Port takes stock in juice firm to cover back rent

The Port of Whitman County is now part-owner of flavored juice company Ecowell.

Port commissioners accepted a settlement offer from Ecowell at their regular meeting last Thursday for unpaid rent that included shares of stock in its parent company.

“You might in 10 years get some money out of it. They might turn out to be Apple,” Port Attorney Bruce Ensley told commissioners. “I wouldn’t bet on it, “ he advised.

Formed in 2009 by WSU students Brian Boler, Reid Schilperoort and Andy Whitaker, Ecowell makes kiosks that dispenses custom-flavored drinks into bottles supplied by the drinker.

Ecowell owes the port $6,700 for unpaid rent for the company’s former space in the port’s Henley Court building in the Pullman Industrial Park.

It departed the port’s building last year when the company moved to the San Francisco Bay area after being bought up by venture capitalists.

Ensley brought commissioners a settlement offer from Ecowell last Thursday. That offer includes $4,700 in cash for the back rent, with the port taking stock in the company formed after the venture capitalists took over to cover the remaining balance.

“It’s probably a security the port really isn’t authorized to hold,” Ensley advised.

Nevertheless, Ensley said the stock settlement would be better than the alternative. The port likley would have to eventually sue for the total sum owed and may not even then recover Ecowell’s debt.

“How do we explain this to the (state) auditor?” asked Port Commissioner John Love.

Ensley said since the port is essentially trading debt for stock, and not investing cash in the company, regulators would check it off as a “no harm-no foul” situation.

Taking the stock, he said, would essentially be equivalent to writing off the remaining debt and hoping to get something down the road.

The students spun the idea for the business out of classwork done for Don Tilton, a local engineer and part-time WSU instructor.

After winning start-up funding from the WSU business plan contest, the firm set up shop in part of the port’s Henley building.

At one point, Ecowell had 10 vending machines placed in schools, offices and gyms in Pullman, Spokane and Reno. Those machines moved to the Bay with the company last June.

The port in 2005 and 2007 built the 39,490-square-foot building for Isothermal Systems Research. Tilton was also CEO of the ISR firm, which shut down its Pullman operations when it lost a government contract in 2008. ISR was dissolved and merged in SprayCool, a firm founded by Tilton in the 1980s.

Ecowell rented a 1,000-square-foot space in the building on a month-to-month basis, said Joe Poire, executive director of the port.

Members of the company mowed the lawn as part of a reduced rent agreement. Poire noted the port continued to market the space for rent while it was occupied by Ecowell, and there was no demand.

“We kicked them out and we got a tenant for their space,” said Poire.

The Henley Court building is now occupied by several firms, including the Palouse Conservation District, Merry Cellars Winery, Digilent, Inc., the Southeast Washington Economic Development Alliance and the Green IT Alliance.

The last firm, the Green IT Alliance, or GITA, is another company founded by Tilton which uses the building to study energy efficient architecture methods for data centers.

That company helped the port receive Innovation Partnership Zone status for the building and the Pullman Industrial Park through the state’s department of commerce.

The zone status came with a $1 million grant for research and to expand space for companies to set up in the zone. One-third of the grant was used to purchase ground for a new industrial park north of the current industrial park at the corner of SR 27 and the Pullman-Albion Road.

Another $100,000 was slated to pay Tilton to administer the zone’s progress under the GITA lead.

The port used a series of state and local funding to build the Henley Court building for ISR. County commissioners gave the port a $400,000 grant and a $200,000 loan from the county’s .08 economic development fund pool, and the state added a $400,000 grant for the expansion.

The port still owes $555,000 to the state for construction loans and is still paying on nearly $1.4 million in bonds it issued for construction. The bond is scheduled to be paid off in 2025.

The building is listed for sale online by NAI Black for $5.5 million.