A cosmetics company that the city invested $1.8 million into in hopes of creating hundreds of jobs appears to be set for sale, with a price tag of around one-third the investment.
With little discussion, the Clovis City Commission on Thursday night approved the go-ahead on the sale of assets belonging to Beauty Health and Science Innovations, located in Pico Rivera, Calif., for not less than $600,000.
The city approved spending as much as $3 million in economic development money on BHSI, a merger of two cosmetics companies, with the final $1 million contingent on the company creating at least 300 jobs in Clovis for a 12-month period within its first three years in the city. In all, the city spent $1.8 million.
But the company ran into financial trouble last year, and defaulted on financial and job creation obligations to the city and other creditors.
The city holds a position as first lienholder on any assets owned by BHSI and would recoup any of the profits realized in either a private sale or an auction.
An auction would be a hindrance to the city, Richards said, because it would require commissions and rent payments until the auction is complete.
The cosmetics company is also in default with the California landlord, and the city is obligated to pay rent while equipment is stored there at the rate of $28,412.55 per month or $947.08 per day.