Last Updated on October 31, 2015 by cassnetwork
The following announcement was posted on the City of Logansport’s Facebook page this afternoon:
“The City of Logansport confirmed today that $3 Million dollars has been deposited by Millennium Energy Corporation and made available to SG Preston and its affiliates. The deposit will support the implementation of Preston’s agreements with the Logansport Municipal Utilities, pertaining to the development of new power generation facilities in Logansport.
Millennium Energy Corporation, SG Preston and the City of Logansport understand that under the terms of the negotiated agreements, SG Preston is required to place in escrow the sum of One Million Seven Hundred Fifty Thousand Dollars ($1,750,000).
The funds deposited today exceed that amount and is intended to show a greater commitment than necessary to complete the project.
It is also understood that SG Preston and its affiliates have commitments for other sources of funding of up to Three Hundred Million ($300,000,000).
The confirmation of this funding will ensure that 31 jobs will be spared at the existing LMU generating plant and that 70 more will be created.”
In an e-mail sent at 3:47 this afternoon, Cheryl Alcorn, administrative assistant for the Logansport mayor’s office, said the mayor would like to share a letter received today regarding the SG Preston Escrow fund for the City of Logansport’s power plant.
The letter, from Millennium Energy Corporation in New York, is addressed to Mayor Ted Franklin and LMU Superintendent Paul Hartman and reads:
“This letter is submitted on behalf of Millenium Energy Corporation (“MENC”). At the request of SGP Energy Logansport, LLC (“SGP”), MENC hereby confirms that it has made available and will set aside three million dollars ($3,000,000). These funds will be made available to SGP and its affiliates and will, if necessary, support SGP’s implementation of its agreements with the City of Logansport, Indiana, after these agreements are finalized and fully approved by the Logansport Municipal Utilities (“LMU”) and by all appropriate agencies and entities within the City.
MENC understands that under the Build Operate Transfer Agreement (“BOTA) negotiated by the City and by SGP, SGP will be required to place in escrow the sum of one million seven hundred fifty thousand dollars ($1,750,000). The funds being made available by Millennium exceed this amount. As shown in the attached document*, the funds committed by MENC are held in an account at Bank of America.
We understand that SGP and its affiliates have other sources of funding. Nothing in this letter requires SGP or any of its affiliates to accept financing from Millenium.
Likewise, we understand that SGP’s commitment to this transaction will require a much larger equity commitment, and SGP may replace our equity commitment with other financing, at its sole discretion.
Please feel free to contact me directly at any time with any questions that you may have at 856-667-4300.”
The letter is signed by Michael Fuoco, Chief Executive Officer, Millenium Energy Corp.
The Utility Service Board and Logansport City Council approved, ratified and confirmed agreements with SGP Energy Logansport LLC earlier this month. A public hearing and final vote to approve the contracts was set to happen at the Board of Public Works meeting on Oct. 21. At the meeting, a lawyer for the city said attorneys for SG Preston had asked that the vote be delayed. No additional meetings have been announced.
SG Preston is also working on a biodiesel project in Logansport, for which the Logansport City Council approved a $550,000 forgivable loan to the company in December.
*Editor’s Note: No additional documents were attached to the copy of the letter we received.