Published on September 8th, 2013 | by Jo Borrás
Will Caddo Parish Demolish the Elio Motors Factory?
It looked like the would-be carmakers at Elio Motors scored a slam-dunk victory a few weeks ago, when Caddo parish commissioners voted 11:1 in favor of using $7.5 million of taxpayer money to fund the purchase of the old GM Shreveport assembly plant. At first. Reports out of Caddo parish in Louisiana this week, however, might indicate that the 11:1 vote was less a comment on the commission’s faith in Elio’s 3-wheeled, Geo Metro-powered commuter and more a smart bet on copper futures.
Caddo Parish District 4 Commissioner Matthew Linn says the assembly plant purchase was motivated by a RACER Trust (aka “old GM”) deadline. “What RACER Trust did was they threatened us to tear down the building for scrap value,” explains Linn. According to Linn, RACER Trust made it clear that demolishing the facility was indeed a possibility if the commission didn’t sign on the dotted line when they did. “We believed them.”
In a local, KSLA news interview, Linn described the $7.5 million dollar purchase of the plant as a good deal. “Scrap value on the building was, two months ago, eight million forty thousand (dollars), and the price of copper has skyrocketed since then. So, it’s worth more than that now.”
The Caddo parish commission has handed operational control of the plant not to Elio Motors, as initially believed, but to Industrial Realty Group, IRG, and its president Stuart Lichter. IRG has a proven track record with GM plants, and its website touts the company’s ability to “manage all aspects of the real estate process, from acquisition through development, asset management and disposition.”
IRG will be charged with managing the entire Shreveport commercial complex, and intends to find other companies to lease the remaining space at the facility as a “first priority”. Elio Motors, for its part, will have a portion of the commercial space “reserved” for 30 mothns, while Elio Motors’ business plan unfolds and, it should be said, the price of scrap copper on the open market continues to climb. It’s also worth noting that, if Elio raises enough funding to follow through with its business plan, the Caddo parish agreement with IRG would see the real estate company investing $7.5 million into Elio.
As I read that, IRG is betting $7.5 million against Elio Motors getting their act together in the next 30 months. Still, the big winners here are – hopefully! – the people of Caddo parish, who should see a solid return on their 7.5 million tax-dollars, regardless of what happens with Elio, IRG, or RACER Trust. Good on them!