It was always a risky proposition for Gov. Andrew M. Cuomo to commit $1 billion to restart the Buffalo economy and, in particular, to spend the lion’s share of those tax dollars building and equipping a plant to manufacture solar panels.
We’re glad he did; Buffalo is a rising city again and it’s in good part due to the state’s focused efforts, including the $950 million in spent to build the solar plant at RiverBend. But here’s the thing: If you’re going take that chance, you’ve got to do it carefully, in part to shield it from the slings and arrows of adversaries trolling for an edge, but also to preserve the ability for the state to take similar risks on behalf of other constituencies. If it’s not a wise use of taxpayer dollars, the advantage is diminished.
Careful is not the word that easily describes the development of the RiverBend project. Not only was it corrupted by a bid-rigging scheme that produced federal criminal convictions, but it turns out that the state bought equipment for the plant that isn’t needed. It is now hoping to find a buyer for $50 million worth of unused high-tech equipment that has been hauled out of the plant and stashed in a Niagara County warehouse. Cuomo’s critics are having a field day with the revelation. And why wouldn’t they?
There may be some explanations for what otherwise looks like a major mess-up. The plant has gone through so many companies – from Silevo to SolarCity to Tesla to a Tesla/Panasonic partnership and, now, back to Tesla – that some level of confusion was all but guaranteed. Maybe not $50 million worth, but some.
Even with that, though, it’s hard to imagine why any equipment was bought and installed before it was certain to be needed. The usefulness of that approach couldn’t have outweighed its risks, which have become obvious.
When the RiverBend project was first crafted, it included a promise by the state to spend $400 million on equipment for the new factory whose construction was forecast to cost $350 million.
Costs rose. What was initially sold as a $750 million project ballooned into a $958.6 million undertaking – $660 million in construction costs and $298.5 for equipment.
The fact is that costs on big projects almost always rise. The early estimates, for a number of reasons, are usually wrong: inflation; unexpected delays; political calculation; wishful thinking.
Regardless, Buffalo has benefited from the program, the carping of its critics notwithstanding. The payoff has been slower in coming than anyone hoped, and it still hasn’t fully arrived. But Tesla is meeting its contractual hiring targets and, with the company’s Model 3 automobile secured, it is giving more attention to its solar energy division. Better days could be coming.
This is still a comparatively new industry, and given the destructive influence of fossil fuels on a changing climate, it’s one with legs. Whatever frustrations have accompanied the project, room remains for it to take off.
That would also have been true had the state taken a more measured approach to equipping the factory. It would have spent the $298 million slower and, some of it, not at all.
Tesla is paying to move and store the equipment and the state is hoping to find other productive uses it. “We are seeking alternative uses for the equipment, including making it available to other high-tech businesses that are considering a move or expansion in New York, or selling to interested bidders,” Empire State Development said a statement. Other possibilities include making it part of an incentive package to attract other solar cell manufacturers, or using it for academic research.
That’s turning lemons into lemonade. It’s better than the alternative but, better still, don’t buy the lemons.
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