Red Rock Biofuels logistics manager Will Roberts told the Lakeview Rotary Club April 21 that the proposed multi-million dollar biofuel project planned for Lake County has run out of money and will need to sell bonds to get back on track.
The infrastructure and equipment already built and installed at the Red Rock site outside Lakeview is worth about $300 million, Roberts said. Red Rock will leverage those assets for new bond funding. Those bonds will start being sold at the end of May or beginning of June, Roberts said.
“Banks or corporations or private individuals have to purchase those so it may take some time or it may be very quick,” Roberts said. “If that all goes through, they’ll start constructing as soon as possible.”
After the time it will take for the bonds to be issued, sold and then to complete construction, Roberts said work at the plant could be finished as early as December.
About 75% of the project’s original scope has been completed but Roberts said they are planning to expand its scope and production even before they begin operations.
The redesigns will “make us a lot more money than what it will cost,” said Roberts, adding “now is the time to do it.”
Those redesigns have also contributed to some of the money issues, Roberts said. The project began four years ago, while the bond funding started two and a half years ago.
There have been plenty of problems along the way. In addition to increased material costs as the years went by, a Texas company that Red Rocks paid to build skids that are used to mount the plant filed for bankruptcy after Red Rock paid for the majority of the skids in advance.
“They didn’t even buy the material,” Roberts said. “I heard they had bought some handrail paint with the money we had given them. So that’s being solved in the courts.”
Those issues combined, with challenges brought on by the pandemic, contributed to Red Rock running out of funding, the company claimed.
The company also kept about 30 employees on payroll while operations were paused
“For about six months we were paying hourly employees to sit at home and not train,” Roberts said. “The thought behind that decision was, ‘If we lose 30 employees, how are we going to get 30 employees back when this starts up?’” he noted.
The company decided to take that risk at the time, but word came sometime in March that there was no more money. The Examiner was previously unable to reach Red Rock about the status of the project.