Questions the PACB Should Ask About Solar City and State Econ Dev Non-Profits

Does any New Yorker think taxpayers should spend $1.5 million to create one factory job for five years? Well, that’s exactly what is slated to happen at Solar City’s $750 million, taxpayer funded, Riverbend factory in Buffalo. As part of a secret agreement between Solar City and the SUNY Research Foundation the number of factory jobs Solar City pledged to create at the plant was slashed from 1450 to 500. Details of the deal have never been publicly announced, but were discovered by reporters at the Investigative Post in Buffalo when they reviewed state records and company financial filings.

The fact that SUNY Research Foundation, a state controlled non-profit was able to OK a huge reduction in promised jobs, with no review by the legislature or public comment, is a very big deal for New Yorkers. It raises the question of whether any of the state’s giant taxpayer subsidy deals are worth the paper they are written on. Factory jobs for Buffalo  — not white collar technology or marketing jobs —  was the political selling point and policy rationale for the $750m investment of taxpayer funds in the Solar City plant.The city of Buffalo is one of the poorest cities in the United States, and the basic idea behind the Solar City factory was to provide well paying factory jobs for unemployed people from poor Buffalo neighborhoods. There is no way that the legislature would have appropriated funds for the Solar City deal if they knew so few factory jobs would be created.

On May 25th, the Public Authorities Control Board will vote to release $485m in state funds to the Solar City Riverbend factory. The PACB includes representatives from the Governor, State Senate and Assembly. If we were legislative representatives we would have serious questions about the Solar City project and about the state’s economic development projects led by SUNY Poly and the SUNY Research Foundation.

Questions the PACB should ask about governor’s use of non-profits to for very large state economic development projects

1. Do you believe it is appropriate for SUNY RF to OK a huge cut in factory jobs for the state’s marquee economic development project without any public comment or legislative oversight?
2. How do we know that SUNY RF or SUNY Poly or another state controlled non-profit won’t slash the job or investment targets for another major subsidy project?
3. Why shouldn’t the legislature have a say in major changes in extremely large state subsidy contracts?
4. How is it good governance for the state of New York to have non-profit organizations, which appear not be subject to state contracting and conflict of interest rules, be responsible for spending and overseeing billions in tax-payer funds?
5. What state body is supposed to be ensuring that state controlled non-profits are acting responsibly?
6. Why not shift responsibility for all state economic development to the Empire State Development Corporation?
7. What is the point of having ESDC and its professional staff if not to oversee this kind of development?
8. Is the SUNY Research Foundation, SUNY Poly, Fort Schuyler Management a government agency or an independent non-profit group?
9. If SUNY RF is an independent non-profit group, how is it that the contract between SUNY RF and Solar City says that SUNY RF is an “affiliate” of the State of New York,  which means, per the definition in the contract, that the SUNY RF is “controlled” by the State of New York. Is SUNY RF controlled by the state?
10. How is that a non-profit can be controlled by the state and not subject to the same rules as state agencies and authorities?