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Li-Cycle sues construction manager over funding failures amid eviction fight

The shell of an  unfinished building sits behind a sign announcing Li-Cycle's Rochester hub facility on Tuesday, Nov. 13, 2023, at Eastman Business Park in Greece. Company officials halted construction on the lithium-ion battery recycling project on Oct. 23, citing significant cost increases.
Max Schulte
/
WXXI News
The shell of an unfinished building sits behind a sign announcing Li-Cycle's Rochester hub facility on Tuesday, Nov. 13, 2023, at Eastman Business Park in Greece. Company officials halted construction on the lithium-ion battery recycling project on Oct. 23, citing significant cost increases.

Battery recycler Li-Cycle is suing its landlord and construction manager, hoping to block eviction from its hub facility warehouse in Greece.

The lawsuit provides new insight into circumstances surrounding the Toronto-based firm's decision last fall to abruptly halt construction on its multimillion-dollar manufacturing operation at Eastman Business Park.

Li-Cycle has been a promising venture on the region’s economic development stage, promising sizable investment and jobs. It is — or was — in line for a $375 million federal energy loan. Then came the announcement of the halt in construction, blamed on escalating construction costs, that sent dozens of workers home without warning and caught government officials by surprise.

In the lawsuit, Li-Cycle points the finger at Pike Conductor DEV 1, LLC, claiming the partnership of area contractors is the one that defaulted on their agreement.

They claim Pike was supposed to finance the majority of the warehouse construction but failed to obtain financing. Li-Cycle alleges that left them to front the entire cost of the project.

In a half-hour interview with WXXI News, Kochhar answered an array of questions and laughed off suggestions the company was headed toward bankruptcy.

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The lawsuit lays out a timeline of events showing multiple deadline extensions for Pike to obtain the necessary loans. The last deadline was Nov. 1.

Pike alleges that when Li-Cycle paused construction eight days prior, on Oct. 23, it made it impossible for the contractor to close on the financing, records show. Pike argues that, by law, Li-Cycle cannot now benefit from a failure that resulted from their own actions.

Li-Cycle claims it is owed at least $39 million or should be given ownership of the warehouse so it can obtain a mortgage.

In the meantime, the project’s sales tax exemption has expired, and the county could seek to recapture benefits claimed on the unfinished project depending on how everything sorts out.

Li-Cycle is expected to release its next earnings report at the end of February.

Brian Sharp is WXXI's investigations and enterprise editor. He also reports on business and development in the area. He has been covering Rochester since 2005. His journalism career spans nearly three decades.