SHREVEPORT, LA (KSLA) - Elio Motors is getting still more time to start production on their 3-wheeled vehicle and create the 1,500 jobs promised as part of a $23 million loan agreement for the purchase of equipment at the former GM plant in Shreveport.
The original deal struck in 2013 with the RACER Trust required the startup automaker to start production and create 1,500 direct full-time jobs by the end of 2015 or face stiff penalties that included $5,000 for each promised job not created.
By February 2015, there were still no cars coming off the line. RACER Trust redevelopment manager Bruce Rasher told KSLA News 12 that Elio wouldn't be penalized because they were working on an extension.
By September, Elio had pushed the start of production pushed back yet again, this time to early 2016.
The deadline was ultimately extended another year to February 28, 2016. When Elio Motors failed to meet that deadline, RACER Trust agreed to extend it to July 1, 2017.
Now, just weeks after Elio Motors CEO Paul Elio openly admitted that the company would not be meeting the July deadline, another extension has been granted.
According to documents filed with the SEC Wednesday, Elio Motors now has until February 1, 2019 to start production and until September 1, 2019 to create the jobs.
According to a statement released by the RACER Trust late Thursday, the decision to extend came after "a thorough review of the company's recently filed financial statements and current plans to raise the capital it needs using an experienced investment bank, and the recommendation of the Louisiana Economic Development."
However, the statement continues, "If another prospect emerges to utilize the space currently reserved for Elio Motors, the building's primary lessee, Shreveport Business Park, has contractual flexibility to relocate Elio Motors to another facility in Caddo Parish."
In October, RACER Trust representative Rick Zablocki told state legislators the trust would consult with Caddo Commissioners before extending the jobs deadline again.
In Thursday's statement, RACER pointed to an April 28 letter from LED Secretary Don Pierson to Elio stating that an extension to September 2019 is "'in the best interest of the efforts of Elio Motors, the RACER Trust and the potential for future facility use'" and a follow up with Caddo Parish administrative staff after Elio himself briefed commissioners in late May as evidence that the trust's promise to consult with the state and the parish had been fulfilled.
Elio is also getting more time to pay back their loan to RACER Trust. According to Wednesday's SEC filing, the company hasn't made any of their monthly $173,500 payments since October 2016.
As a result, Elio currently owes more than $1.7 million in back payments to RACER Trust. While the default interest rate of 18% will continue to add up until payments resume, the company now has another year to pay back the principal on the loan.
The extensions come just weeks after the company's May 2 filing with the Securities and Exchange Commission, which revealed concerns that Elio may be unable to survive another year without additional loans and stock offerings.