SunEdison has been mentioned a bit lately. I decided to bring back the info I wrote in
January after the 1/12/16 council meeting.
The SunEdison facility is located on Acacia and
Sanderson. Part of their agreement was
to maintain and landscape along the facility on Acacia and Sanderson. At the January 12, 2016 council
meeting, the consultant was asked why this had not been completed. He simply stated there was no follow through.
It was mentioned that public works had to do some maintenance on the
property. The city was reimbursed for
that cost.
The proposed amendments are below.
PROPOSED FIRST AMENDMENT TO THE AGREEMENT:
The proposed First Amendment to the Agreement is provided as Attachment No. 1,
The Amendment recitals provide an update on the current status of the project
in terms of the requirements under the Temporary Certificate of Occupancy (TCO)
and Agreement. The Amendment modifies specific sections of the original
Agreement in order to set forth the following terms:
1. Section 4 of the Agreement is amended to
allow for the extension of the TCO, subject to the submittal to the City of a
detailed construction schedule and timeline for completion of the remaining
plans and improvements.
2. Section 5 of the Agreement is amended to
specify that any extension under the TCO shall terminate on June 1, 2016. After
that date, if the work is still not complete the City may grant extensions of
time in one month increments, provided that Sun Edison pays $10,000 for each
monthly extension requested after the June 1 ,2016 date. In addition, because
the Letter of Credit for the improvements expires on June 22, 2016; any
requested extensions will require that the Letter of Credit be extended as
well.
3. Section 13 of the Agreement is amended
to change the date in which the Solar Fee is due to the City. The existing
Agreement states that the payments of the solar fee shall
Page 3 of 4 commence after the issuance of
the C of O on the first business day of December. Therefore, since the Final C
of O has not yet been issued, no payments have been made to date, and the
soonest the first payment would be due to the City is December 1,2016. Because
the solar facility has been in operation for 6 months already, and is requesting
an additional minimum 6-month extension, the Amendment requires that the
payment schedule be adjusted to have the annual payments being due on January
31't of each calendar year, with the first payment due on January 31, 2016. The
amount of the annual payment would not change from the original Agreement. Per
the schedule included as Exhibit A of the Amended Agreement, the first Solar
Fee payment due to the City is $66,500.
A new Section 18.6 is added to the Amended
Agreement regarding "Force Majeure", which recognizes that there are
acts such as severe weather events and other extreme events that may result in
delays in performance outside the control of the Developer. Such delays shall
not be deemed a default under the Agreement.
This means that if they can place blame on SCE in any way (I
even heard El Nino mentioned as a reason per the above), they are not going to
be held to that $10,000 penalty, if passed.
I received a call back from Director Elliano a little bit
after I published the original in January.
She explained that SunEdison has to adhere to the construction schedule
set forth by the city unless one of the above happens. Please note: The city administration is only
open Monday through Thursday.
Something very interesting happened during the discussion of
this agenda item. A past city council
member was sitting toward the back of the council chamber. After the vote of this agenda item, this past
council member walked out with the consultant smiling and in conversation. SunEdison’s stock has also taken at least a
90% dive over the last 6 months (approx. June 2015 to January 2016). Now, this is information that the council
should have known prior to this meeting and vote of they were on top of this
company and doing their homework.
Keeping these things in mind, check out how this discussion went. Youssef said he did not agree with the amendments. Raver asked if SunEdison was the Federal
Government (of course the consultant said no) because they acted like it. During the discussion, both Youssef and Raver
expressed that they did not agree with the amendments. Milne said something to the tone of, please
stay as close to the schedule as you can. The motion passed 5-0.
Update: SunEdison filed
Chapter 11 Bankruptcy in April. Those of
us who have been keeping an eye on this are not surprised. However, they were allowed to continue to
operate however they pleased by your city council. So in the meantime, what happens to the
operations here in Hemet?
It just so happens they were on the agenda a couple times tonight (June 14, 2016). When it was mentioned that the company filed Chapter 11, the council looked flabbergasted. So, they had no idea that just 6 months ago the company's stock had plummeted about 90%? This is concerning and for 2 possible reasons. One, they do not do their homework on companies in which they decide to conduct business. Two, they know what is happening and ignore it. Either way, it is not good for the City of Hemet. So here is what happens now, the city will take the money needed to develop/landscape from the letter of credit. The landscaping (per the contract), will be maintained by the property owners. And guess who was present for the meeting? The same council member who was present during the January meeting. Almost forgot to mention.... they will be hiring a consultant to see the project to completion.
It just so happens they were on the agenda a couple times tonight (June 14, 2016). When it was mentioned that the company filed Chapter 11, the council looked flabbergasted. So, they had no idea that just 6 months ago the company's stock had plummeted about 90%? This is concerning and for 2 possible reasons. One, they do not do their homework on companies in which they decide to conduct business. Two, they know what is happening and ignore it. Either way, it is not good for the City of Hemet. So here is what happens now, the city will take the money needed to develop/landscape from the letter of credit. The landscaping (per the contract), will be maintained by the property owners. And guess who was present for the meeting? The same council member who was present during the January meeting. Almost forgot to mention.... they will be hiring a consultant to see the project to completion.
http://money.cnn.com/quote/quote.html?symb=SUNEQ
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