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Monday, June 22, 2009
County Jumps in To Save Solar Deal
By Sean Olson
Copyright © 2009 Albuquerque Journal
Journal Staff Writer
Bernalillo County will have to spend $4.5 million to acquire land for a proposed solar manufacturing site on the far West Side because developer SunCal Cos. couldn't meet deadlines for the project.
SunCal was supposed to acquire and donate the property for the proposed Solar Array Ventures Inc. operation in exchange for the county taking over the developer's obligation to build a water line to the project.
Bernalillo County Manager Thaddeus Lucero said SunCal could not meet a Solar Array Ventures, or SAVe, timeline to acquire the land, forcing the county to take on both the land acquisition and water-line construction responsibilities at a cost of about $8.5 million.
"We can't wait. No one wants to wait," Lucero said.
The county now will fund the project with bond proceeds, but will be paid back through $8.5 million in state money promised by Gov. Bill Richardson's administration. The state money will be doled out to the county over about two years, county economic development coordinator Daniel Gutierrez said. The county will still have to pay some interest on its bonds, he said.
The land donation is part of a nearly $200 million incentive package for the solar manufacturer, which expects to employ about 200 workers by 2010 and eventually more than 1,000.
SunCal has already built more than 1,500 feet of the roughly 2.5 miles of water line needed and is still responsible for grading the land used in the project.
SunCal spokesman David Soyka said in a statement that his company was unable to meet the SAVe deadline to acquire the land and break ground on the project but would continue with the grading process.
SunCal was originally responsible for completing the entire pipeline through a development agreement with the city-county Water Utility Authority. SunCal would have recovered its costs through fees charged to businesses or homes that later hooked into the water line.
But an incentives package the county prepared for SAVe in April expedited the project. In that deal, SunCal would have footed the bill for a $4.5 million parcel of land — of which it already owns a minority interest — and would then have been reimbursed through the county bond proceeds.
Lucero said the county spoke with SunCal last week and learned the company would need 45 to 60 more days to get financing for its share of the upfront costs. That didn't meet SAVe's timeline to break ground on its plant, so the county decided to bypass SunCal and use its bond proceeds to fund the project directly, he said.
Gutierrez said the county couldn't take any chances with delays when it is trying to facilitate a company that would bring high-paying jobs to the county.
"We feel we have a responsibility to keep our obligations (to SAVe)," he said.
Former County Commissioner Deanna Archuleta said in April that SunCal was not totally off the hook for the project because they would still be donating land, donating rights of way and had paid for the water line's design.
The Journal asked SunCal to list all its financial obligations related to the project, including donations. Soyka, in his statement, said SunCal is responsible for grading work. He did not list any other obligations.
SunCal is still responsible for any extensions of the water line extending past the planned SAVe plant through its development agreement with the water authority. Extension of the water line would serve any companies SunCal brings to New Mexico as part of its own West Side development.
The water authority originally approved SunCal's application for the water line to facilitate Tesla Motors, which had been shopping for plant space in New Mexico. When Tesla later decided to locate in California, the agreement was still valid.
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