BUFFALO, N.Y. -- New York state is cutting its losses on more than $200 million in equipment it purchased as part of the Buffalo Billion.
The state is selling and scrapping some of the tools and machinery it originally bought for the RiverBend manufacturing facility in South Buffalo.
NY CREATES, the state-associated non-profit overseeing RiverBend, confirmed it is getting rid of equipment originally valued at $207 million while keeping about $32 million of what it owns. It won't say how much the return has been so far because it doesn't want to negatively impact negotiations in progress or future negotiation, but a source said it won't be near the original value.
As part of the Buffalo Billion, the state agreed to build the RiverBend complex in South Buffalo and purchase high-tech equipment to manufacture solar panels, which it would in turn lease to its tenants. Those tenants would eventually become Tesla and Panasonic, but the state purchased most of this equipment in 2015 and early 2016, before Tesla purchased SolarCity.
Then Panasonic left in 2020. NY CREATES said $127 million of the equipment to be sold is what Panasonic employees were using. The non-profit said the changing tenants, products being manufactured and specialized nature of the equipment is making things difficult, but it has retained a global financial services group to remarket the equipment and attempt to get the best price.
The good news, according to a spokesperson, is the state is moving this equipment to make room for new equipment Tesla has already purchased as the company continues to look at expanding its operation in Buffalo.
“In recent years, NY CREATES has strengthened our finances, increased transparency, improved accountability, and streamlined operations across our statewide portfolio. As part of our long-term strategy, we are taking steps to reduce both excess inventory and expenses, which includes selling unneeded tools and equipment," spokesperson Jason Conwall said. “Since arriving in Buffalo, Tesla has made important contributions to the local economy and their growth at RiverBend mirrors the economic renaissance experienced throughout the region, prior to the COVID-19 pandemic. Tesla expects product demand to continue to increase and has demonstrated their commitment to Western New York with recent, significant investments, including in new tools and equipment, to expand their manufacturing operations in Buffalo. The company is currently looking to ramp up operations in the factory and by clearing space occupied by tools no longer in use, they can create more jobs for Western New Yorkers – and that is critical for the region as we all work to build back the economy in the wake of the pandemic.”
The state is also in the process of recycling about $22 million worth of equipment that has been stored in the Wheatfield Business Park, the old Bell Aerospace building. The return on that will be very limited.
The scrap process has already started and should be finished by Wednesday. NY CREATES said an additional $16.5 million worth of equipment there is being sold.
Conwall said while Tesla originally moved the equipment, the state has paid for storage for the last 11 months at nearly $250,000.