ENROLLED
2017 Regular Session
HOUSE RESOLUTION NO. 132
BY REPRESENTATIVE GLOVER
A RESOLUTION
To create and provide for a subcommittee of the House Committee on Commerce to further
examine certain matters relative to the Revitalizing Auto Communities
Environmental Response Trust's (hereinafter "RACER Trust") fulfillment of
fiduciary duties concerning the former General Motors Shreveport plant (hereinafter
"GM-Shreveport plant") and operations.
WHEREAS, R.S. 51:921 pertinently provides the following: "It is the policy of the
state of Louisiana, in furtherance of its responsibility to protect the health, public safety,
welfare, and future prosperity of the citizens of the state, to fully develop the human,
economic, and natural resources of the state through a well-informed and business-oriented
Department of Economic Development"; and
WHEREAS, in furtherance of the policy set forth, the Department of Economic
Development has a "continuing program of commercial and industrial planning, education,
cooperation and assistance between the State of Louisiana and foreign countries, the federal
government, other states and state, regional, parish and local public and private agencies and
individuals"; and
WHEREAS, the state has a compelling interest to ensure efficient, honest, and
accurate policy effecting the promotion and perpetuation of the aforementioned policy of this
state; and
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WHEREAS, the state also has an interest in creating policy that safeguards against
any actions serving to adversely impact or impede economic development in this state; and
WHEREAS, after the bankruptcy of General Motors, the United States Bankruptcy
Court created the RACER Trust and equipped it with approximately five hundred million
dollars and the appropriate fiduciary obligations and responsibilities to "clean up and
position for redevelopment the properties and other facilities owned by the former General
Motors Corporation", and such properties and facilities necessarily include the former
GM-Shreveport plant; and
WHEREAS, during February 2013, the RACER Trust and Elio Motors entered into
a Purchase and Sale Agreement whereby Elio Motors was expected to acquire from the
RACER Trust all of the property, both movable and immovable property, relative to the
former GM-Shreveport plant; however, Elio Motors purchased only the movable property
and as such, entered into a Security Agreement with the RACER Trust in the amount of
twenty-three million dollars to acquire the movable property; and
WHEREAS, Elio Motors granted the RACER Trust a security interest in its acquired
movable property and simultaneously borrowed approximately ten million dollars in capital
for start-up costs; and
WHEREAS, the RACER Trust agreed to subordinate its security interest to assist
Elio Motors in obtaining its additional capital; and
WHEREAS, circumstances changed regarding the sale of all of the former
GM-Shreveport plant to Elio Motors; instead, the immovable property of the plant was
purchased by the Caddo Parish Industrial Development Board; and
WHEREAS, at the request of the Caddo Parish Industrial Development Board, a
parent company known as Industrial Realty Group, owned by Mr. Stuart Lichter, first
purchased the immovable property of the former GM-Shreveport plant and immediately
resold this same property to the Caddo Parish Industrial Development Board; and
WHEREAS, the Caddo Parish Industrial Development Board then leased the
immovable property back to Industrial Realty Group; and
WHEREAS, as the lessee and property manager of the former GM-Shreveport plant,
Industrial Realty Group next subleased a portion of the plant to Elio Motors; and
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WHEREAS, Elio Motors assumed the plant as a sublessee during the latter part of
2013 and was expected to manufacture automobiles, stimulate economic growth, and create
approximately one thousand five hundred jobs by the end of 2015; and
WHEREAS, since 2013 and currently, Elio Motors is not engaged in automobile
manufacturing at the former GM-Shreveport plant, and as a result, related economic
development and stimulated growth in this state have not materialized as projected and
desired; and
WHEREAS, with the present and future state of the former GM-Shreveport plant
subject to the direction and actions of Industrial Realty Group and Elio Motors, the House
Committee on Commerce was interested to hear the testimony of certain stakeholders to
identify and expound upon the circumstances, challenges, and barriers surrounding
automobile manufacturing and the anticipated accompanying job growth; and
WHEREAS, pursuant to House Resolution No. 37 of the 2016 Second Extraordinary
Session, the House Committee on Commerce met in Shreveport, Louisiana, on October 26,
2016, to do all of the following:
(1) Study the state of the automotive manufacturing industry in the state of Louisiana
since the onset of the most recent worldwide economic turndown that began in 2008.
(2) Investigate and report on the activities of the RACER Trust in the state of
Louisiana.
(3) Tour and assess the current condition and circumstances of any Louisiana based
properties either currently or previously under the control and supervision of the RACER
Trust in the state of Louisiana.
