BATON ROUGE, La. (AP) -- State Agriculture and Forestry Commissioner Mike Strain says he plans to foreclose on a company buying a state-backed cane syrup mill near Lake Charles.

The Advocate reports ( ) Lake Charles LLC is late on a $2.9 million mortgage payment to the state and defaulted Thursday on a separate bank loan. Louisiana Green Fuels, which was founded by brothers from Colombia, is the majority owner of Lake Charles LLC.

"If they don't pay us, then of course they will be evicted," Strain said.

For state government, millions of dollars are at stake. The state built the mill and still owes $16.2 million in construction costs. The state also guaranteed $6.3 million in bank loans designed to make the mill a success.

The Lacassine mill is a hallmark of longtime state Agriculture Commissioner Bob Odom's administration. Odom used state dollars and state workers to build the facility in Jefferson Davis Parish. Concern started to set in by the time Odom proposed a similar facility for the Bunkie area. State officials rejected the Bunkie project after questioning whether it would be a financial success.

Strain called the Lacassine mill a boondoggle when he ran against Odom in 2007. The election ended Odom's decades-long tenure at the state Department of Agriculture and Forestry.

Five years later, the idea of using cane, rather than corn, to create a profit-generating ethanol industry still is an unproven experiment in the United States.

Alejandro "Alex" Santacoloma and his brother, Luis, relocated from their native Colombia to Lake Charles with plans to make the venture a success. They entered into an agreement to buy the mill from the state and borrowed money from banks to purchase the parts for an ethanol plant.

The mill did process sugarcane into syrup but soon fell idle when it became clear that enough sugarcane wasn't being brought in to justify the expense of operating the mill.

The parts to make the ethanol plant still are in pieces on the site.

Strain said he will ask the Louisiana Agricultural Finance Authority, called LAFA, next week to make the $127,500 installment owed on one of the bank loans to prevent the mill from being seized.

LAFA is a state entity that generates revenue through leases on buildings. As commissioner, Strain chairs LAFA.

Lake Charles LLC owes $70.6 million on the mortgage with the state as well as $6.3 million in bank loans.

Strain said he will try to sell or lease the mill to generate enough dollars to finish paying the construction costs and clear the bank loans.

He said a company with firmer financial standing could make the mill a success.

"We've had a number of interest in it," Strain said.

He said he also will seek what is known as a deficiency judgment against Lake Charles LLC for any deficit not erased by a sale or a lease.

Strain said he tried to work with Lake Charles LLC to at least get the bank loan up to date.

"They basically said this morning they couldn't pay it," he said.


Information from: The Advocate,

Copyright 2012 The Associated Press.

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