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(NECN: Peter Howe, Ayer, Mass.) Evergreen Solar's stunning announcement it will close its barely-three-year-old factory at the old Fort Devens and lay off 800 people by March 31 is a business failure some critics of Governor Deval Patrick are calling a major public-policy failure as well.
At Patrick's urging, the state shovelled $58 million into Evergreen's Devens expansion, including about $20 million in cash tied to specific job-creation targets, $13 million in infrastructure improvements, tax breaks, and the multimillion-dollar value of a $1-a-year lease for the land on which the $430 million factory sits.
But in a disclosure many said seemed timed to be obscured in the news by a massive statewide blizzard, Evergreen said it will close the plant by the end of March, blaming low-cost Chinese competition in the solar-panel market. Evergreen, which will keep its Marlborough, Mass., headquarters, already makes panels in China and will shift manufacturing from Devens to China and Midland, Michigan, later this year.
"The reaction is disappointment to see 800 jobs in Massachusetts disappear, but also a sense of frustration,'' said state Representative Bradley Jones, leader of the recently doubled Republican caucus in the state House of Representatives. "It raised the whole question of how we approach picking winners and losers, and whether we as a commonwealth should be doing that.''
Patrick is also getting heat from members of his own party. Speaking in favor of a bill to guarantee all private-sector workers are guaranteed sick leave, state Senator Patricia Jehlen, a Somerville Democrat, said Thursday, "We gave $58 million and benefits to a corporation that is running off to China," Jehlen said. "That's 24,000 dollars per job per year in public benefits to this company. Maybe it's time to think about benefits that will allow working families to be stable and secure, keep their homes, keep their jobs and keep their families healthy."
Patrick aides insist they have no regrets about the deal, saying they were fighting for every job they could bring the state at a time other states were offering Evergreen much more to build the manufacturing plant in their states. Evergreen says the $58 million figure is somewhat overstated because it includes a lot of tax breaks it'll never get to use and infrastructure improvements that will stay in place at Devens no matter who comes next. The $20 million cash grants, company executives said, were tied to a specific number of jobs per year -- 350 jobs for five years, 310 jobs for seven years -- and they say because they hired so many people faster than they thought, they've actually delivered 80 percent of what they promised job-wise to the state. As a result, Evergreen estimates it will have to return only $3 million to $4 million of the $20 million to Massachusetts -- a figure Patrick aides have publicly disputed, but they haven't come back with a counter-proposal number.
State economic affair secretary Gregory Bialecki said: "The company has worked hard to compete against heavily subsidized foreign competition and to live up to its commitments to the commonwealth. For our part, we must now ensure that impacted workers receive the resources they need to make successful transitions."
No other green energy startup's ever come close to getting what Evergreen did in grants, loans, and assistance from the state Clean Energy Center. According to Robert Keough, assistant secretary of the state Executive Office of Energy and Environmental Affairs, since Patrick took office, the only three other deals were:
- For Watertown battery maker A123 systems, a $5 million "secured forgivable loan" which will be waived if the company doubles its current 250-person Massachusetts workforce and makes "a significant capital expenditure as part of a larger anticipated build-out of approximately $80 million by the end of 2014." This loan closed on October 8, 2010, and A123 will be required to make its first report on April 8 of this year.
- For Waltham wind-turbine developer FloDesign, a $3 million financing package consisting of a $700,000 five-year forgivable loan, $600,000 convertible grant, and $1.7 million from the state Renewable Energy Trust for installation of FloDesign turbines, which in contrast to wind turbines that look like airplane propellers have a design reminiscent of aircraft jet engines. Forgiveness of the loan after five years is contingent on FloDesign maintaining its corporate headquarters and "primary research and development facility" in Massachusetts, and creating or retaining 150 jobs in the next three years and maintaining those jobs for an additional two years.
for full forgiveness. The loan closed on March 26, 2010, and as of November 19, the company reported it had doubled to 40 full-time equivalents in the state.
- For TPI Composites of Scottsdale, Ariz., which has announced plans to build a wind blade innovation center in Fall River, a $250,000 conditional grant, closed on July 1, contingent on creating 30 "net new jobs" within two years and maintaining the positions for three subsequent years. TPI is due to make its first report to the state July 1.
But Jones says given the Evergreen Solar fiasco at Devens, the state needs to rethink the entire policy of giving loans and grants to specific companies. "Should we be using tax credits to pick winners and losers?'' Jones said. "Or should we be trying to create a broader-based positive environment for all businesses, and then let the marketplace determine which ones are going to thrive.''
With videographer Ken Lucas