WDAM Investigates: Expensive taxpayer-bought equipment sits around

Updated: Feb. 5, 2019 at 9:30 PM CST
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HATTIESBURG, MS (WDAM) - With Stion Corporation closed and the economic black eye it caused likely to never financially heal, there’s some movement at the old plant in the Forrest County Industrial Park. Specifically, the equipment left behind.

Since that equipment was mostly paid for with taxpayer money through a $75 million loan from the state, by way of the Mississippi Development Authority, WDAM Investigates wanted to know who’s keeping an eye on all of it. Turns out, no one, even though the development authority handed out all that money.

WDAM showed up back in December to the old Stion building where all that equipment has been sitting inside, waiting for a buyer, so the state can recoup some of the money lost. We found workers loading it up, so we followed to see where the equipment was being taken. On this day, we ended up in Jones County, where workers unloaded the equipment into a vacant building.

Digging deeper, we uncovered that building is just one of four so far, where millions of dollars worth of equipment is being stored. While at the building in Jones County, no one from the state was there overseeing removal or storage and from what we saw, no security or external surveillance at any of the storage buildings.

Since that equipment was bought with your money, and a lot of it, we wanted to know who’s in charge of the operation and who’s paying for it. We found out the company that owns the building where Stion was operating, Bulk Industrial Group out of Kansas, is paying contractors to move the equipment and paying to store it. After making a call to Bulk Industrial, WDAM was told the company doesn’t however own the equipment.

After closing, Stion turned over assets, including that equipment, to Development Specialists Incorporated. That company was supposed to sell off the equipment and try to pay off creditors, including the state of Mississippi. Geoffrey Berman, with Development Specialists, said his company is no longer taking the lead on that.

“Our efforts to try and find a buyer failed at the end of October last year and we told the MDA to go do whatever they were going to do with the equipment,” said Berman.

Taking our questions to the development authority, we were initially told the agency isn’t involved with what’s happening with the equipment. It wasn’t until repeated questions from WDAM that the development authority finally released a statement, admitting the agency is in fact working to sell the equipment.

“The Mississippi Development Authority is in the process of selling the Stion equipment. We hope to complete that process soon," said the emailed statement from Melissa Scallan, Public Relations Manager with the Mississippi Development Authority.

The agency would not answer our questions as to who now owns the equipment and whether the state will reimburse Bulk Industrial for expenses in moving and storing the equipment.

“The equipment has a lien against it from the state, from the MDA. So the MDA has the first right to do anything with the equipment," said Berman.

Stion was a solar panel manufacture that shut down after only being open five years, leaving 137 people without a job. WDAM Investigates got a copy of the initial agreement between Stion and the Mississippi Development Authority, which shows the company was to create 1,000 jobs by the time it closed in 2017 and make an investment in land, building and equipment of at least $400 million by Jan. 1, 2017.

That didn’t happen. With millions of taxpayer dollars already loaned out, the development authority made an amendment to that agreement in 2015, allowing the company to instead create 500 jobs by the end of 2022 and change the investment to $250 million by the end of 2019. That won’t happen either. A letter sent to the Forrest County Board Supervisors in October of 2017 blames intense and unfair competition from foreign manufactures for the closure. That’s something board president David Hogan said caught him by surprise.

“Who knew that China was going to start making really inexpensive solar panels and flooding the U.S. market,” said Hogan during a November 2017 interview with WDAM.

As that equipment now sits, collecting dust, there’s concern as to whether it will be usable by the time the development authority finds a buyer. There’s also the question of how much taxpayer money, if any, will be spent storing it all, which the development authority won’t comment on.

News Seven Investigates found a recent lawsuit filed by the Mississippi Development Authority against four entities, including Stion and Development Specialists Incorporated, which is the company that was supposed to sell the Stion equipment. The lawsuit seeks millions of dollars for alleged wrongdoing by those companies.

It’s all an effort to get back some of the more than $90 million dollars owed to the state because of the Stion failure.

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