Lowell Sun: State: Evergreen Solar should pay back more taxpayer money

By Chris Camire
01/13/2011

State officials are in dispute with Evergreen Solar Inc. over the amount of taxpayer money the solar-panel company must repay the commonwealth in the wake of its decision to close its Devens plant.

Evergreen officials said Tuesday the company will have to refund the state up to $4 million of taxpayer money in connection with its planned 800 job cuts and closure of its factory if it does not create additional jobs before 2014.

Housing and Economic Development Secretary Greg Bialecki disagreed with that figure yesterday.

“Our preliminary statement is that the company is going to owe us money sooner than that and the amount of money will be significantly more than that,” said Bialecki.

Evergreen was awarded $58 million in state subsidies in 2007 to open its $430 million solar-panel plant in 2008 at the former military base in Devens. The package included $21 million in grants, $22.6 million in tax incentives, a $1-per-year lease for 23 acres, and $13 million for infrastructure improvements in Devens.

The grant money was contingent on the company creating and retaining jobs. Evergreen spokesman Chris Lawson said because Evergreen created more jobs than expected, it only owes the state money if it does not create any additional jobs during the remainder of its eight year state agreement.

Although Bialecki disputed Lawson’s calculation, he could not specify how much the state believes it is owed. He said state officials plan to meet with representatives from Evergreen this week.

State Sen. Jamie Eldridge plans to file legislation aimed at ensuring economic development deals, such as the one made with Evergreen, contain strong “clawback” provisions that will allow the state to recoup money from companies that accept taxpayer money and then cut jobs.

Although there were clawback provisions in the state’s deal with Evergreen, Eldridge does not believe they were strong enough.

“The clawback provisions are too watered down and weak,” said Eldridge, an Acton Democrat. “So we need to strengthen them so the state gets the money they invest in these companies.”

Eldridge and others are also questioning whether corporate tax breaks do enough to create jobs.

Describing the $58 million in state subsidies invested in the solar-panel plant as a “public policy failure,” Eldridge said state leaders must figure out what went wrong with the manufacturing plant that was billed as a hallmark of Gov. Deval Patrick’s green-jobs agenda.

“We have to ask ourselves, ‘Is this the best way for us to attract companies, or should we be using that money to invest in infrastructure and work-force development?’ ” he said.

Eldridge pointed out that Evergreen Solar is not the first Massachusetts company to accept tax breaks and then lay off workers.

In 1995, the Legislature gave defense giant Raytheon Co. a large package of tax cuts after it threatened to move out of state, taking 16,000 jobs with it. Five months later, Raytheon offered buyouts to 4,400 workers, and two years later, the company cut 4,100 jobs.

Fidelity Investments, which also received a tax-cut package, shifted its work force outside Massachusetts after its requirements clause expired.

Although Bialecki said he is disappointed with Evergreen’s decision, he believes the company helped put Massachusetts on the clean-energy map.

“Massachusetts is seen as perhaps the leader in the clean-energy sector in the United States,” said Bialecki. “We think one of the reasons for that change is that at the time, Evergreen attracted a great deal of attention to Massachusetts.”

He said he does not think Evergreen’s decision to close its plant will have an adverse affect on Massachusetts’ clean-energy sector, pointing out that while the solar-panel industry is suffering in the U.S., industries such as battery technology and wind turbines are thriving,

“Although a lot of the different parts of the clean-energy business have flourished, making solar panels has proved to be very challenging,” said Bialecki.

On Tuesday, Evergreen officials said they can no longer compete with cheap solar panels produced in China, where manufacturing costs are considerably lower than those in the U.S. The company reported losses of $265 million in 2009, and $54 million through the first nine months of 2010.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, said calculating a tax credit’s impact on the economy is difficult. He thinks the state should shy away from giving large corporate tax credits to specific companies as a way to create jobs.

“There’s a difference between broader tax credits that are incentives for a variety of companies and tax credits given to an individual company,” said Widmer. “Those often backfire — not only in Massachusetts but around the country. We’re trying to pick winners and that’s hazardous at best, as Evergreen Solar demonstrates.”

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