Wall Street Journal
State officials recently wrote down more than $1 billion in economic development investments on several high-tech projects across upstate New York, including the solar-panel factory in Buffalo operated by Tesla Inc., documents show.
Gov. Andrew Cuomo first announced the factory in 2013 as the cornerstone of an effort to jump-start the upstate economy with manufacturing facilities developed by the State University of New York’s Polytechnic Institute. The state spent $959 million to build and equip it.
The Buffalo plant, as well as other factories near Syracuse and Plattsburgh, is owned by the Fort Schuyler Management Corp., a nonprofit entity led by officials from SUNY Poly and other state agencies. In financial statements posted on its website last month, Fort Schuyler wrote down the value of the Buffalo factory by $884 million and other high-tech projects by $311 million. The statements haven’t been previously reported.
Auditors said in the documents that they re-evaluated the terms of the facilities’ leases and determined the corporation “will not likely receive the direct financial benefits associated with ownership of the manufacturing facility and equipment.” Fort Schuyler’s financial statements, which cover the fiscal year ended June 30, 2018, valued its land, buildings and equipment at $94.8 million, down from $1.2 billion in 2017.
The change is refueling debate over the Democratic governor’s economic development programs and whether they deliver a good return for taxpayers. State officials insisted the write-downs were merely an accounting change, but critics said they show the facilities have little residual value for the taxpayers who built them.
“This is black and white evidence that they wasted $1.2 billion of taxpayer money,” said E.J. McMahon, research director of the Empire Center for Public Policy, a fiscally conservative think tank.