By Paul Alexander
As rumors swirl about New York Gov. Andrew M. Cuomo running for president – he “is definitely running,” Congressman Tom Suozzi said recently – one question looms. Will the Buffalo Billion, a program Cuomo started with the best of intentions, undo his presidential ambitions?
After proposing a five-year $1 billion development plan targeted for Buffalo in 2012, Cuomo committed $225 million from that fund – tagged the Buffalo Billion – on Nov. 20, 2013, to build a green energy facility at RiverBend in South Buffalo for two companies, one of them a solar panel manufacturer named Silevo.
Seven months later, Silevo was bought by SolarCity, the rooftop solar panel company that was the brainchild of Elon Musk, the tech guru behind Tesla Motors and SpaceX. Once Musk entered the picture, the size of the Buffalo facility increased by five times — and it was now called a gigafactory.
Ultimately, Cuomo more than tripled the state’s commitment to $750 million, out of a total budget of $1 billion, to build and equip the 1.2 million-square-foot gigafactory.
The state would retain ownership but lease the facility to Musk for 10 years at $1 a year. In return, SolarCity promised to create 1,460 jobs at the factory and 1,440 jobs from suppliers and service providers.
No sooner had work begun on the facility than allegations of corruption started to surface. On Sept. 22, 2016, U.S. Attorney Preet Bharara announced the arrest of nine people associated with the project. The indictment charged that Louis Ciminelli, a “Cuomo mega donor” whose company won the construction contract for the gigafactory, bribed Cuomo aide Todd Howe to ensure he landed the contract.
When Cuomo agreed to expand the initial project five-fold, he assumed SolarCity would remain a viable business enterprise. But during 2015 and 2016, the company racked up $1.6 billion in losses. Bankruptcy was averted when Musk arranged for Tesla to buy SolarCity in November 2016 for $2.6 billion in an all-stock deal.
Right away, Tesla cut 3,000 SolarCity jobs and CFO Jason Wheeler and CEO and co-founder Lyndon Rive made plans to leave. Since Tesla was cash poor, Musk cut a $256 million deal with Panasonic that allowed the Japanese manufacturer to assume the 10-year lease on the gigafactory, where it will produce solar cells and modules to be bought by Tesla. Panasonic and Tesla then dropped the number of guaranteed jobs from 1,460 to 500.
Here is the reality. Cuomo spent $750 million on a now-defunct company, SolarCity, for a project that might create hundreds, not thousands, of jobs. Cuomo’s friends made millions, members of his staff face indictments, Musk landed a sweetheart deal and Buffalo got a massive factory that will probably go partially unused. No doubt Cuomo’s political enemies will use the Buffalo Billion against him. The only question is, will it completely destroy his road to the White House?
Paul Alexander is a former reporter for Time magazine and the editor of the essay collection “Ariel Ascending: Writings About Sylvia Plath.”