Editor’s note: This commentary is by Tim Loucks, a consultant to private equity companies seeking to restructure their business holdings. He moved to Vermont in 2002 to join Husky Injection Molding Systems in Milton, where he led the Milton operation from 2004-2006, and subsequently led Husky’s Global Tooling Operations from 2007-2011. He lives in Charlotte.
[I]t’s not uncommon for appointed and elected officials to trip over one another as they rush to cut ribbons and turn shovels on large, new job creation projects. Who doesn’t like new jobs? Why then on May 14 when AnC Bio broke ground in Newport for their new biotech facility funded under the auspices of the EB-5 program was Guy Rouelle the only state official present? Guy who? (In case you didn’t know, Mr. Rouelle is the Aviation Program administrator for the Vermont Department of Transportation.) No Sen. Leahy. No Sen. Sanders. No Congressman Welch. No Gov. Shumlin. Not a single person from the Agency of Commerce and Development. Just Guy.
It seems that the smart money views this project as Vermont’s version of Solyndra in the making, and is doing everything possible to avoid the finger pointing that will come when the plant closes its doors – if the doors open in the first place.
In a state where new high-tech jobs are so hard to come by, it seems a bit strange that no elected or appointed officials with the exception of the Newport mayor would take part in the glad handing for a project that Bill Stenger claims will create hundreds of new high tech jobs. (Does anyone remember Sen. Leahy standing shoulder to shoulder with Mr. Stenger on July 7, 2010, at the groundbreaking ceremony for the Jay Peak base village project? It’s on YouTube if you missed it.) What’s going on here?
It seems that the smart money views this project as Vermont’s version of Solyndra in the making, and is doing everything possible to avoid the finger pointing that will come when the plant closes its doors – if the doors open in the first place.
Remember when this project included two plants? Menck Windows and AnC Bio leasing a factory from Menck? Sadly, Menck fell through in September 2013 – ultimately launching in Chicopee, Massachusetts, without the benefit of EB-5 funding. Menck seemed to be a glove fit for the area — a company producing energy efficient windows leveraging a skilled workforce with experience in furniture making. Sadly, the level of automation Menck intended to invest in reduced the number of jobs the plant would have created, and the project was canceled. What about AnC Bio? What are the leverage points for biomedical research and high tech manufacturing that AnC Bio plans to leverage in Newport?
With no disrespect to the residents of Newport – there are no logical reasons to build a biomedical research facility or high tech manufacturing plant in Newport. The fact that the money for this project is being spent as fast as it came in should be a flashing warning light to everyone. Mr. Quiros pockets a $3 million profit selling the land and building to AnC Bio? $10 million to secure distribution rights to a product that isn’t being manufactured? No products. No distribution. No support. Add that up and it equals no money. Building a factory is the least important component of becoming a viable entity in the incredibly competitive landscape of global biomedical research and manufacturing. Perhaps AnC Bio’s long-term vision is to create a “medical resort” in Newport – a Vermont version of the facility the company plans to build on Cheju Island for heart and kidney failure patients. You heard right. A medical resort. Check out the company’s website.
I wish I could avert my eyes, and convince myself that “it will all work out” but I don’t think that is the case. If there were a way to short the AnC Bio project, I’m certain I could make a killing. I urge the state to step in now to protect the investors and residents of Newport. With the exception of Mr. Stenger and Mr. Quiros, nobody’s interests will be well served if a white elephant is built in Newport and vacated within a matter of months.
