Monday, June 25, 2012

Genesis Poly, Yet Another Green Company that Bombed

Genesis Poly, Yet Another Green Company that Bombed:
Last week we published a post about A123 Systems, a green company that got big “stimulus” money and is now failing on all fronts. Unfortunately, we’ve got another one to show you today. This time it’s Genesis Code, a company that promised to take garbage and make a profit from it. As it turns out, that doesn’t work so well.

Notice how at about the 1:00 minute mark the CEO describes how many jobs the green company will create. He says about 40 new jobs right away, and about 120 within a couple of years. Here’s a part of the transcript.
The city pulled out plenty of stops… acting as an intermediary of sorts, by purchasing the property at 480 North Industrial Road for $850,000, money acquired through a grant with the state’s Department of Employment and Economic Development (DEED). The old Spartech site would be rented out to Genesis Poly. Along with the site purchase, Mankato lent Genesis Poly half a million dollars for equipment.
That $500,000 was stimulus money given to DEED, and applied for by the city of Mankato. Once paid back, the city could lend it out to another company. At least that was the plan.

Reality however, begged to differ.
Mankato City Councilman Mike Laven says, “I don’t think anyone of us saw a 2-month window and that closing. That wasn’t our process.”
In the spring of 2010, Genesis Poly went belly up. And with it went Mankato’s money. Along with a $100,000 loan from the Minnesota Pollution Control Agency, and another $7.44 million through a loan with U.S. Bank… 70% of which was backed by the Department of Agriculture.
Genesis Poly was in talks with the Minnesota USDA well before they went to U.S. Bank, and small government advocates are saying the USDA’s involvement could have played a role in U.S. Bank’s willingness to throw money at Genesis Poly.
To make matters worse, this is the second time the company filed bankruptcy. Indeed the company had gone “belly up” back in 2008 as well. So why on earth did government, local, state and federal, give this company so much money? To the rest of us it seems glaringly obvious this was a terrible use of money to begin with.