Two companies are battling in court to take over Chicago's electric-vehicle charging stations, which are less than two-thirds complete amid a backlog of unpaid bills and a federal probe into payments to vendors.
JNS Holdings Corp. in Arlington Heights and Miami Beach-based Car Charging Group both claim in court documents to have agreements with 350Green to take over the Chicago project. California-based 350Green had been building Chicago's network of charging stations by tapping into $1.9 million in state and federal funds under a grant agreement with the city.
At stake beyond the charging stations are potentially lucrative business arrangements with national retailers such as Walgreen Co. and Simon Property Group, a mall operator, on whose property some stations are located.
Competition in the charging station industry is intense because companies that enter early enough to win over national retailers can also win primary market share across the U.S., said Rosanna Garcia, associate professor of innovation at the D'Amore-McKim School of Business at Northeastern University. The Chicago project had been used by 350Green to try to expand into 20 other markets.
"Although the charging stations themselves are quite expensive, the return on investment can be quite good if a company is the primary provider of units around a city or a country," said Garcia. Station owners, she said, are charging $1 to $5 for 15 minutes of charging when average electric costs amount to only 50 cents per hour to charge a car.
The Tribune reported earlier this month that work on Chicago's charging stations was halted after the Chicago Department of Transportation, which oversaw the grant agreement with 350Green, said it found "discrepancies in vendor payments" from 350Green.
Hundreds of pages of documents obtained by the Tribune under the Freedom of Information Act show that 350Green submitted copies of checks to the city to receive state and federal grant money, checks that some contractors told the Tribune they hadn't received. Several said they were contacted by the FBI.
One of the most curious checks, for $1.9 million, was written to an entity called Actium Power, which on its invoice said it was the "exclusive North American dealer" for Efacec USA, maker of fast-charging stations. An Efacec executive told the Tribune that Efacec has no exclusive dealers, has had no dealings with Actium Power and that the prices listed on paperwork provided to the city by 350Green were about double what Efacec charges.
Tim Mason, 350Green's president and co-founder, has said the issues cited by the city were "clerical errors."
The status of the investigation isn't clear; an FBI spokeswoman declined to comment.
The Chicago Department of Transportation had no immediate comment Friday on the lawsuits. The two companies need to resolve the litigation quickly if either one of them hopes to collect the remaining grant money because Chicago's grant agreement expires at the end of this year.
According to its original proposal, 350Green envisioned that by now its charging stations would be serving 12,000 electric vehicles in the Chicago metro area, each paying $50 to $70 per month for charging.
Instead, there are only 441 electric vehicles in the Chicago metro area, according to research firm Edmunds.com. Moreover, some electric vehicle owners have not embraced public charging stations.
For example, Martin Howard, who lives in Mount Prospect, routinely drives 40 miles to work and back in his Nissan Leaf electric and said he has used a public charger only once in the 16 months he's owned the vehicle.
"I think most people who use or plan to use an electric car have access to a private garage where they can charge," Howard said. "I can't imagine anyone buying or leasing an electric car and planning to use public charging stations. I consider public charging an emergency situation."
Still, some people in the auto industry believe that once battery technology is improved, there will be a bright future for electric vehicles — and therefore the charging industry.
Car Charging Group and JNS Holdings, both thinly traded public firms, apparently believe there is a future in charging. Both claim 350Green signed deals to hand over Chicago's charging stations.
In a case filed April 10 in U.S. District Court in New York, Car Charging Group sued 350Green and JNS Holdings in an attempt to block the charging stations from moving over to Illinois-based JNS.
In the meantime, JNS said it signed a deal with 350Green to acquire the Chicago charging stations. In court documents, JNS said it signed a deal April 17 with 350Green to assume $1.6 million in liabilities stemming from unpaid contractor bills related to the stalled project. Car Charging Group said it too had a deal — signed in March — to take over the Chicago project and 350Green's assets in 19 other markets.
On Tuesday, Car Charging Group withdrew its complaint in New York, saying that it had settled the matter with 350Green out of court.
But left out of the settlements, according to court documents, was JNS Holdings. Last week it said it had been meeting with Chicago Department of Transportation officials to negotiate the takeover of 350Green's severed $1.9 million grant agreement after successfully negotiating a deal with 350Green.
On Thursday, Car Charging Group filed a complaint in U.S. District Court in the Northern District of Illinois against JNS Holdings saying that under the terms of a settlement it forged with 350Green two days earlier it now owns "all of the interests of 350 Green," including the Chicago charging stations.
Any agreement 350Green signed with JNS should be declared null and void, Car Charging Group said in court documents.
As an electrical contractor, JNS installed 41 percent of the 168 chargers built so far and is owed about $160,000 by 350Green, according to court documents.
New York Attorney Randall Newman, who represented JNS in the New York suit, called Car Charging Group's complaints "frivolous" and said JNS will fight to hold on to the Chicago project.
JNS has agreed to pay contractors half of what is owed and to finish the project, which is a year and half late in being completed and 106 charging stations short of its obligations under Chicago's grant agreement.
Car Charging Group has not indicated what it would offer contractors and did not return calls. JNS' agreement is contingent upon the city's approving the transfer of the grant agreement it originally forged with 350Green in late 2010.
. We are sorry for the delay in our response! We have been attempting to gather more information about the status of the station before updating it in the Station Locator database.
