Part 2
Elio plans to manufacture its vehicles in Shreveport, Louisiana at a factory previously occupied by General Motors.
In 2013 Elio Motors got a $23 million loan from RACER Trust, a group organized to redevelop old GM properties, to purchase manufacturing equipment at the plant. The real property was then purchased by Stuart Lichter, a real estate mogul that founded Los Angeles-based Industrial Realty Group LLC in 1974. Lichter sits on the Elio Motors board.
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Stuart Lichter is the president and founder of Industrial Realty Group LLC in Los Angeles.
INDUSTRIAL REALTY GROUP
Lichter, through a subsidiary called Shreveport Business Park LLC, leases several hundred thousand square feet of the plant to Elio, and though the company is not making cars there yet, it stores about $11.9 million worth of manufacturing equipment on site.
Elios Motors made a splash in Shreveport as it sold its vision of revitalizing the old plant, most recently by saying production would start there in 2019.
However, the Arizona company also caught the attention of regulators, and in 2017 the Louisiana Motor Vehicle Commission determined that Elio Motors was operating as a manufacturer and dealer without the proper licensing, a claim the company contests.
Elio Motors was fined $545,000 for violating state licensing laws and in order to appeal the ruling the company had to move $76,500 into a trust account; Elio appealed the fine to the Louisiana’s Fifth Circuit Court of Appeals, which ruled in favor of the LMVC in March 2019 by affirming the findings that the company violated the state law. Elio Motors reported related legal expenses of more than $2.7 million for the years 2019 and 2020.
When asked if the company had paid the fine, Paul Elio simply said, “We are trying to have a dialogue with them.” SEC filings said the company is in active settlement discussions.
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Elio Motors, known for its three-wheeled vehicles, went public in February 2016. The company raised nearly $17 million in funding using the StartEngine Crowdfunding platform made possible under Title IV of the 2012 Jumpstart Our Business Startups (JOBS) Act.
COURTESY OF ELIO MOTORS
Elio agreed that if it had not created 1,500 new jobs by February 2016, it would pay RACER $5,000 for each full-time job below the required number. RACER Trust has amended and extended this deadline several times, but Elio Motors still reports racking up $7.5 million in related expenses through December 2020.
The company has also reported secured loans worth more than $27 million, with the manufacturing equipment in Louisiana on the line as collateral. Elio Motors had an accumulated deficit of $215.8 million in December 2020 and a working capital deficit exceeding $104 million, according to the company's 2020 annual report.
Trouble down south
Elio plans to manufacture its vehicles in Shreveport, Louisiana at a factory previously occupied by General Motors. In 2013 Elio Motors got a $23 million loan from RACER Trust, a group organized to redevelop old GM properties, to purchase manufacturing equipment at the plant. The real property was then purchased by Stuart Lichter, a real estate mogul that founded Los Angeles-based Industrial Realty Group LLC in 1974. Lichter sits on the Elio Motors board.
EnlargeStuart Lichter is the president and founder of Industrial Realty Group LLC in Los Angeles.
INDUSTRIAL REALTY GROUP
Lichter, through a subsidiary called Shreveport Business Park LLC, leases several hundred thousand square feet of the plant to Elio, and though the company is not making cars there yet, it stores about $11.9 million worth of manufacturing equipment on site.
Elios Motors made a splash in Shreveport as it sold its vision of revitalizing the old plant, most recently by saying production would start there in 2019.
However, the Arizona company also caught the attention of regulators, and in 2017 the Louisiana Motor Vehicle Commission determined that Elio Motors was operating as a manufacturer and dealer without the proper licensing, a claim the company contests.
Elio Motors was fined $545,000 for violating state licensing laws and in order to appeal the ruling the company had to move $76,500 into a trust account; Elio appealed the fine to the Louisiana’s Fifth Circuit Court of Appeals, which ruled in favor of the LMVC in March 2019 by affirming the findings that the company violated the state law. Elio Motors reported related legal expenses of more than $2.7 million for the years 2019 and 2020.
When asked if the company had paid the fine, Paul Elio simply said, “We are trying to have a dialogue with them.” SEC filings said the company is in active settlement discussions.
Promises made
What's more, the company is locked into promises it made years ago assuming it would be selling cars by now. In 2013, as part of its purchase agreement to buy manufacturing equipment from RACER Trust, Elio Motors agreed to create 1,500 jobs in Shreveport.
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Elio Motors, known for its three-wheeled vehicles, went public in February 2016. The company raised nearly $17 million in funding using the StartEngine Crowdfunding platform made possible under Title IV of the 2012 Jumpstart Our Business Startups (JOBS) Act.
COURTESY OF ELIO MOTORS
Elio agreed that if it had not created 1,500 new jobs by February 2016, it would pay RACER $5,000 for each full-time job below the required number. RACER Trust has amended and extended this deadline several times, but Elio Motors still reports racking up $7.5 million in related expenses through December 2020.
The company has also reported secured loans worth more than $27 million, with the manufacturing equipment in Louisiana on the line as collateral. Elio Motors had an accumulated deficit of $215.8 million in December 2020 and a working capital deficit exceeding $104 million, according to the company's 2020 annual report.
Enlarge
