Portland to foot SoloPower’s bill after company defaults on $10 million loan

Source: By Jessica Floum, The Oregonian • Posted: Monday, June 19, 2017

A company once pursued for its promise of green jobs will cost the City of Portland $5 million after defaulting on a $10 million state loan.

Portland paid millions to lure SoloPower Systems to the city but will now have to pay much of the $8.1 million left on a state loan the company failed to pay. The Portland Business Journal reported Wednesday that the company defaulted on a $10 million loan from the Oregon Department of Energy. It stopped making payments in September. Portland made two payments of $119,000 toward the loan in April and May, said Oregon Department of Energy spokeswoman Rachel Wray.

Portland will now have to make $119,000 monthly payments toward the company’s debt through October 2020 because former Mayor Sam Adams agreed in 2011 to guarantee $5 million of the state loan. The money will come from Portland’s Bureau of Transportation, but Prosper Portland, formerly the Portland Development Commission, will spend $5 million in urban renewal money on a parking garage the bureau is building in the River District, said Prosper Portland spokesman Shawn Uhlman.

Adams cut the deal in an effort to persuade the company to open a $340 million solar panel plant in North Portland. The company planned to immediately employee 170 people and to hire as many as 500 employees.

At the time, former Portland Development Commission Director Scott Andrews called guaranteeing the loan “a very low risk deal,” according to minutes from a May 2011 commission meeting. The commission’s former business recruitment manager, Colin Sears, emphasized in the meeting that the state had done “extensive due diligence.”

“They took all the steps they possibly could to ensure it was a wise investment,” Uhlman said.

 After that, the company quickly fell from grace, shuttering its Oregon operations in 2014.

In July 2011, Standard & Poor’s classified a federal loan to the company a junk loan.

By February 2013, the company had failed to meet job and production goals, faced mounting financial pressure, defaulted on its $10 million loan for the first time, and were negotiating to refinance a $197 million federal loan commitment. The company shut down its Oregon plant one month later after laying of 61 people in California. SoloPower made up its delinquent payments in July 2013, but defaulted again last September.

“The plant is currently in cold-idle, but we’re hopeful that the company will acquire additional investment capital to resume operations,” Wray said.