State officials announced late Monday that they are finally making good on more than $82.5 million in late payments to construction contractors on the SolarCity project, ending an embarrassing crisis that briefly threatened the jobs of nearly 200 workers.
In a statement issued jointly by Empire State Development Corp. and the State University of New York Polytechnic Institute, officials said the payments were being processed and are “slated to be delivered to SUNY Poly and disbursed as soon as tomorrow, Tuesday, March 1, 2016.”
“All stakeholders have been alerted and this action will bring payments current,” ESD spokesman Jason Conwall and SUNY spokesman Jerry Gretzinger said in the emailed release. “The project is slated to open on time and on schedule.”
That’s good news for contractors that have been owed money since October, and for the unionized and other workers who were given pink slips Friday because their employers could no longer afford payroll on one of Gov. Andrew M. Cuomo’s signature economic-development projects.
“I know that the governor and people are not happy about it and they wanted to make sure there was a resolution immediately,” said Daryl T. Bodewes, business manager for Local 276, United Brotherhood of Carpenters, which had 70 members laid off Friday. “From what I can see, that’s happening, and we’re pretty happy with the resolution that’s taking place.”
New York State, under SUNY Poly, is building a million-square-foot solar panel manufacturing facility – the largest in North America – for California-based SolarCity, as part of Cuomo’s Buffalo Billion economic-development initiative. The state is putting in $750 million, through Empire State Development and other agencies, while the company puts in $150 million.
The project at RiverBend in South Buffalo is expected to employ 1,500 direct jobs and another 1,500 jobs for suppliers and vendors. An estimated 900 to 1,000 construction workers are now on the site, and the $900 million project is slated to finish by the third quarter of 2017.
But the state, as of early Monday, had not paid invoices submitted by LPCiminelli and other contractors for November and December, totaling roughly $40 million a month, plus another $40 million is due in a couple of weeks, contractors say. That forced the hand of Mader Construction Co., Quackenbush Co. and Mollenberg-Betz.
As a result of the state promises, about 70 members of the Carpenters union, employed by Mader, were back on the job early Monday. But more than 110 workers from Local 22, United Association of Plumbers & Steamfitters, remained sidelined while state officials worked to free up the money.
Payment delays by the state on major projects aren’t unusual, contractors and union officials say, especially given the cumbersome and bureaucratic process that is required for the government. Last year, some payments to the winners of the 43North business plan competition also were late, although that was quickly fixed once the delay was disclosed publicly. And contractors have complained of not being paid since November for their work on the Athenex headquarters space in the Conventus building, also because the state has not released the funds.
But observers say this situation is unusual, particularly because of the scale of the project and the amount of money involved. “From what I’ve heard from the state,” Bodewes said, “this problem is being rectified and shouldn’t happen again.”