I’ve been meaning to write more about TerraSphere/PharmaSphere for some time now. (You can read this for an outline of the history of the South Worcester Industrial Park (SWIP), where PharmaSphere may eventually set up shop. In a parallel universe.)
But here’s a quick question for you PharmaSphere junkies: if Urban Agricultural Corp “currently holds an exclusive license for the Commonwealth of Massachusetts … from TerraSphere Systems, LLC“, then what exactly is PharmaSphere going to do at SWIP?
I completely agree with Bill that TerraSphere/PharmaSphere is just smoke and mirrors, and I’m begging the news media to investigate and shed some light on Converted Organics, TerraSphere, PharmaSphere, Urban Agricultural, and Aquamer.
TerraSphere is a company that “designs and builds highly efficient systems for growing organic fruits and vegetables in a controlled, indoor environment.” (This is shorthand for “we grow plants in something that looks like it was out of the Farrah Fawcett-Majors scene in Logan’s Run.”)
The reason why you should care about TerraSphere is that it created (either two years ago or just recently; it’s unclear when) a subsidiary called PharmaSphere. (Also, according to the MA Secretary of State, there’s a PharmaSphere and a PharmaSphere Worcester; I have no idea what that’s about, either.)
According to an article by Scott Zoback in WoMag (from last year), “[i]n January 2008, city officials granted Boston-based PharmaSphere rights to a significant plot in the long-struggling South Worcester Industrial Park for $1. … [I]t’s been a good deal for the company, perhaps reflecting the expertise of its top executive, David Darlington, a political lobbyist from Rhode Island who serves as chairman of Rhode Island’s Turnpike and Bridge Authority and of the New England Trade Adjustment Assistance Center.”
Recently, a company called Converted Organics began the process of acquiring TerraSphere. Now, to a financial novice like me, that like TerraSphere might actually be worth buying. It becomes a little more tricky when you read parts of the Scott Zoback/WoMag article:
PharmaSphere has said it will license its growing technology from a Canadian company, TerraSphere Systems, LLC — which is actually PharmaSphere’s sister company, sharing offices in Boston, and run by William Gildea, the son of Darlington’s late partner in the lobbying firm Gildea-Darlington Group LLC. (The younger Gildea is also listed as PharmaSphere’s manager in filings with the Secretary of State. A Mark Gildea is listed as the resident agent.)
[David] Darlington [of PharmaSphere] is the main partner in government relations/public relations firm Gildea-Darlington Group LLC, cofounded by the elder William Gildea, a widely-known New England political figure who was the longtime head of the New England Governors Conference and former city manager of Brockton and Newport, R.I. The Darlington-headed consulting firm specializes in, among other things, getting public money for non- and for-profit organizations, and helping entities “concerned about their interaction with government regulators and legislators,” according to its website. The company’s expertise includes “[using] public relations as a tool to achieve favorable treatment from legislators regarding regulatory and tax issues,” and “[creating] favorable taxes and regulations regarding your industry.”
PharmaSphere and its sister companies, TerraSphere and Converted Organics, all exist as related organizations under the umbrella of a firm called ECAP, LLC, which helped arrange the financing of all the companies. ECAP boasts on its website that it identifies and qualifies promising environmental investment opportunities involving contaminated or “brownfield” properties.” The site also features what appear to be childhood yearbook headshots of its management team.
William A. Gildea, in addition to his role at PharmaSphere, is listed as the Director of Project Development for TerraSphere Systems, LLC and the founder and president of ECAP, LLC. (Darlington calls him the “guru” of the whole operation.) He’s registered with the Secretary of State for both of those companies, and for Converted Organics as a director, although he apparently resigned his role on the Board of Directors in 2008, staying on as a consultant.
An Edward Gildea is the president and CEO of Converted Organics, and registered with the state as a member of TerraSphere, while a Catherine Gildea is a partner in the ECAP Insurance Agency.
So — Converted Organics is buying TerraSphere, but some of the players are exactly the same people.
But wait! There’s a company called Urban Agricultural Corp (or, according to this SEC filing, Urban Agriculture Corporation) that – as mentioned earlier – ”holds an exclusive license for the Commonwealth of Massachusetts.” In fact, “[u]nder the terms of the license for Massachusetts, Urban Ag is obligated to pay TerraSphere a non-refundable, non-creditable license fee of $1,000,000 over twelve months ($250,000 of which has been paid) and a mid-single digit royalty on sales of produce grown with the use of TerraSphere technology (with a specified minimum annual royalty of between $60,000 and $78,000 over the life of the license). The term of the license is for the greater of 15 years or the life of the TerraSphere patents. If Urban Ag expands its operations in Massachusetts beyond certain levels, additional license fees may become payable to TerraSphere.”
Why would someone hold these licenses if this were all less than legit? And Urban Ag is so successful that a company called Aquamer is going to buy them!
Well, Urban Ag is privately held, but they’ve got a CEO named Edwin A. Reilly. Reilly previously worked as President and CEO of a company called Bellacasa Productions, whose chairman was Marshall S. Sterman.
Funnily enough, Aquamer is a spin-off of Bellacasa, and Sterman is President and Director of Aquamer. And now Aquamer is going to buy Urban Ag.
And Sterman was recently appointed to the board of directors of Converted Organics, which is going to buy TerraSphere. And the company that owns the licenses for TerraSphere is Urban Ag, which is being bought by Aquamer, of which Sterman is President and Director.
It’s like one big carousel of fun.
(I’ve been tempted to put together a diagram; let me know if you think that would be helpful.) [Updated -- the diagram is here.]
I think the City and its citizens deserve an explanation for why we’ve provided incentives to a company that doesn’t own the licenses it says it did.
Those of you who are frustrated that we (as a city) have wasted more than two years waiting for these folks to do something at SWIP can read this forum for laughs.
(I personally feel this is Rhode Island’s retribution for a company called Alpha-Beta Technologies. According to the Boston Globe, “in 1993, Rhode Island made a big loan to a Worcester biotech called Alpha-Beta Technologies Inc. The state sold $30 million of bonds to help Alpha-Beta build a plant in Smithfield.” The company failed, and though RI was able to sell that plant, the state did so at a loss.)