CalPlant I LLC is currently facing two unpaid construction work claims worth a combined $3.3 million. The payment dispute is centered around construction of the company’s new eco-MDF factory.
The company is building the world’s first rice straw-based medium density fiberboard (MDF) plant in the world, which is located roughly 85 miles north of Sacramento, CA along Interstate 5 in Willows, CA.
On September 15, 2020, CalPlant I LLC was approved by the California Pollution Control Financing Authority to sell $53 million in additional tax-exempt bonds after defaulting on debt payments.
An official construction report released by CalPlant I LLC on September 11, 2020 states that the plant is now expected to release its first eco-MDF product in November 2020. The facility is now expected to open for commercial operations in May 2021.
CalPlant also owes a general contractor and subcontractor millions for their work amid two mechanics lien claims that are currently active. A mechanics lien is an involuntary security interest placed on a property to prevent its sale or refinancing while active.
Each unpaid work claim was processed with the Glenn County clerk’s office according to California laws that govern mechanics lien filings.
Two Contractors Owed $3.3M at CalPlant
Two contractors claimed a combined $3,320,011.51 for their contributions to the CalPlant MDF facility, located at 6101 State HWY 162, Willows, CA.
General contractor BCM Construction Company has filed the largest known unpaid work claim to date against CalPlant I LLC, with a lien valued at $3,146,497.01.
BCM Construction Company’s mechanics lien was filed on August 31, 2020 and carries a 10% prejudgment interest rate as of December 1, 2019, marking the date in which the balance was due.
The GC is also involved in a mechanics lien claim with subcontractor Partition Specialties, Inc. on the CalPlant project.
On August 24, 2020, the subcontractor filed a mechanics lien against BCM Construction Company, arguing that they are still owed $173,514.50 from the GC.
According to Partition Specialties’ lien affidavit, the subcontractor furnished and installed access flooring materials pursuant to a contract with BCM Construction Company.
Post-Default, CA approves CalPlant Bid to Issue $53M in Tax-Exempt Bonds
CalPlant filed a Voluntary Disclosure on September 11, 2020 as part of its bid to raise $53 million through the issuance of tax-free bonds. So far this year, the company has failed to make payments on over $300 million in outstanding debt, according to Bloomberg.
The report also found that both Citigroup Global Markets Inc. and Stifel, Nicolaus & Company, Inc. have agreed to underwrite CalPlant’s debt with fixed-rate green bonds.
Fire Damage at CalPlant in August 2020
CalPlant reportedly suffered from a fire in August 2020, damaging fiberboard material located within the facility’s storage yard.
According to The Bond Buyer, insurance advisor Marsh USA, Inc. said in September of 2020 that it wasn’t “commercially feasible” for CalPlant to obtain property coverage for construction risks under the terms listed within CalPlant’s insurance policy, which was due to expire in August.