According to the WSJ, Envision AESC (a company majority owned by China) "quietly stopped working" on its Bowling Green plant. How much has the state given them, and when will we get it paid back? I filed an ORR and got the "FORGIVABLE LOAN AGREEMENT". Here is what I found.
AESC was approved for a $116,800,000 forgivable loan from the Commonwealth of Kentucky.
They received $55,320,431.73 in April of 2023 and $49,799,568.27 in June of 2023, totaling $105,120,000.
How do they get the loan forgiven?
The contract requires they hit certain job targets with total compensation of those jobs (including benefits) averaging $39.88. The job targets start on 12/31/29 with a target of 772 jobs, then works up to 2,000 jobs with the last date being 12/31/2043. If they fail to hit the job targets they will start repaying the loan over that same length of time.
According to Beshear's own press releases, the plant was supposed to be open early 2025 and reach full capacity by 2027. While Beshear was selling a plant opening of early this year, what was really being agreed to was an opening by December of 2029 with full capacity not being reached till December of 2031, five years later than Beshear's public statements.
If Envision AESC Bowling Green LLC fails to hit its targets and does not declare bankruptcy, the state will not recoup all of its money until 2043.
If the plant ends up succeeding and does deliver on the 2,000 jobs, that will create a payroll (including benefits) of about $166,000,000 a year. If the state is somehow able to collect 10% of that in taxes (one way or another), it will take just over 7 years for the state to recoup the initial investment.
This assumes that every person working there would not work another job elsewhere and all of the payroll would be new payroll we wouldn't have otherwise. That is very unlikely.
Also worth noting that the Economic Development Cabinet denied part of my request as they claimed there were too many documents and some of it taxpayers are not allowed to know. I guess when they take millions of our dollars and give them to a private company, some of it is none of our business.
In the contract there is a clause that states if AESC shuts down the project, we are supposed to get our money back upon demand from the state. I would love to know if the state has even asked them about the completion of the project after the Wall Street Journal article. After the WSJ article, AESC spokesperson Brad Grantham said: “We are continuing to move forward with infrastructure improvements on site”.
The WSJ article is still up. You'd think a company that has to pay back $105,000,000 if they do stop the project would demand a retraction from the WSJ or would sue them for libel.
Does the Beshear Administration know that Envision AESC Bowling Green will not complete the project but will not send the demand letter because it would put egg on Beshear's face? A massive economic development failure like that would certainly hurt Beshear's presidential aspirations.