Ag commissioner chasing debts on failed projects

Advocate staff file photo by BRYAN TUCK -- The sugar mill in Lacassine.
Advocate staff file photo by BRYAN TUCK -- The sugar mill in Lacassine.

Odom leaves state legacy of failed projects

The mill, which is near Lacassine in Acadiana’s Jefferson Davis Parish, was a $72 million state-funded venture that failed in a spectacular way.

The project was a hallmark of longtime state Agriculture and Forestry Commissioner Bob Odom’s administration.

Odom vowed the facility eventually would evolve into an ethanol plant. Instead, the mill ground cane for 90 days and shuddered to a stop during a faltering economy.

Another of Odom’s pet projects — a failed cypress mill in Tangipahoa Parish — recently was sold for parts and will become a hurricane staging area for the Louisiana National Guard.

“It is going to be put into a beneficial use for the citizens of the state,” state Agriculture and Forestry Commissioner Mike Strain said.

Strain inherited both projects when he succeeded Odom in 2008. He also inherited a lot of debt.

Lacassine

The Legislative Auditor’s Office estimates the state spent $72 million over 14 years to help a group of roughly 30 southwest Louisiana sugarcane farmers. The assistance included the construction of the Lacassine mill that Odom built with the labor of everyday state employees, many of whom had no construction experience and worked jobs that did not include building trades.

Odom told state officials in 2006 that singer Willie Nelson’s alternative fuel company was interested in the facility. Nelson failed to materialize.

Eventually, the state agreed to sell the mill to Lake Charles Cane LLC for $60 million with no upfront cash. Odom signed a loan guaranty with a bank a day later to help make the fledgling venture a success.

To buy the mill, Lake Charles Cane LLC needed to make four installment payments of $100,000 each and then start paying on the principal and interest.

Louisiana Green Fuels Group — headed by the Santacoloma family of Colombia — owned the bulk of Lake Charles Cane LLC.

Louisiana Green Fuels fell roughly $3 million behind last year on state and bank payments. The company revealed it had a complicated debt load that exceeded $100 million. Most of its assets were cluttered with liens.

The company’s inability to pay left the state in a pickle because it borrowed money to build the mill and backed bank loans.

The state bought $7 million in outstanding debt tied to the mill last year and obtained a deficiency judgment for $73.4 million.

Peruvian company Gloria put down a $1.1 million nonrefundable deposit for the mill components. Once the full selling price of $7 million is made, the mill will be dismantled and shipped to Peru.

A Colombian company is paying the state $120,000 a month to store the ethanol parts that never got assembled into a plant. Once those leave the site, Strain says he will put the land up for lease.

Roseland

Strain also is putting the final touches on severing the agricultural department’s ties to a failed cypress mill in Roseland. The mill sits on a lonely stretch of road and sparked a three-year legal battle.

Texans Federal Credit Union sued the state after Louisiana State Cypress shut down the mill and stopped making payments on a $3.2 million loan that Odom backed.

The cypress mill closed not long after Wal-Mart stopped buying Louisiana cypress mulch.

Strain battled with Texans Federal over the bank loan and eventually agreed to pay $1.3 million to settle the litigation.

Months later, Strain has sold equipment, scrap iron and mill components from the site. His state agency retained $350,000 in equipment.

The 35-acre property will go the Louisiana National Guard, possibly in exchange for a piece of land at Camp Villere in Slidell.

Lt. Col. Michael Kazmierzak, a spokesman for the Guard, said the Roseland site will become a hurricane staging area for corralling and dispatching supplies such as water and meals during storms.

The Louisiana National Guard used the Lamar-Dixon Expo Center in Gonzales during Hurricane Isaac, but decided the area was too congested with traffic.

The cypress mill is near U.S. 51 in Tangipahoa Parish.

“Roseland is a remote area that gives us a lot less traffic, if you will, but access to the highway system,” Kazmierzak said.

What’s next?

Even with the sugar and cypress mills sold, Strain still has debts to chase.

He is trying to find assets to seize from Louisiana Green Fuels, which owes the state more than $70 million.

At one time, the public face of the company was Alejandro “Alex” Santacoloma, a Colombian businessman who, along with his brother, Luis, was an officer in Louisiana Green Fuels.

Both reportedly lived with their young families in Lake Charles.

Strain said only one Santacoloma family member remains in the U.S., and that person is farming land not included in Louisiana Green Fuels’ portfolio.

The commissioner said the seizable assets probably are very limited, but that he will do everything he can to locate some.

Strain said the state was left with millions of dollars in debt from the failed Lacassine mill. Full payment of the deficiency judgment would erase that debt.

State Sen. Dan “Blade” Morrish, R-Jennings, said the Santacoloma family tried to make the mill work but the facility never functioned correctly because it was not built by a licensed contractor.

At one point, the mill could only process 2,000 to 2,500 tons of sugar cane per day when it was supposed to be able to process 5,000 tons a day.

“At this point — I’m going to say it again — at this point, it’s good riddance,” Morrish said.