Seldon closure is a blow to economy, sources say

The Windsor community was shocked last week when Seldon Technologies — which had been a great local success story — suddenly shut down its operations, leaving more than 30 employees out of work.

Local and regional officials familiar with the company said the closure left a huge void in the local economy.

Seldon Technologies, started in 2002, created cutting-edge water filtration systems using nanotechnology. It recently signed a $20 million contract with a Mexican company to provide the water filtration technology to schools in that country. The deal was the Windsor firm’s first major commercial contract. At the time of the announcement in July, Seldon Technologies officials expected to grow from 37 employees to 60 employees by early next year.

Bob Flint, executive director of the Springfield Regional Development Corp., said the loss of these jobs is significant for the region.

“They’re good-paying jobs, sort of looking at the future of manufacturing, and to have it go away so abruptly is tough,” Flint said.

Tom Marsh, Windsor’s town manager, said other businesses will feel some impact as well. He said the company had out-of-town visitors stay in local bed-and-breakfasts and that employees used the local stores. Given that the company’s technology is proven to work, Marsh said, he hoped that another company would come along and revive the business. 

“Hopefully this is just the management team trying to catch a breath and set up some financing and get things moving in a positive direction,” Marsh said.

It was unclear how the closure would impact the $20 million contract Seldon Technologies announced in July with Mexican firm Bebederos Ecologicos. The contract was to provide water purification devices to schools in Mexico and, by making clean water more available in schools, was expected to help the country make progress on its battle against obesity. 

Sen. Patrick Leahy, a major supporter of the project, attended the announcement at the Seldon plant earlier this summer, along with state, regional and local officials. David Carle, Leahy’s spokesman, said last week’s news was a shock for the senator. 

“He was surprised by the announcement and by the fact that it also seemed to come unexpectedly for Seldon’s workers,” Carle said Thursday in an emailed statement. 

Flint said Seldon Technologies had financial issues stemming from its parent company, Econet, which is based in South Africa. Flint, who was involved in the discussions locally, said Econet was looking to secure bridge financing that would keep Seldon Technologies running through March. All indications were that the process was going well, Flint said. 

Less than a week before the Sept. 28 closure, “they assured us everything was a go,” he said. Flint added that about 20 percent of the financing package was from funds raised in the Windsor area.

Rep. Donna Sweaney, D-Windsor, also knew of the ongoing discussions about the much-needed financing. Sweaney found out Tuesday about the closure, after returning from a trip late Monday.

“I surprised that it just all fell through,” she said of the financing package.

Sweaney, who is in her 10th term as the town’s state representative, was there more than a decade ago when the company announced its opening, and she was also at the company’s announcement of the Mexico project this summer. 

“I’m sad to see this day,” Sweaney said. 

Marsh said Seldon officials asked for the town’s assistance several months ago, saying they needed $1 million to cover cash flow through March. He said the Select Board in early September authorized $175,000 in financing for Seldon out of the town’s revolving loan fund, which has been used for business development purposes in the past. The $175,000 for Seldon was contingent on the company presenting proof that it had lined up $825,000 in financing to complete the $1 million bridge financing package.

Marsh said Seldon had borrowed from the town’s revolving loan fund twice before, in amounts of $100,000 and $150,000, and had fully paid the town back both times.

However, Marsh said the town never received proof of the $825,000, so the $175,000 requested this time was never disbursed.

At the state level, Annie Noonan, commissioner of the Vermont Department of labor, said her department often assists displaced workers after a company shuts down. She said the state is in the early stages of responding to the Seldon Technologies situation.

“I suspect we have one of our regional offices working on that right now,” Noonan said Wednesday. 

Noonan said the department’s “rapid response” process includes assistance with unemployment benefit applications, job re-training and other needs. She said the department often reaches out to potential employers who could use the displaced workers’ skills. 

“What we’re saying is, ‘We’ve got workers who can match your needs,’” Noonan said. 

Sometimes, the Department of Labor sets up hiring events in response to these situations, but there were no such plans announced in Winsdor as of last week.

Another part of Seldon Technologies’ story involves the EB-5 program, a federally funded program which facilitates foreign investment in U.S. companies. The state Agency of Commerce & Community Development, or ACCD, runs Vermont’s EB-5 center.

Patricia Moulton, secretary of ACCD, said Seldon is using the program. She said the EB-5 program allows foreign investors to invest in U.S. companies that will, directly or indirectly, create at least 10 jobs. She said when those jobs stay in place for two or more years, the foreign investor can apply for a permanent work visa.

Moulton was unsure of the visa status of EB-5 investors involved with Seldon and could not divulge particular amounts of investment. However, she said an EB-5 investor has to invest at least $500,000 in the company. 

Seldon Technologies Chairman Jim Myers and another Seldon representative, Ron Massucco, didn’t immediately return phone messages left on Thursday. 

Econet officials did not respond to an email sent Tuesday.

http://www.timesargus.com/article/20151005/BUSINESS03/710059979/1006/BUSINESS

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