Today, State Auditor Stacey Pickering and the Performance Audit Division of the Mississippi Office of the State Auditor (OSA) issued the largest ever demand issued by OSA against Stion Corporation in the amount of $92,943,780.86.
Stion Corporation, which manufactured solar panels, operated under multiple business names during its business with Mississippi Development Authority (MDA) and originally signed a memorandum of understanding (MOU) with MDA in 2011. One of the business names appearing on MDA-approved loan documents included a business that was not registered with the Mississippi Secretary of State. Due to this fact, they should not have been authorized to conduct business within the State of Mississippi.
The $75 Million loan from MDA was originally contingent upon Stion Corporation making a
$400 Million capital investment in the project before January 2017 and creating 1,000 jobs within six years of operation. The agreement was amended in 2015 to only require $250 Million of capital investment by January 2020 and the creation of 500 jobs by January 2023. As of October 2017, OSA determined that Stion Corporation had only hired 137 employees; capital investment information was not supplied to OSA upon request.
Additionally, as part of a local agreement between Stion Corporation and Hattiesburg; Forrest County; and the Forrest County Tax Assessor, the corporation was allowed to pay a fee to these entities in lieu of ad valorem property taxes. Stion Corporation also failed to properly pay this fee, resulting in over $2 Million being owed to Hattiesburg and Forrest County.
After multiple amendments to the loan agreement, in October 2013, MDA agreed to allow biannual interest-only payments from Stion until January 2017; at that time, a payment schedule to repay all outstanding amounts of the loan by the end of December 2025. Stion Corporation did not pay the final interest-only payment (December 2016) and did not begin regular payments in January 2017. Therefore, OSA finds that Stion has defaulted on the loan received from MDA.
On October 13, 2017, Stion Corporation announced to MDA and the Area Development Partnership in Hattiesburg that it was closing its Hattiesburg facility. This closure leaves 137 Mississippians without jobs and is another failed “Green Project” in Mississippi in which millions of taxpayer dollars have been lost.
State Auditor Stacey Pickering said, “Stion is just one more example of a risky investment made by Mississippi in which the company and its management did not keep their commitments. Today is the first step to begin the process of recovering monies on behalf of Mississippi taxpayers.”
Included in the amount of the demand are the original loan principal, interest on the loan, statutory interest charges from OSA, fees owed to Hattiesburg and Forrest County in lieu of taxes, and recovery costs.
Stion Corporation will have 30 days to repay the funds to the State of Mississippi before the demand is referred to the Office of the Attorney General State of Mississippi for litigation.
Mississippi has lost more than $230 Million in the failed economic development projects listed below since 2010. A detailed report detailing these projects and others is forthcoming from OSA.
· GreenTech Automotive
· MS forge, Inc.
· MS Beef Processors
· Sanderson Plumbing
· Southern Airways Corporation
· Twin Creeks
· WPG America, Inc
State Auditor Stacey Pickering Press Release