Stion ordered to pay $92M for failed Hattiesburg facility - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Stion ordered to pay $92M for failed Hattiesburg facility

The Stion plant in Hattiesburg officially closed on Dec. 13, 2017, laying off more than 130 employees. (Photo source: WDAM) The Stion plant in Hattiesburg officially closed on Dec. 13, 2017, laying off more than 130 employees. (Photo source: WDAM)
JACKSON, MS (WDAM) -

State Auditor Stacey Pickering and the Performance Audit Division of the Mississippi Office of the State Auditor (OSA) have issued the department's largest ever demand against Stion Corporation, in the amount of $92,943,780.86. 

In fact, in a report issued Wednesday, officials said Stion should not have been allowed to do business in Mississippi at all. 

"I would call all of these green projects a mess, on behalf of the taxpayers in the State of Mississippi," said Pickering. 

Stion Corporation, which manufactured solar panels, announced it would be closing its Hattiesburg plant in October. The plant officially closed on Dec. 13, 2017, laying off more than 130 employees. 

The OSA said Stion operated under multiple business names while conducting business with the Mississippi Development Authority (MDA) and originally signed a memorandum of understanding with MDA in 2011.

"They have not kept up their end of the bargain, they have not created the number of jobs they have committed to create locally and at the state level, they have not generated the tax revenue, so it's time for them to start paying the money back."

One of the business names that appeared on MDA-approved loan documents was a business that was not registered with the Mississippi Secretary of State. Because of this, the company should not have been authorized to conduct business within the State of Mississippi.

"They never registered with the Secretary of State's Offices, yet they received money from the Mississippi Development Authority - that should have never been allowed to happen," said Pickering. 

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 changed in 2015 to only require $250 million of capital investment by January 2020 and the creation of 500 jobs by January 2023.  

"They have not kept up their end of the bargain, they have not created the number of jobs they have committed to create locally and at the state level, they have not generated the tax revenue, so it's time for them to start paying the money back," Pickering said. 

When the plant closed, Stion only had 137 employees and capital investment information was not supplied to OSA upon request.

“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," said Pickering. "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.

In May 2017, the Hattiesburg City Council and Forrest County Board of Supervisors reached an agreement with Stion Corporation to pay a monthly fee in lieu of tax payments. According to that agreement, Stion acknowledged that it was "$2,333,354.36 in arrears on FIL amounts owed." 

Stion was to make monthly payments of $75,000 to the Forrest County Tax Collector to be divided among the city, county and Hattiesburg Public School District to repay fees in lieu of tax money owed. 

As of Oct. 23, 2017, Forrest County Board Attorney David Miller said Stion has made three payments under the agreement, for a total of $225,000.  Miller said $79,000 was paid to Forrest County, $61,000 to the city and $84,000 to the Hattiesburg Public School District.

Pickering said this potential payment through the demand would be spread between the state and local governments.

"At the end of the day, we are all taxpayers, locally or at the state level," Pickering said.  "My job as state auditor is to protect the taxpayer."

Stion Corporation will have 30 days to repay the funds to the State of Mississippi before the demand is referred to the Mississippi Attorney General’s Office for litigation.

"This will not be a short term process to recover this money, but we're committed to the long haul," said Pickering. 

Copyright WDAM 2018. All rights reserved. 

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