By Gabriel Monte: CNJ Staff Writer
The economic development arm of the city is pumping its brakes on recruiting businesses because of the tight lending market and focusing efforts on supporting existing ones.
Clovis Industrial Development Corp. Executive Director Chase Gentry said the meltdown on Wall Street has made it hard to secure financing to build manufacturing plants.
“Things have stalled because banks are not lending money,” he said. “(Lenders) don’t want to take a risk.”
Gentry said companies such as Cummins Natural Gas Engines, which has outgrown its facility, could be looking for a bigger place.
Company officials for the Ares-Blues Sun and American Renewable biodiesel plants earlier this year cited volatile market conditions following the sub-prime mortgage crash for delaying their projects.
Gibbs Energy President Joe Maceda said Monday the turbulent lending market has slowed financing of projects such as the $25 million, 20-acre biogas facility his company plans to build on city property.
Maceda said his company is still pursuing a Clovis facility, which would generate 90 jobs in its first phase and 250 jobs over the next five years, officials said. Maceda would not give a date on how soon the Clovis biogas project could start.
The turbulent financial environment has cleared the market of “get-rich-quick” investments, giving projects such as renewable energy facilities a better chance of securing funding, according to Maceda.
“(The market crash) sort of blew away a lot of the frivolity,” he said.
He said the type of investors in renewable energy markets have changed. Instead of investors looking to double their investments in a few years, he has noticed principal investors who want to save on energy costs.
“Energy is always a need. Major industrial customers want this stuff,” he said.