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SolarCity funding in limbo as state oversight board postpones meeting

ALBANY – Hours after legislative leaders refused to commit Monday to approving $485 million in additional funding for Buffalo’s SolarCity project, Cuomo administration officials said a key funding vote by a state oversight panel scheduled for Wednesday has been postponed.

On Wednesday, the state’s Public Authorities Control Board was set to consider the nearly half-billion dollars in funding that at the last minute was written into the 2016-17 state budget for continuing construction of the SolarCity solar panel factory in South Buffalo. The money is needed to keep the project going, though officials at SUNY Polytechnic Institute, one of the overseers of the RiverBend initiative, did not immediately respond to requests about how long construction can continue using previously approved funding.

The little-known Public Authorities Control Board, which approves billions each year in state projects, is controlled by Gov. Andrew M. Cuomo and the leaders of the State Senate and the Assembly. The three representatives of Cuomo, Assembly Speaker Carl E. Heastie, D-Bronx, and Senate Majority Leader John J. Flanagan Jr., R-Huntington, must unanimously agree for any money to be released by the panel.

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It was unclear Monday night the extent to which the legislative leaders’ reluctance to automatically embrace the SolarCity project’s next funding stream is because of ongoing headlines about the Buffalo Billion investigation by Manhattan-based U.S. Attorney Preet Bharara or if they were merely trying to get more details about exactly how the $485 million would be spent.

One source, speaking on condition of anonymity Monday, said some red flags were raised in the Legislature when the control board’s internal agenda document included vague language about future, undetermined beneficiaries that were to be funded through the Buffalo Billion.

A new date for the control board’s now-rescheduled meeting has not been set, but officials said they expect the panel to consider the next round of funding for RiverBend in the next week.

After a nearly 90-minute, closed-door meeting with Cuomo at the State Capitol, where a range of unrelated issues were discussed, Heastie and Flanagan declined to say how their representatives were going to vote at what, at the time, was the control board meeting scheduled for Wednesday.

“I don’t want to make a determination on that. We have to look at it,” Heastie said when asked whether his appointee to the control board might withhold support for the funding.

Flanagan was asked whether the funding might be put on hold, given the ongoing investigation by federal prosecutors of the Buffalo Billion, whose SolarCity project at RiverBend is the program’s most expensive.

Flanagan said he was not immediately steeped in the details of the funding request. “I think it should be properly vetted, and I’m sure they’ll take appropriate actions,” Flanagan said Monday of the coming meeting of the control board.

The state is paying $750 million to build the facility and to purchase equipment that SolarCity will use in its manufacturing process.

The state budget that took effect April 1 includes $485 million for RiverBend. The item was added in the budget to prevent recurrence of an embarrassing episode in February when nearly 200 construction workers on the project were temporarily laid off following a “cash-flow problem” involving the state’s economic-development agency.

In April, Cuomo told The Buffalo News that the special line item in the budget for the SolarCity project was meant to avoid “any vendor problems” on the project.

Though already approved in the budget, the control board must give final approval before the money can be released.

The funding request, according to a control board agenda made public Monday by the Cuomo administration’s Budget Division, officially comes from the state’s Empire State Development Corp. The request is for grants and loans for payments made by Fort Schuyler Management Corp., the SUNY Polytechnic nonprofit entity that makes payments to the general contractor on the RiverBend project.

A separate $200 million funding item – also part of the state budget – for a future Athenex pharmaceuticals plant in Dunkirk is not on the board’s Wednesday agenda.

Sources said that while the RiverBend project is one of Cuomo’s signature initiatives, lawmakers, including Republicans and Democrats from Western New York, are politically invested in an initiative that SolarCity says will produce 500 jobs at the solar panel plant and nearly 1,000 others in Buffalo.

Still, the project’s controversy is obvious and was instrumental in legislative leaders’ decision to put additional scrutiny on the $485 million funding request, according to a source who spoke on condition of anonymity. Just over two weeks ago, Bharara sent a subpoena to Cuomo’s office seeking, among a laundry list of items, internal documents from the administration about the Buffalo Billion, including the RiverBend project and how contracts were awarded for its development, according to a portion of the subpoena obtained last week by The News. That follows subpoenas sent last June to two other state offices about the Buffalo projects.

While it is unlikely, in the end, that legislative leaders will be a part of scuttling a project so far along, it is possible that they will seek to include some provisions to at least suggest added scrutiny or protections to be placed on the payments for the RiverBend project, according to one source.

On Monday, WGRZ reported Buffalo Mayor Byron W. Brown saying that he didn’t see “any interruption to the Buffalo Billion projects at all.” He told the television station that there has been a briefing “from the Governor’s Office through the Empire State Development Corp. to indicate that everything is on track” and that state officials “don’t see any problems with the projects moving forward.”

On Monday night, the Cuomo administration did not directly comment on the remarks by Heastie and Flanagan, but referred a reporter to the governor’s comments on the overall Buffalo Billion program. That was days after revelations about the latest Bharara subpoena about the program and the decision by Cuomo to bring in an outside law firm to look at funding decisions involving RiverBend and other Buffalo Billion projects.

On May 2, Cuomo said the program is “running at the same speed,” and he defended the initiative he announced in 2012 to steer $1 billion in special state funding for economic development in Western New York in an initiative that came to be known as the Buffalo Billion.

“The Buffalo Billion,” Cuomo said at the time, “is doing great work.”