it to Noxubee County and old Ike Brown proved too much for them. The next thing you know, Amory is their best friend and they left Amory hanging -- this after they had already promised to bring steel mill to Amory years ago. So they left Amory hanging.  


"They have tried to get money for five years from everyone from the Chinese to the terrorists to build a rebar plant and it hasn't happened. The guy that was able to bring Severstal to Columbus couldn't even bring a rebar plant to Amory. Remember when we heard West Point was getting a steel mill? It was the same people." 


With the project on hold for more than a year, Higgins said the lack of action has hurt industrial development for the area. 


"We have already had companies interested in Columbus, but they didn't want to come behind the 971 jobs with a salary of $45,000 that this company has promised," he said. "These investors have had us standing in line, clogging up sewer and electricity, and other companies think they can't compete. We lost a pipe manufacturer to Houston, Texas." 




Cautiously optimistic 


Although Higgins and the county leaders are frustrated with the delays and lack of funding, Higgins and District 1 Supervisor and Board President Harry Sanders both were optimistic Monday afternoon the Dec. 31 financial deadline would be met. 


"There is a well-known global company that has stepped in and has 67 percent of the equity in the project," Higgins said. "The company is remaining anonymous to the public right now, but they are a well-ran, big-deal company. I would like to see this project come to fruition." 


Sanders concurred with Higgins on the anonymous investor and said he has not yet given up on the project. 


"Silicon metals is a commodity and it is traded as such," Sanders said. "It's a very old technology. It's used in many products, from car wheels to cosmetics. I really think the majority investor will see this project to completion."