(4) Take testimony from local, regional, and state officials and economic
development stakeholders regarding barriers and obstacles impacting the ability to
effectively market facilities either currently or previously under the control of the RACER
Trust; and
WHEREAS, though representatives were present to testify, the representatives were
not parties to nor directly privy to the process of negotiations between the RACER Trust,
Industrial Realty Group, the Department of Economic Development, the Caddo Parish
Commission, and the Caddo Parish Industrial Development Board; and
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WHEREAS, the RACER Trust's commitment of the former GM-Shreveport plant
to Industrial Realty Group and Elio Motors is a matter of vital concern regarding the
economic development in this state, not solely due to the lack of automobile manufacturing
on behalf of Elio Motors, but because prior to this divestment, the Department of Economic
Development and the North Louisiana Economic Partnership expressed concern regarding
the transaction; and
WHEREAS, Mr. Stuart Lichter, CEO of Industrial Realty Group, who ultimately
gained control of the former GM-Shreveport plant, defined and outlined the plant's worth
and value at an Elio Motors press conference on January 13, 2013; and
WHEREAS, despite the value of the assets encompassed within the former
GM-Shreveport plant, the RACER Trust is believed to have provided the Caddo Parish
Commission with only the following two options in consideration for the eventual fate of
the former GM-Shreveport plant:
(1) Committal of the former GM-Shreveport plant to Industrial Realty Group.
(2) Complete demolition of the plant; and
WHEREAS, it is a matter of state interest and concern that the prospect of the former
GM-Shreveport plant's demise may have actually been a false threat used as a catalyst to
urge the Caddo Parish Commission and other local and state economic development officials
to support and commit the former GM-Shreveport plant into the contractual care of
Industrial Realty Group and Elio Motors; and
WHEREAS, it is appropriate that the subcommittee examine any potential breach of
fiduciary duties or obligations which may have resulted in this state's lost opportunities for
substantial economic development; and
WHEREAS, the assets of the former GM-Shreveport plant possess great potential
to be a source of real opportunity for economic growth and job creation in Louisiana, but
although publicly owned, no provisions or mechanisms for local oversight are in place to
rectify this agreement made in furtherance of the state's economic development that has not
materialized to provide an economic benefit to this state; and
WHEREAS, in light of the dire circumstances surrounding the former
GM-Shreveport plant, the state is compelled to examine the process of negotiations which
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resulted in Industrial Realty Group's and Elio Motors' attainment of the former
GM-Shreveport plant, per the recommendation of the RACER Trust; and
WHEREAS, contingent upon the findings of the subcommittee, the Legislature of
Louisiana and the Department of Economic Development may be equipped with
indispensable, essential information for the creation of improved policy to better regulate
and safeguard with respect to negotiations expected to further the state's policy of protecting
the welfare and future prosperity of its citizens; and
WHEREAS, House Rule 14.51 pertinently states the following: "Each standing
committee...each joint committee...and any subcommittee of such standing or joint
committee is hereby specifically and expressly granted the power and authority to hold
hearings, subpoena witnesses, administer oaths, require the production of books and records,
and to do all other things necessary to accomplish the purposes of the study or investigation
assigned to it by the House or by the legislature or by a majority of the members of the
committee."
THEREFORE, BE IT RESOLVED that the House of Representatives of the
Legislature of Louisiana does hereby create a subcommittee of the House Committee on
Commerce to further investigate and examine certain matters relative to the RACER Trust's
fulfillment of fiduciary duties concerning the former GM-Shreveport plant and operations.
BE IT FURTHER RESOLVED that the chairman of the House Committee on
Commerce shall appoint the members of the subcommittee and designate the chairman and
vice chairman of the subcommittee.
BE IT FURTHER RESOLVED that the subcommittee shall be responsible for
examining all matters relating to the RACER Trust's fulfillment of fiduciary duties and any
related issues that the subcommittee deems appropriate and necessary to discharge its duties
and responsibilities.
BE IT FURTHER RESOLVED that the subcommittee shall conduct such
investigations as it finds necessary or appropriate to carry out its purposes; for the purposes
of conducting such studies, the subcommittee may call upon the staffs of any department,
agency, or official of the state for data and assistance; all such departments, agencies, and
officials shall cooperate with the subcommittee; and the subcommittee may request and
utilize the assistance of any and all public and private sources.
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BE IT FURTHER RESOLVED that the subcommittee shall make a report of its
findings and recommendations, including proposed legislation, to the House Committee on
Commerce no later than thirty days prior to the convening of the 2018 Regular Session.
BE IT FURTHER RESOLVED that the subcommittee shall be dissolved upon the
adjournment sine die of the 2018 Regular Session of the Legislature of Louisiana.
SPEAKER OF THE HOUSE OF REPRESENTATIVES
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