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Saturday, February 2, 2008

Tire Plant May Hit Skids

By Andrew Webb
Copyright © 2008 Albuquerque Journal; Journal Staff Writer
    Gallup Mayor Harry Mendoza says Gov. Bill Richardson yanked $2.9 million in state funding for a first-of-its-kind tire recycling plant in retaliation for the city's about-face on a plan to transfer nearby Red Rock Park to the state.
    Meanwhile, officials with Petra Group now say a decision on where to build the plant is "under review"— although questions have been raised about the project's viability.
    Petra's subsidiary, Green Rubber Global, announced plans in July to build the $30 million plant in Gallup with financial backing from actor Mel Gibson.
    The Malaysian company also hired Richardson's former Economic Development Cabinet Secretary Rick Homans to lead its U.S. expansion— but his status with Green Rubber is now unclear.
    Green Rubber Global claims to have invented the world's first commercially viable, waste-free method for recycling rubber tires— a chemical process that breaks up the long-chain molecules found in rubber that has been "vulcanized," or strengthened.
    Homans, Gibson and Petra Group founder and President Vinod Sekhar held a news conference to announce the Gallup plant, which was to have employed up to 150.
    The state was to pitch in about $3 million, and the City of Gallup and McKinley County were to contribute $1 million toward building the plant. It was to be owned by the city and leased to Green Rubber.
    Mendoza, a Democrat who took office in March 2007, said he met with Richardson to discuss Red Rock Park on Jan. 25.
    The state and the city, under a previous mayor, had been negotiating for about two years to transfer ownership of the park to the state.
    The city would have continued operating the park under the most recent version of the proposal.
    Mendoza said he changed his mind after it appeared the arrangement would have cost Gallup more than it now pays to run the park and would have left the city responsible for upgrades to bring the park to compliance with the Americans with Disabilities Act.
    "It wasn't in the best interests of the city," he said.
    Mendoza said Richardson told him on Friday that Gallup wouldn't get the state's share of the Green Rubber incentives because of its decision on the park.
    "We were just waiting for the funding to proceed with the plant," Mendoza said. "I'm disappointed. The governor made a promise to get that money for economic development, then he welched on his promise."
    Richardson spokesman Allan Oliver said by e-mail that he wouldn't comment on Richardson's private meetings.
    "But I will say that the Governor has been a longtime supporter of Red Rock Park and is disappointed that the City of Gallup reneged on over two years of negotiation aimed at saving that park," Oliver wrote.
    "The governor has also been a strong supporter of rural economic development across New Mexico— including the Green Rubber plant— and is concerned that several important economic development initiatives have not yet been funded by the Legislature."
    Despite the park issue, Green Rubber Global might not have built the plant in Gallup anyway.
    In September, Homans told reporters the project might be scaled back to a smaller facility employing closer to 20 employees.
    At the time, he cited concerns within the tire recycling community about whether Green Rubber's technology would work. There was also a question about the availability in Gallup of millions of used tires needed to make such a plant profitable.
    Andrew Murray Watson, a spokesman for the company, said Friday the company hadn't finalized its decision on a location for its first U.S. plant.
    "Green Rubber is reviewing its decision to place its first U.S. plant in New Mexico," he said, declining to elaborate.
    Homans, reached by telephone Friday, declined comment on whether he was still employed by Green Rubber, or whether its plans for Gallup were still in place.
    Green Rubber still lists him as deputy CEO on its Web site, www.greenrubberworldwide.com.
    Red Rock Park's massive red cliffs hold multiple archaeological sites and have played host to decades of Navajo ceremonies, balloon festivals and other events.
    Ownership of the park has passed back and forth between the city and state over the decades.