State spent millions but sugar mill sits idle - KPLC 7 News, Lake Charles, Louisiana

State spent millions but sugar mill sits idle

By Brandon Richards- bio | email

LACASSINE, LA (KPLC-TV) – It seemed like a good idea at the time.

In 2006, under pressure from former Agriculture Commissioner Bob Odom, the state agreed to use $45 million of taxpayer money to construct the Lacassine Sugar Mill in rural Jeff Davis Parish.

The idea was that the mill would help area sugar farmers by lowering their transportation costs. Currently, sugar farmers in SWLA have to send their harvested crops to the New Iberia area. The mill would turn the farmers' harvested sugar cane into syrup. Syrup is much cheaper and easier to transport than cane.

But four years later, the mill sits idle.

The owner, Louisiana Green Fuels, a private company owned by the Santacoloma family, said it makes no sense to operate the sugar mill on the current acreage. They say many area sugar farmers have gone out of business.

The company said it has been struggling like everyone else over the last couple of years because of the economy.

They have had to work with lenders to repay loans and to make matters worse they have lost key investors.

The owners have still managed to invest millions of dollars into ethanol technology. In fact, before purchasing the facility from the state, Louisiana Green Fuels said it planned on building an ethanol facility next to the sugar mill.  

The company has made all of the interest payments it agreed to pay to the state when it bought the mill for $60 million.

But given the company's financial struggles over the last few years, some lawmakers have wondered if it will be able to make the first full payment of $2 million in 2011.

"There have been issues," said State Senator Dan "Blade" Morrish, R-Jennings. "There continues to be some problems, obviously financial problems."

Company spokesman Alejandro "Alex" Santacoloma said Louisiana Green Fuels have made all the payments so far and would continue to do so in the future.

Santacoloma said while things haven't been easy, the mill's future is looking good. Santacoloma also said the company's financial issues were being worked out.

Morrish said while taxpayers certainly need to be worried about whether or not the state will get the money it was promised, he said it is too early to make predictions.

"The jury is still out. It may turn out to be a very good investment," said Morrish. "If as [Louisiana Agriculture] Commissioner Strain said, the Santacoloma family finds a partner, an equity partner, this thing could become a very viable working interest."

If the company were not able to make the annual payments, the state may have to take the idle mill back under its ownership and then explore its options.

7 News contacted Louisiana Agriculture Commissioner Mike Strain for comment, but did not receive a response by deadline.

Copyright 2010 KPLC. All rights reserved.

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