State takes $16 million hit with Schott Solar closure
Posted at: 06/29/2012 6:21 PM
| Updated at: 06/29/2012 6:49 PM
By: Chris Ramirez, 4 On Your Side
The State of New Mexico will not be able to recoup any of the millions of dollars it gave to Schott Solar in Local Economic Development Act funds, even though the City of Albuquerque and County of Bernalillo will get money back.
In 2008, SCHOTT Solar made big promises including 1,500 new jobs, $700 million in new payroll, and $16 million in new taxes going directly to local governments.
LEDA funds are used as an incentive tool to encourage a private company to locate in New Mexico.
Most recent contracts have claw back provisions which mean if the company doesn’t meet it’s promises, the government that issued the LEDA funds can ask for some, or all of the money back.
It’s a means to hold private businesses accountable to the public funds they receive.
“We're using public money,” John Garcia, Director of the City of Albuquerque’s Economic Development, said. “We have a responsibility in government to represent the people in these kind of deals and it’s very important that we protect the interest of the party we represent and that is the citizens."
To lure SCHOTT Solar in, three governments chipped in LEDA funds.
The break is as follows:
County of Bernalillo- $500,000
City of Albuquerque- $1 million
State of New Mexico- $16 million
The County and City will get all or part of the funds back because they negotiated claw back provisions.
And since SCHOTT Solar did not meet its obligations, the governments are entitled to recoup the funds.
However, KOB 4 On Your Side uncovered a document that reads “the State of New Mexico specifically requested that no performance claw backs be tied to their contribution.
That means while the City and County are entitled to get funds from SCHOTT Solar, the Bill Richardson Administration negotiated a $16 million loss for the State.
We showed the documents to current Governor Susana Martinez.
"The State did not want (claw back provisions) under the Richardson Administration,” Martinez said. “They basically gave away taxpayer dollars with no consequences. It's infuriating because they took tax dollars, state money and ran and we can't get any of it back."
SCHOTT Solar sent a statement today that reads in part the company will work with local and state officials to meet all of its contractual obligations.
The company poured $125 million of it’s own money into Albuquerque facilities and equipment.
SCHOTT announced Thursday it will lay off it’s entire Albuquerque-based workforce.
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