Like most taxpayers, I was appalled at the news about the demise of Solyndra. That's the company that the Obama Administration provided with $535 million in loan guarantees only to see the commercial energy firm go bankrupt. Recently, I overheard a conversation about this topic spill over to a local story that made me speak up and set the record straight.
The City of Eau Claire provided Supercomputer Systems Inc. (SSI) with loans and tax credits in the mid-1990s, but was able to recapture its investment and benefited from spin-off companies after SSI wasn't able to make a go of it. Unlike other small business loans that have gone bad, the SSI loan package actually turned out pretty good for the Chippewa Valley.
For example, the company that is now 3M in Eau Claire was previously W.L. Gore, which was an offshoot of SSI. Silicon Logic Engineering (SLE), which was purchased a few years ago by a company on the west coast, was a SSI spin-off, as were a few other small firms that located in Banbury Place once the supercomputer firm became defunct.
As much as the public would believe that the SSI loans set a bad precedent, the real story is that Eau Claire and the Chippewa Valley got put on the map in the high-tech world because it was able to lure SSI to the region. In fact, the name recognition for the Chippewa Valley has been a great recruiting tool as economic development officials laid the foundation to attract other companies to the area.
Any time a municipality or public/private entity is in the business of loaning money to a new company, there is inherent risk. It's the reason why financial institutions have loan-loss reserves. But, unlike other loans made by banks and credit unions, deals struck by taxpayer-supported entities are under more scrutiny - and rightly so.
Fortunately, municipalities are putting added requirements on the borrower to make sure that there is a better chance to recoup their investment. Although there is still risk in any deal to assist a start-up company, cities and villages are covering their backs to make sure that taxpayer dollars aren't being wasted.
So don't let anyone say that the City of Eau Claire wasted money nearly 20 years ago on SSI. It's simply not the truth. Now, the Solyndra situation - that was a waste of taxpayer money that we will never get back.
THERE WILL BE NO ISSUE OF THE BOTTOM LINE NEXT WEEK - MAR. 2nd, 2012. ROPA PUBLISING CO. WILL BE ON VACATION.