\u00a0(POSTED 4\/26\/07)<\/b><\/p>\n
The lease of 10 acres of state land to Venu Pasupuleti, an Ohio entrepreneur, moved forward last month when the board of directors of the Natural Energy Laboratory of Hawai`i Authority voted 6-3 to approve a set of stringent conditions to attach to the lease.<\/p>\n
NELHA administrator Ron Baird was instructed to work out final language of a lease with Pasupuleti that would include these conditions. The board then would vote on the final lease at a later meeting.<\/p>\n
Approval of the lease conditions came after the board raised a number of questions concerning Pasupuleti\u2019s past businesses and outstanding judgments against him and Megasoft-named businesses he had been involved with in Ohio.<\/p>\n
Yet several of the board members voting on the motion had been given no description of Pasupuleti\u2019s latest proposal. At the March board meeting, his operation was described as one that would eventually occupy 50 acres of land, employ 4,200 skilled workers, and use up to 50 megawatts of electricity.<\/p>\n
By the May 2 meeting, however, with questions having been raised over fitting an operation of that scope within the limits set by a 1985 environmental impact statement for the entire technology park, Pasupuleti\u2019s project had been considerably scaled back. Don Thomas, a board member and professor at the University of Hawai`i\u2019s School of Ocean and Earth Sciences and Technology, told other members that the \u201cinitial proposal of 4,000 employees is no longer on the table.\u201d<\/p>\n
Edward Young, board representative of the Hawai`i Strategic Development Corporation, noted that he was \u201cnot privileged to see the scaled-down proposal.\u201d<\/p>\n
Thomas then described it for Young and other board members \u2013 and the public, as well. The original plan called for a phased-in project that ultimately would employ around 4,000 people, Thomas said. \u201cPhase I had only 150 employees, and revenues were going to be in the range of several million dollars, not in the hundred-million dollar range. As part of this discussion, the grand plan seemed to be unreasonable with the rate of expansion and so forth. So the general intent was, we would approve only Phase I development with 150 employees and a much scaled-down parking area. Essentially it\u2019s 10 percent or less the size of the full build-out.\u201d<\/p>\n
Board member Robert Arrigoni asked Pasupuleti if there were any legal claims outstanding against him personally or other Megasoft companies with which Pasupuleti had been involved. (Several of those judgments are described in the May issue of Environment Hawai`i.)<\/p>\n
\u201cI\u2019ll have to talk to my attorney,\u201d Pasupuleti replied. \u201cI\u2019m not a legal expert\u2026 If there\u2019s a problem, we\u2019ll resolve it.\u201d<\/p>\n
Arrigoni: \u201cYou\u2019re not aware of these issues?\u201d<\/p>\n
Pasupuleti: I don\u2019t know the history\u2026 Everybody has some kind of blemish.\u201d<\/p>\n
Ted Liu, director of the Department of Business, Economic Development, and Tourism, asked<\/p>\n
Pasupuleti: \u201cThese judgments, you have no knowledge of?\u201d<\/p>\n
\u201cI don\u2019t want to comment on things I don\u2019t know,\u201d Pasupuleti said, adding: \u201cThey\u2019re working on these issues for some time.\u201d<\/p>\n
Bryan Yee, the deputy attorney general assigned to NELHA, asked Pasupuleti if his attorney would be able to appear before the board.<\/p>\n
\u201cI would like an Ohio attorney to address that,\u201d Pasupuleti replied.<\/p>\n
When asked if he had an attorney, Pasupuleti responded, \u201cWe\u2019re going to bring them on board.\u201d<\/p>\n
Young asked if the board should require a clearance on outstanding legal judgments as a lease condition.<\/p>\n
Yee, the deputy AG, advised that the board ask for a warranty on the absence of any unpaid judgments.<\/p>\n
No \u2018There\u2019 There<\/b><\/p>\n
One of the members of the audience was Brian Goldstein, chairman of the board of the state High Technology Development Corporation and a member of the executive board of the Hawai`i Angels investing group, which has invested more than $20 million in start-up enterprises in Hawai`i.<\/p>\n
The role of the executive board, he said, was to give a first-cut review to business plans from entrepreneurs seeking investors. \u201cIf a plan makes it through the first cut, the smell test, entrepreneurs may be invited in to make their presentation\u2026.<\/p>\n
Pasupuleti sent his plan to the Hawai`i Angels, Goldstein said. \u201cI just wanted to share with you the views of this fairly educated group of astute investors,\u201d he said. \u201cThis plan did not make it past the first cut.\u201d And that, he added, was a low threshold; \u201cthe kind of plan that doesn\u2019t make it past the first cut is, for example, a plan to cure cancer over the phone.\u201d<\/p>\n
\u201cThere is no \u2018there\u2019 there,\u201d he said of Pasupuleti\u2019s proposal. \u201cNELHA is the last place you\u2019re going to do this sort of data center\u2026. It makes no sense to do this business with the computing, energy, and people requirements they describe.\u201d<\/p>\n
\u201cI don\u2019t know what the expertise of this group is,\u201d he said, referring to the NELHA board. \u201cI just thought you ought to know the viewpoints of the Hawai`i investing community\u2026 When I see a plan that just raises huge red flags coming into a state facility, \u2026 I just wanted to share my views with you.\u201d<\/p>\n
Goldstein\u2019s expertise aside, the board then voted to approve a set of lease conditions and to instruct its administrator to prepare a final lease with Pasupuleti for future board approval. Among the conditions was one requiring an irrevocable letter of credit equal to 18 months rent (10 acres at $3,000 a month per acre for 18 months comes to $540,000) and another requiring Pasupuleti to warrant to the board that there are no outstanding judgments against him.<\/p>\n
Six members voted in favor; three \u2013 Tsuji, Arrigoni, and Pat Cooper, representing the University of Hawai`i president \u2013 opposed.<\/p>\n
The NELHA board is tentatively scheduled to meet again on May 29.<\/p>\n
Patricia Tummons<\/i><\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
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