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 City on Tire Recycling: Show Us Cash

September 27, 2008 - GALLUP - The City Council wants guarantees that it won’t be jumping into the choppy waters of the rubber recycling business on its own.

Crumbing used tires into fine powder for reuse in mats and a limited list of other rubber products has been going on for decades. But no one has thus far managed to “devulcanize” that crumb, breaking it down even further into the raw rubber it came from, and make it pay.

The Malaysian-based Petra Group claims it has found a way, and has asked the city and county to pour $500,000 each into building the plant it needs to make it happen along Hasler Valley Road east of the food pantry. But before investing its share, the City Council wants to make sure Gov. Bill Richardson makes good on his pledge to add $2.9 million in state funds to the pot first. The council passed a resolution unanimously Tuesday making its contribution contingent on the county and — most important — the state appropriate their own shares.

Amid growing concerns about the ability of Petra, and its stateside subsidiary Green Rubber Global, to deliver, the move adds a caveat to the July 11 memorandum of understanding in which the council pledged the $500,000. After claiming the plant would bring more than 140 new jobs to the area, Green Rubber has cut its guarantee back to 20 or 30 the day the plant opens, tentatively scheduled for the end of 2008.

Rubber industry skeptics of Green Rubber’s claims have suggested that government officials wait for the company to find buyers for the rubber the plant will produce before investing. Gallup Mayor Harry Mendoza said the city will consider making that a condition of its $500,000 as well.

Green Rubber President Rick Homans said the company was working to line up manufacturers that could relocate here and put its rubber to use.

Worst case, Mendoza said, the city and county spends a combined $1 million building the plant, Green Rubber fails to move in, and “we end up with a big old building.”