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1366There are reasons to be hopeful about the 1366 Technologies plant in Genesee County. The company has survived when some solar companies have failed. It has a facility in Massachusetts where it says it found a way to make low-cost solar wafers, which is key to being competitive with China.

Two years ago, 1366 Technologies said it would not accept taxpayer dollars until it was sure these wafers could be scaled to a large manufacturing plant. The Boston Globe reported:

…executives said they won’t tap taxpayer money until they prove the company’s technology and products can succeed in a fiercely competitive industry increasingly dominated by low-cost Chinese manufacturers.

“Once everything works optimally, we want to scale to a larger facility,” chief executive Frank van Mierlo said. “That’s when we’ll take the [federal] money. It protects the taxpayer.”

It’s not clear what protects the taxpayer in this Genesee County deal. Taxpayers are in deeper than the private sector. 1366 Technologies is a privately-held company, which makes it hard to gauge what’s going on with its finances. But this report says the company has $69.5 million in private equity. The state is putting in $97 million. The federal government guaranteed a $150 million loan for this plant.

The state announced 1366 Technologies will eventually invest $700 million into the plant, but there’s no indication this company has this kind of money, at least not yet. The company promised to create at least 600 jobs of the promised 1,000.

(Think this is troubling? Check out the state’s investment in Buffalo’s Solar City.)

These tax dollars don’t include the cost of the Genesee County land, known as STAMP. The county IDA has been spending tax dollars to buy up farmland – without ever knowing if anyone would locate a company there. The county also committed to putting in the infrastructure. In 2013, I reported that the cost to build STAMP could be $350 million over 10 to 15 years. (STAMP is a great example of industrial sprawl, by the way. We don’t have a lot of empty buildings in Rochester? We don’t have the infrastructure already existing here? And while I’m at it, this plant will be 50 miles away from Rochester. Is this really a win for us?)

There’s no guarantee this company’s full-scale manufacturing plant will be successful.

“If you’re so convinced, why do you need our money, why don’t you go to Wall Street?” asked George Conboy of Brighton Securities. “Whenever you go to public funding like this, you don’t have the market disciplines. When you have market discipline, someone’s putting up their money. In this case, someone is putting up someone else’s money – taxpayers’ money.”




12 Responses to I’ll Be the Dark Cloud

  1. October 7, 2015 at 6:57 pm John Moriello responds:

    It’s a minor variation on the oh-so-true, “Socialism works great until you run out of other people’s money.”

  2. October 7, 2015 at 7:29 pm Frank Petronio responds:

    Thank you Rachel. We all know there’s a direct money trail to our politicians from these guys. And it’s so stupid to have IDAs fall all over themselves competing to give our money away…. What about every other small biz that doesn’t get these breaks?

  3. October 7, 2015 at 8:18 pm Steve Reese responds:

    Some time in 2012 it was announced that the STAMP project, in its embrionic stage then, could bring 30,000 jobs between Buffalo and Rochester. (Reported by WCJW radio in Warsaw, and other outlets). Not only is an influx of that magnitude laughable, in reality it would be impossible without enormous infrastructure changes Genessee County and NY State taxpayers would have to pay for up front. By the time the Key to the Project was handed out to an RIT professor in a ceremony, in 2012 or 2013, the employment numbers were a more reasonable, but still very optimistic 3000. Now we hear 600 to 1000. If it goes like so many other optimistic GCIDA funded projects, realistic employment numbers for the employees of the company, not including construction perssonel to build it, will probably top out around 300. Still not bad, but let’s be realistic.

  4. October 8, 2015 at 12:08 am Jerry G responds:

    I hope Preet Bharara adds this to his list of misuse of public funds by Andy Cuomo.

  5. October 8, 2015 at 10:27 am theodore kumlander responds:

    “1366 Technologies will eventually invest $700 million into the plant, but there’s no indication this company has this kind of money,” Well that tells the whole story doesn’t I. 1366 is using their puffed up balance sheets as bait to sucker Brother Andrew into opening the Public Purse so the can stick the hand in up to the elbow. I wet my pants laughing . “executives said they won’t tap taxpayer money until they prove the company’s technology and products can succeed in a fiercely competitive industry increasingly dominated by low-cost Chinese manufacturers.”

    How are they going to beat the Chinese? Their factories are subsided by the Government and the people work for a dollar and hour. This is a scam pure and simple and of course it will work because it always does when it come to the Public Purse.

    • I’m guessing that since it is a private company we won’t be able to see items like “Officer’s Salary” and “Employee Benefits”.
      Too bad New York State doesn’t require them to publicly disclose their financial statements every quarter, as well as having a published annual audit.

    • October 9, 2015 at 12:12 pm Some Guy responds:

      I don’t consider Cuomo a sucker in these schemes at all, he’s been raking in the campaign dough from beneficiaries of the largess extorted at gunpoint from taxpayers for YEARS.

      Just don’t expect the U.S. Attorney for this area to lift a finger about the pay-for-play state government, as his wife is Cuomo’s #2.

  6. I’d like to chime in as someone who received a certificate in “Nanotechnology” at GCC and RIT in 2011 which was funded by this program. The reason for the location as we were told as students was because of inexpensive power coming from Niagara Falls.
    They said the power cost would be about a third of normal costs because of the proximity to the Falls.

  7. Not 1 third but 2 thirds of the cost for power.

  8. Pingback: Why There? » The Rochesterian

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