Lawsuit: Landowner jeopardizing Las Vegas solar plant

More than $45 million in financing and some 250 construction jobs for a solar plant planned near Las Vegas are in jeopardy because of delays in buying land for the plant, a lawsuit filed Friday says.

Fotowatio Renewable Ventures (FRV) of Madrid, Spain, says it has contracted with NV Energy to sell the utility 25 megawatts of electricity from Fotowatio’s planned Apex plant 25 miles northeast of Las Vegas. The plant would generate enough electricity to serve 5,000 homes. The lawsuit does not involve a second nearby Fotowatio project called Spectrum Solar.

On Friday, Fotowatio filed suit in Clark County District Court in Las Vegas against Kapex LLC and several of its owners and related companies, charging they have failed to honor an agreement to sell the 154 acres needed for the Apex plant to Fotowatio for $4.446 million.

Fotowatio said in the lawsuit the U.S. Energy Department has conditionally approved a $45.6 million loan guarantee for the project under a program in which John Hancock Financial Services Inc. is the lender.

The loan guarantee program has limited funds, is extremely competitive and supports only renewable energy projects that are the most assured of commencing construction no later than Sept. 30, the lawsuit said.

Fotowatio said in the lawsuit it will not be able to meet the loan guarantee requirements "unless it has fee simple title ownership of the solar farm site in the immediate future.’’

The suit says Kapex has failed to honor a 2009 sales agreement for the land because of complications arising from Kapex being in foreclosure proceedings after defaulting on loans totaling $64.7 million for its 3,000-acre Mountain View Industrial Park.

These loans were made by, among others, the now-failed First National Bank of Nevada as well as the now-bankrupt Integrated Financial Associates Inc., the lawsuit says.

It charges Kapex and certain investors are aware of the impending loan guarantee deadline and some of the investors are "using that knowledge in a wrongful and tortious manner to attempt to minimize their personal exposure under the guarantees they signed’’ on some of the defaulted debt.

Attorneys for Fotowatio with the Las Vegas law firm Kemp, Jones & Coulthard LLP say in the lawsuit that Fotowatio was aware the land it hopes to buy was subject to foreclosure proceedings

"All parties represented that they were fully supportive of the sale of the solar farm site to Fotowatio, as this would help repay the senior loan at a time when sales in the industrial park are much needed,’’ the lawsuit says. "Fotowatio was also advised that foreclosure on the entire Mountain View Industrial Park would not occur until after Fotowatio’s scheduled closing date.’’

The suit accuses Kapex of breach of contract and seeks an injunction requiring Kapex to sell the land under the 2009 sales agreement.

Unless it quickly acquires the land, Fotowatio faces "irreparable injury of losing the unique solar farm site needed for the development of its renewable energy project,’’ the suit says.

A request for comment was placed Monday with Kapex.

This isn’t the only pending issue involving a Fotowatio plant.

Last month, the state Public Utilities Commission refused to approve NV Energy’s power-purchase contract with Fotowatio for the Spectrum Solar plant, and two unrelated contracts, saying the utility didn’t provide enough information about how these deals would affect consumers.

NV Energy’s Nevada Power Co. unit this month asked regulators to give it another chance to justify the contracts.

The power-purchase agreement for the planned Apex plant has been approved by the PUC, Fotowatio said Monday.

Business

CORRECTION: An earlier version of this story incorrectly said the lawsuit related to Fotowatio's nearby Spectrum Solar plant, which will provide 37.5 megawatts of electricity to NV Energy, enough to serve more than 7,000 homes. | (August 22, 2011)

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