A state senate investigation has been launched into two high-profile economic development projects that have fallen flat. Senate governmental accountability committee chairman Jim Lembke expects his committee to follow an extensive paper trail on the projects, Mamtek in Moberly and Wi-Fi Sensors in Kirksville.
Wi-Fi Sensors got a one-million dollar Community Development Block Grant loan in July, 2009 with a promise to hire 40 to 100 people. It has yet to make any payments on the loan and nobody answers the phone. The Department of Economic Development referred the debt to the Attorney General for collection last April.
Mamtek had promised 600 jobs in Moberly. But Mamtek has missed its first bond payment and has laid off the 15 employees it did have. The company has turned over its assets to a company that recovers funds for creditors. The city has issued $39-million in bonds. Project organizers say they need millions more. The Securities and Exchange Commission and the Missouri Attorney General are investigating.
Lembke says he doesn’t want the investigation to drag on. But he says it will take as long as it takes to determine what has gone wrong and whether the state has adequate safeguards to protect state or local investors.
Columbia Senator Kurt Schaefer, whose district includes Moberly, says he has been told by a municipal bond expert that the Mamtek/Moberly situation is increasing interest costs for other governmental units.
Lembke says the committee does not want to stop a project that can be saved or keep the state from meeting commitments to projects.
Senator Joseph Keaveny has urged the committee to work as rapidly as possible. He says he is concerned about the committee’s work having a chilling effect” on state efforts to attract other economic development projects.