SolarCity slashes Buffalo factory commitment

SolarCity has sharply reduced its job creation commitment for the solar panel manufacturing plant under construction in Buffalo from 1,460 to 500 jobs, according to state records and filings the company submitted to the Securities and Exchange Commission last fall.

The company remains committed to a total of 1,460 jobs in Buffalo, but the majority of them will not be employed at the plant. Documents do not specify what kind of jobs they might be.

“With new advanced semiconductor manufacturing equipment that enables automation, we believe 500 is the minimum number of manufacturing jobs the factory will require,” said Kady Cooper, director of communications for SolarCity. “If that is the case, we will hire more staff for sales, project development and other functions.” 

The changes have been noted in the details of public documents since last fall, but have not been otherwise disclosed by state or SolarCity officials.

“As the partnership has moved forward ,adjustments were made to the types of positions SolarCity would need,” said SUNY Polytechnic Institute spokesman David Doyle.

The reduced manufacturing job commitment represents a setback for the project, the cornerstone of Gov. Andrew Cuomo’s Buffalo Billion program. The state is investing $750 million to build and equip a 1.2 million square foot plant for SolarCity, which has been touted as the largest solar panel manufacturing plant in North America.

The state’s investment works out to $1.5 million per manufacturing job, or $514,000 per job for all 1,460 positions in Buffalo.

The revised manufacturing job commitments are in marked contrast to numbers detailed in previous SolarCity filings with the SEC, an earlier agreement between the company and state, and public statements by Cuomo.

The governor promised 1,450 “direct manufacturing jobs at the new facility” at the topping off of the factory at Riverbend in August, according to a press release issued by his office at the time.

The SUNY Research Foundation agreed to the change in October 2015, according to state records. The reduction from 1,460 to 500 jobs at the factory was included in an amendment to an earlier agreement with the company. The same month, SolarCity’s SEC filings included the reduced number of projected jobs at the factory.

The changes agreed to last fall that reduced the number of manufacturing jobs in Buffalo from 1,460 to 500 also involved an increase in direct jobs statewide from 3,500 to 5,000 within 10 years.

SolarCity’s main line of business is the installation of rooftop solar panels on houses; the factory at Riverbend represents the company’s first foray into manufacturing.

Under the terms of its agreement with the state, SolarCity must pay a $41.2 million penalty in years in which it fails to meet specified investment and job creation targets, according to SEC filings.

While the governor and other state officials have continued to praise the SolarCity project, they have not publicly disclosed the reduced jobs at the plant at Riverbend, save for the posting of a revised agreement on the website of the Fort Schuyler Management Corp., which is managing the project.

Likewise, SolarCity does not appear to have disclosed the changes in any public announcements, although they have done so in SEC filings.

Cooper said the reduction in manufacturing jobs does not represent a setback.

We still have the same number of jobs being created,” she said. “We’re still as optimistic as ever.”

The reduction in the planned workforce raises a question as to how much of the plant SolarCity will have use for, but Cooper said the company still intends to use the entire facility.

News of the reduced jobs represents only the latest setback for the project. Investigative Post reported in December 2014 about the curious circumstances under which LPCiminelli, a major Cuomo campaign contributor, was selected as project developer and efforts by state officials to suppress records related to that procurement process.

Last fall, news broke that U.S. Attorney Preet Bharara had opened an investigation into that selection process and other aspects of the Buffalo Billion program. The investigation has since broadened to include other aspects of the governor’s economic development efforts across upstate. Those under investigation include Joseph Percoco, one of Cuomo’s closest aides, and Todd Howe, a lobbyist whose law firm had relationships with several companies that received work from the state as well as state entities in charge of awarding that work.

Two weeks ago, a lawyer for Cuomo announced that a former federal prosecutor would lead the administration’s own investigation into the Buffalo Billion and other economic development programs, saying the ongoing federal probe had raised questions of “improper lobbying and undisclosed conflicts of interest.”

Earlier this week SolarCity released its earnings report for the first quarter of 2016 that showed the company posted a record net loss of $281 million. The company’s stock promptly lost 21 percent of its value. It is trading this afternoon at about $19 a share, down from $57.26 as recently as mid-December.