December 31, 2013

Missouri Innovation Campus leaves Exergonics behind

The Lee’s Summit energy company has had trouble raising capital for the project, which aims to give students both work and academic experience as a inexpensive way to a college degree.

The energy company whose leader helped conceive the highly touted Missouri Innovation Campus has been dropped as a partner in the Lee’s Summit project.

That company is Exergonix, which has had trouble financing a factory and business park that was to be a key part of the campus — touted by President Barack Obama as a creative, cost-effective way for students to complete college while gaining experience in the workplace.

The campus had been planned on 80-plus acres where Pfizer once operated a plant near Missouri 291 South and U.S. 50. Now it appears likely to move to different spot with a new partner.

The Lee’s Summit School District and the University of Central Missouri have selected Townsend Capital as the developer it will work with for the potential campus, said Stan Elliott, the projects facilitator for the university.

Further details will reported once the university reaches a final agreement with Townsend, Elliott said. The company owns property along the north side of Chipman Road, east of the Summit Technology Campus, where the innovation program has already gotten its start.

“This is a disappointment for us, as we were the group that originated this idea and worked on it for months, but ... we have had challenges to finding an investment partner that can finance the buildings,” Exergonix President and CEO Don Nissanka said in an email.

The vision for the Missouri Innovation Campus is for students to start earning college credit while still in high school, while working at Exergonix and other businesses that locate on the campus. Students could complete their bachelor’s degrees at least two years earlier than normal.

The education partners include the Lee’s Summit School District, the University of Central Missouri and the Metropolitan Community Colleges.

Exergonix specializes in manufacturing electricity storage units for utilities. In addition to the elusive financing, it has shown no job growth in recent reports to the city.

Still, Nissanka is hopeful of turning things around in 2014, and said he intends to begin talks with Lee’s Summit officials to allow a broader range of industries to build on the site. The city’s development agreement with Exergonix restricts it to a list of “green” industries.

Nissanka said that startup green energy firms like Exergonix face a double-whammy.

The economy’s crash dried up investment money in general. And high-profile bankruptcies by Solyndra, which made solar panels, and Beacon Power, which produced flywheels, have further dampened enthusiasm for investments in green energy, Nissanka said last month.

“We have to evolve as the economic environment has changed,” he said.

Nissanka said he has hired a new broker, Colliers International, to work on finding other businesses to locate on the site. He said the property would be more marketable if the city is succeeds in improving the U.S. 50 and Missouri 291 South interchange.

He’s also been working on an acquisition/merger with a firm based outside the U.S. that works in renewable power generation, which would be complementary to Exergonix. He said that planned acquisition has encountered regulatory hurdles that also made financing difficult.

But Nissanka noted that the company was successful in getting capital from Show Me Angel Investors to launch production and marketing of its electricity storage units.

And said the company has produced more than 100 of the units in various sizes from a $1.5 million custom-built unit to smaller “off the shelf” applications costing $5,000 to $100,000. Those products are manufactured elsewhere.

He said he doesn’t let critics or skeptics discourage him.

“If I have failed, would President Obama come to University of Central Missouri to talk about an idea originated by a guy from Lee’s Summit?” Nissanka said.

President Barack Obama in July visited the university in Warrensburg to recognize the contributions to UMC by Nissanka and Worldwide Technologies CEO Dave Steward. Both are graduates.

In its 2011 agreement with the city, Exergonix has until Sept. 1, 2016, to invest $50 million at the site and create 150 jobs.

If the company falls short, the city can purchase the property for $100. The city has paid Exergonix slightly more than $1.4 million to allow the company to buy the land.

City Manager Steve Arbo said the city allowed the five-year window because of the challenge expected for raising funds and starting operation.

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