If nothing else, Robotic Built Structures Inc. has a case of bad timing.
The infant company, which would build prefabricated homes in a factory that doesn't yet exist, is asking Fresno to lend it $2 million at a time when the city is burdened by more than $20 million in sour investments.
That unpleasant history is why city leaders are treating this request with considerably more skepticism than they showed two years ago, when they co-signed a now-bad $15 million loan for the Fresno Metropolitan Museum.
They're taking a hard look at "RoBuilt's" proposed collateral. And they're not liking what they see: Equipment they might not be able to sell for more than a fraction of its cost. Accounts receivable that won't exist until the company starts selling its product.
The city appears likely to ask RoBuilt to put up cash or its equivalent as security. Which prompts a puzzled response from the company: If we could put up the cash, why would we need the loan?
"I don't know any project that could cash collateralize itself and not qualify for a conventional loan," said chief executive Daniel Lonergan.
In addition, Darius Assemi, whose company, Granville Homes, has been publicly identified as a major investor, said he's only thinking about it -- and isn't convinced the company's product will cost less than building homes the old-fashioned way.
On May 7, the City Council voted 5-1 to proceed with the paperwork needed for the city to borrow money from its future federal funding allotments and loan it to RoBuilt. But one member of the majority now says the proposal never should have reached the agenda.
"It's a start-up company without a proven track record," said Council Member Lee Brand, who wants the city to tighten its standards for financial help to outside ventures.
If its founders' plan ever comes to life, RoBuilt will turn out prefabricated apartment homes in a 150,000-square-foot factory in southeast Fresno's Fancher Creek business park. It will use a computer-driven technology patented by one of its founders.
It promises to create 170 "living wage" jobs, buttress the city's much-advertised boast about the advantages of its Central California location, generate taxes to bolster the city's shrinking treasury, and bring in development fees to help repay tens of millions of dollars in bonds for police and fire stations and new parks.
But if it fails, it will be one more financial mess in a city that can't afford any more of them.
That's a legacy that has dogged city leaders since the 1980s, when several public-private partnerships exploded. Now it afflicts Mayor Ashley Swearengin as she deals with the fallout of now-failed guarantees to the Granite Park Kids Foundation and the museum, plus $4 million in publicly funded improvements to Selland Arena for the Fresno Falcons hockey club, which promptly went under.
According to a business plan presented to the council, Lonergan and company President Stuart Borne are career businessmen with extensive experience in the modular home industry (in Lonergan's case) and real estate development (in Borne's case). Lonergan says he is from Texas. Borne recently worked in the Colorado Rockies. Both now claim Fresno as their residence.
Major investors include Fancher Creek developers Ed Kashian and Tom Richards, and two local building trade unions -- the International Brotherhood of Electrical Workers Local 100 and Plumbing, Pipe and Refrigeration Fitters Local 246. It's unclear how much each is investing.
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