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Hazelwood Still Waiting For Emerald Automotive To Find The Millions It Needs To Build Van Plant

Mary Delach Leonard | St. Louis Public Radio and The Beacon

The year ended as it began for Hazelwood city leaders who in 2011 backed a British startup that plans to build energy-efficient delivery vans: They’re still waiting for Emerald Automotive to find about $160 million in private funds.

David Cox, Hazelwood’s economic director, said he remains optimistic that the project will eventually happen. Hazelwood has loaned Emerald $3 million, and the Missouri Technology Corporation kicked in another $2 million.

“They’re still working on plan B and keeping up with the loan agreement,’’ Cox said.

Gary Marble, Emerald’s sales and communications director, urged continued patience because the quest is for such a large investment of private money.

“I can tell you we are doing extremely well. We’re in a very good position. Very soon we hope to have some very good news and that’s about as specific as I can be,’’ said Marble in a recent phone interview. Marble said he was in England to consult with the Emerald leadership team.

In July 2011, Emerald announced plans to build an assembly hub in Hazelwood to produce the low-emission t-001, a hybrid electric van developed in the United Kingdom. The company estimated that it would create up to 600 jobs -- welcome news for the St. Louis region that lost nearly 9,000 auto manufacturing jobs between 2006 and 2009, including 2,500 jobs at a Ford plant in Hazelwood. The well-publicized announcement followed months of behind-the-scenes negotiations between Emerald and officials from Hazelwood, the state of Missouri and the St. Louis Regional Chamber.

The original timetable called for the plant to be producing vans by 2014, but that was pushed back when the company turned its sights on private funds. The company had originally hoped to snag a $100 million-plus loan from the U.S. Department of Energy's Advanced Technology Vehicle Manufacturing Program but withdrew that application in 2012 after federal energy loans stalled in the wake of the Solyndra controversy. Solyndra, a solar-panel manufacturer, went bankrupt after getting a $535 million DOE loan.

Emerald was formed to produce the energy-efficient t-001 delivery van in North America through a partnership of Intelligent Energy and AGT Strategic Consultants, which are UK-based companies that developed the vehicle. Andy Tempest, the CEO of Emerald, has been a major player in both companies. The company also got a $5 million grant from the British government's Technology Strategy Board.

Last January, Marble told the St. Louis Beacon that investment prospects looked good and the goal was to build a few vehicles by the end of 2014 and be in full production in 2015. In the interview last week, he declined to give a timetable because he said there are too many moving parts.

“Anyone who has ever started a business knows the difficulties you bump against to get the funding and to get the business started. We’re basically that story on steroids. Not only do we have to start a new company with private money, but we’re building a product that’s never been done,’’ Marble said. “When it’s all said and done -- when people look back -- this is exactly how things should be done. With a local government, a state, and a private company working with private investors and private companies throughout the world to get a project completed. But it takes time.’’

Marble said that Tempest and Rian Urding, Emerald’s chief financial officer, have  talked to investors throughout the world and several have indicated various levels of interest.

“We now are getting much closer to getting a vision of how this is going to work: getting the right people in the right places and the right parts together,’’ Marble said. “That’s really been the key.''

Marble said he understands that waiting is frustrating, but he insisted that the company is making progress and hopes to release more specific information “very soon.”

“Up until now we’ve been extremely vague, and we have to be,’’ he said. “We are under nondisclosure agreements with everyone we’re talking to, and we just can’t say anything.’’ 

Credit Mary Delach Leonard | St. Louis Public Radio and The Beacon
Emerald Automotive leases office space in the historic Knobbe House owned by Hazelwood.

Marble said that Emerald remains committed to building the plant in Hazelwood, but he declined to give potential sites.

“We have no intention of going anywhere else,’’ he said. “Andy [Tempest] has committed to that from the beginning in large part due to the faith that the city leaders of Hazelwood have put in us. They’ve been great partners. Going in, they understood this was not going to be easy and they’ve been there every step of the way. The vans will be built in Hazelwood. I can’t say exactly where. It’s still being explored.’’

Cox said that the city council has been willing to work with Emerald, and he expects that to continue on Jan. 15, when members will consider the contract between the city and Emerald. He expects that any changes would relate to target dates.

According to the loan agreement, the company has until 2018 to build the plant, Cox said. At that point Emerald would either have to pay back the loan or give Hazelwood its intellectual property.

Cox stressed that Emerald remains in compliance regarding the terms of the loan and has kept city officials informed. The company leases office space in the city-owned Knobbe House in Brookes Park at $2,000 month.

“They’ve always been up front and candid with us and kept us apprised of what’s happening,’’ Cox said. “And we’ve always been able to work out something with them.’’

Read earlier coverage from The Beacon:

How goes Emerald Auto's plan to bring a van assembly plant and 600 jobs to Hazelwood?

Mary Delach Leonard is a veteran journalist who joined the St. Louis Beacon staff in April 2008 after a 17-year career at the St. Louis Post-Dispatch, where she was a reporter and an editor in the features section. Her work has been cited for awards by the Missouri Associated Press Managing Editors, the Missouri Press Association and the Illinois Press Association. In 2010, the Bar Association of Metropolitan St. Louis honored her with a Spirit of Justice Award in recognition of her work on the housing crisis. Leonard began her newspaper career at the Belleville News-Democrat after earning a degree in mass communications from Southern Illinois University-Edwardsville, where she now serves as an adjunct faculty member. She is partial to pomeranians and Cardinals.