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Calif. Border Town Loses ‘Thousands’ Of Jobs After Solar Firm Files For Bankruptcy

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BLYTHE (CBS) — For the second time in as many years, a California solar energy firm has gone bust on a federal loan.

Oakland-based Solar Trust of America filed for Chapter 11 bankruptcy after the firm failed to meet a deadline for a $2.1 billion U.S. Department of Energy loan on April 1.

Solar Trust broke ground in December on what was initially billed as the world’s largest solar power plant near the town of Blythe about 50 miles east of Joshua Tree National Park.

The firm listed assets of $10 million and liabilities of upwards of $50 million in the U.S. Bankruptcy Court filing in Delaware.

City Manager David Lane told the KNX Business Hour there had been rumors of bankruptcy swirling for some time.

“I believe Solar Millennium is the parent company, and they had the first problem back in December,” said Lane. “In the interim they tried to sell the project back to another company called solarhybrid, and that didn’t pan out.”

While Solar Trust was ultimately forced to file for bankruptcy, the filing is not considered a default after the firm lost federal guarantees for the loan when the project was delayed last summer.

But default or not, Lane expected Solar Trust’s bankruptcy will have an economic impact on Blythe.

“The biggest loss to us immediately will be the loss of sales tax and hotel/motel bed tax, because since we’re the only city for 100 miles around, we figured anybody working on the site is going to be spending their money here in Blythe,” he said.

Lane estimated a “rolling figure” of “thousands of four-to-five-year jobs” will be lost in the wake of the bankruptcy filing, but he said he expects at least one of some 40 companies to step in and build the 1,000-megawatt solar farms.

“We think the big fish are eventually going to eat the smaller fish and when it’s all said and done, there’s going to be 7, 8, a dozen companies that will build these plants between here and Coachella Valley,” said Lane.

The filing comes amid the ongoing controversy surrounding Solyndra, a solar firm that received a $535 million federal loan and from the Obama administration before declaring bankruptcy last year.

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