Company owes grant funds for not living up to promised jobs [Danville Register & Bee, Va.]
(Danville Register & Bee (VA) Via Acquire Media NewsEdge) Aug. 24--When Ecomnets founder Raj Kosuri purchased a building in Airside Industrial Park in 2010, he had a plan to use it for manufacturing Verdio "green" desktop computers and products, and to also provide data storage services for small businesses.
Last year the company changed its plans, eliminating the manufacturing element and focusing on secure data storage.
The company's operations manager, Phillip Wright, said the market for desktop computers had changed.
"People are moving away from desktop [computers] to smaller and smaller notebooks and pads," Wright explained to the Danville Development Council in July 2012. "The timing just wasn't right."
Kosuri said at the time the change in focus would mean more capital investment and fewer jobs. H said he realized that change would likely affect the status of agreements the company had with the Tobacco Commission and the Danville Regional Foundation -- but also announced the company was purchasing adjacent property for future expansion.
The foundation gave the company a $90,000 grant, based on it creating 160 jobs with an average salary of $25 per hour.
So far, the company has five employees and plans to hire another 15 by the end of 2013.
In an April 2012 letter to Jeremy Stratton, Danville's economic development director, Kosuri said the average pay for these jobs would be $17 per hour.
Ecomnets has been paying the DRF back the entire $90,000 grant in monthly payments made since July 2012. The final payment is due next month.
The Tobacco Commission gave the company $500,000 based on the same job-creation numbers and total capital investment of $2 million. Stratton said while the company has not met job creation goals, it has exceeded capital investment goals.
On Thursday, Stratton said the Tobacco Commission had determined that Ecomnets needed to repay $248,750 of the $500,000 grant -- but has given the company three years to repay it.
The company will need to pay the Tobacco Commission $48,750 by the end of this year; a second payment of $75,000 by the end of 2014 and the balance -- $125,000 -- by the end of 2015.
Stratton also said there could be some adjustments to the final payment, based on the number of jobs created by that time. The company has said it now projects it will have 80 employees by the end of 2015.
The company also has a grant through the Industrial Development Authority that gave it $25,000 in 2010 when it purchased and located in a permanent facility. Four succeeding years' payments of $25,000 would only be released if job creation goals were met. So far, those goals have not been met and the money has not been issued, Stratton said.
The city also offered the company up to $61,500 in Local Enterprise Zone Job Grant funds. Stratton said that grant has not been made because the job creation figures have not been met.
Thibodeau reports for the Danville Register & Bee.
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