Us Senator Vitter Introduces Autocycle Safety Act - S.685

[WilliamH]

Keep in mind that EM is already receiving alot of favorable State and local government support, which is a positive, in building the dream. I'm in favor of government support, just don't trust some political motivations in the real world when one starts politicing to change Federal Legislation to meet their personal needs.

That is not accurate.
Elio is not actually receiving any State or local aid.

 

[Chris F]

I didn't realize there were 2 programs; you are correct. Sorry for any confusion I may have caused. Either way, it seems to hinge on proving that the engine gets at least 75 MPG.

 

[Chris F]

Actually, they are getting local aid, since they had the IDA buy the Plant and lease it back to a company affiliated with an Elio board member. Municipal bond interest rates are lower than commercial rates.

 

[Chris F]

There may be other state or local incentives as well, such as job training or other credits. That is very common.

 

[WilliamH]

Actually, they are getting local aid, since they had the IDA buy the Plant and lease it back to a company affiliated with an Elio board member. Municipal bond interest rates are lower than commercial rates.

You really need to read that again.
That has nothing to do with any aid program.
Caddo could have either ripped it down or IDA could have bought it.
Caddo did the more economically sound method.
That is not a grant of any kind. They are paying rent.

 

[Ty]

That is not accurate.
Elio is not actually receiving any State or local aid.

There are several States that are putting legislation on the "to-do" list. Monetarily, they aren't receiving aid (other than that factory...) from States but they are getting "support".

 

[Ty]

You really need to read that again.
That has nothing to do with any aid program.
Caddo could have either ripped it down or IDA could have bought it.
Caddo did the more economically sound method.
That is not a grant of any kind. They are paying rent.

Caddo Parish still has money tied up in the plant which would have cost Elio a lot more money in interest if nothing else. That helps.

 

[WilliamH]

Caddo Parish still has money tied up in the plant which would have cost Elio a lot more money in interest if nothing else. That helps.

So if you have the choice of ripping a building down at $8.5 mill (not counting toxic remediation) or purchasing it for $7.5 mill; and re-leasing it at a profit, which are you going to do? It would have cost more to rip it down than to buy it.

 

[Chris F]

You really need to read that again.
That has nothing to do with any aid program.
Caddo could have either ripped it down or IDA could have bought it.
Caddo did the more economically sound method.
That is not a grant of any kind. They are paying rent.

I didn't say it was a "grant," I said it was a subsidy. The purpose of the IDA is "Industrial Development." By using municipal bond financing, that subsidizes the manufacturer because its real estate costs are lower. If a private entity bought the plant and leased it to Elio, its costs of financing would have been higher. Plus, if the Plant is owned by the IDA, it does not pay real estate taxes, since it is a government agency. That also lowers carrying costs substantially. Usually, the leasee pays fee in lieu of taxes that is substantially lower than the real estate taxes would be. Through this method, the IDA lowers the operating costs of the manufacturer in exchange for the jobs the manufacturer agrees to create.

 

[Ty]

So if you have the choice of ripping a building down at $8.5 mill (not counting toxic remediation) or purchasing it for $7.5 mill; and re-leasing it at a profit, which are you going to do? It would have cost more to rip it down than to buy it.

Taxpayers and one of the Shreveport council people were miffed that they "took a chance" with Elio rather than getting the certain money up front. Now, Shreveport has a factory that they are renting out in the hopes that they come out ahead. Of course, I would take the chance. Politicians are a little different though...