Soraa walks away from $90M factory that NY built; $15M more brings new tenant
DeWitt, N.Y. — In 2014, the development arm of SUNY Polytechnic Institute agreed to build, with $90 million in state money, a factory in DeWitt for an LED light bulb manufacturer.
The company, California-based Soraa, agreed to create 250 full-time, high-tech jobs at Collamer Crossing Business Park and to encourage Soraa contractors and suppliers to create another 170 jobs in Central New York.
In return, the company would be allowed to lease the factory for $1 a month for 10 years.
But the deal with SUNY Poly’s Fort Schuyler Management Corp. did not require Soraa to spend any of its own money to build or equip the factory. And it contained no penalties if the company did not occupy the building or create the promised jobs. The company never even signed a lease.
So when Soraa recently said it no longer needed the factory and pulled out of the deal just as the state was completing construction of the 82,000-square-foot building, there was nothing the state could do about it.
The state was left with a factory, nearly fully equipped, but no company to use it.
One expert said using state money to custom-build a factory for a specific tenant is bad policy.
“You have a situation where the state could potentially wind up with a white elephant,” said John Bacheller, former head of policy and research for the state’s economic development office, Empire State Development. “I think it’s too much risk. When you provide a grant, the risk is limited to the amount of the grant.”
The state has found another company, but taxpayers will have to spend up to another $15 million to properly equip the building for the new company.
This time, state officials say they won’t repeat the mistake made in DeWitt again.
Empire State Development, a state economic development agency, took over the project from SUNY Poly a year ago after the college’s president, Alain Kaloyeros, was arrested on corruption charges and resigned from the university. ESD said a deal with a new tenant will include financial penalties if the company fails to meet its job commitments.
Jason Conwall, a spokesman for ESD, said the penalties, or “clawbacks,” will be included in a grant disbursement agreement with NexGen Power Systems, a California start-up. ESD’s board of directors voted Dec. 21 to approve a grant of up to $15 million to NexGen for tooling and equipment for the factory.
In return, the company has pledged to create 290 full-time, high-tech jobs for the production of semiconductors at the facility and agreed to invest $40 million of its own money into the building. It will pay rent of $1 the first year and increasing amounts up to full market value in the 10th year, ESD officials said.
Conwall said the grant will be contingent on the company meeting its job commitments. Details of the grant’s terms will not be available until the grant disbursement agreement is executed later this month, but they will follow ESD’s standard practice of requiring companies to return a grant, or portions of it, if they fail to meet hiring milestones, he said.
ESD’s agreements generally require a company to meet a certain minimum amount of their job commitments within a specified period or be required to return a grant. In some cases, a company is required to return only a portion of the money if it falls just a little short of its hiring commitments.
ESD officials said no such “clawbacks” were put into SUNY Poly’s deal with Soraa because none of the $90 million in state grants used to build the factory went directly to Soraa. All of the money went into the building, which is still owned by the state, so there was no money to take back from the company, they said.
Former state budget director Robert Megna, who was appointed president of the non-profit Fort Schuyler Management Corp. in February 2017 following Kaloyeros’s departure, said the fact that Fort Schuyler retained ownership of the building was a good thing.
“While we can’t speak to the reasoning behind all the terms of the agreement with Soraa, which were made by the previous leadership, the facility was constructed to accommodate Soraa’s gallium nitride lighting business and no funding was provided to Soraa,” he said in a statement.
“All state funds were provided to the not-for-profit Fort Schuyler Management Corporation, and the building and the equipment are all owned by FSMC on behalf of New York State,” he said. “This model enabled the state to quickly adjust to changes in a very dynamic industry and make the facility available to NexGen for its production of gallium nitride semiconductor devices, modules and systems.”
Conwall said Empire State Development takes a much different approach. It provides grants to assist companies with the cost of building facilities in the state, but it does not go the riskier route of building entire factories for them, he said.
He said ESD was fortunate to have found a new tenant to go into the DeWitt building. NexGen plans to make semiconductor power devices from gallium nitride, the same material that Soraa uses to make LED lighting. That means that NexGen can use much of the equipment already installed in the factory.
“It worked out because we owned the facility and found another tenant quickly that aligned really well,” the ESD spokesman said.
Though ESD has agreed to provide up to $15 million to NexGen for the purchase of tools and equipment, some of the $7 million not yet spent from the original $90 million in grants for the building could be used toward that $15 million commitment, he said. (The state had spent about $83 million of the $90 million on the factory and equipment by the time Soraa pulled out, officials said.)
NexGen was formed in California last year to make semiconductors for the electronics industry. It does not yet manufacture anything. The DeWitt facility will be its first manufacturing operation.
Dinesh Ramanathan, NexGen’s president and CEO and one of its founders, also was CEO of Avogy Inc., a Silicon Valley start-up that planned to make power sources for electronic devices such as computers.
Gov. Andrew Cuomo announced in 2016 that Avogy had committed to moving from California to a state-owned cleanroom facility in Rochester that the state agreed to upgrade with a $35 million investment of state money. The state never made the investment, however, and Avogy never made the move.
Avogy went out of business later in 2016. NexGen bought its technology and is starting up with new money from investors, according to Ramanathan.
NexGen has not publicly disclosed who its investors are.
Prior to Avogy, Ramanathan served as the executive vice president at Cypress Semiconductor for almost nine years, where he managed the company’s Programmable Systems Division and its Data Communications Division, according to NexGen’s website.
Prior to joining Cypress, Ramanathan held senior marketing and engineering positions at Raza Microelectronics; Raza Foundries, described as an “incubating venture capital company”; and Forte Design Systems, an electronic design automation company, according to the website.
ESD officials said they are confident that NexGen will succeed in DeWitt.
“NexGen is led by a management team and investors with a proven record and decades of combined experience building and operating high-tech businesses,” Empire State Development President, CEO and Commissioner Howard Zemsky said in a statement. “This gives us the confidence that the company will meet its commitment to bring hundreds of new, good-paying jobs to Central New York.”
The state may be fortunate in this case if NexGen is able to use the factory constructed for Soraa. But custom-built factories can be hard to sell or lease if a tenant walks away, Bacheller said.
The state should always require companies to invest more money into a project than the state does so they have a strong motivation to stick around and make the development work, he said.
“You always want the company to have skin in the game,” he said.
He said SUNY Poly may also have made a mistake constructing a factory for an LED light bulb maker, given the fact that LED light bulb production is increasingly dominated by low-cost Chinese manufacturers who have brought the price of LED bulbs almost down to that of incandescents.
“Unless you’re in a niche that the Chinese aren’t in, it’s the kind of business that is very risky,” he said.
NexGen says its semiconductor devices can be used in a wide array of applications such as LED power supplies, solar inverters, data centers and automotive applications.
The company will be getting the use of a building with up to $105 million in state money invested in it. NexGen’s capital investment will be far less by comparison – $40 million.
Bacheller said the state appears to be taking a substantial risk with NexGen, given that the company is a start-up with no manufacturing or sales track record of its own. However, he said Empire State Development may be making the best deal it could after inheriting a bad situation from SUNY Poly.
“They’ve already got a building up and they’re stuck with it,” he said.
Soraa walks away from $90M factory that NY built; $15M more brings new tenant
Black American residents of Baltimore, Maryland, are now blaming a lower police presence for the city’s soaring murder rate despite three years of Black Lives Matter (BLM) activists insisting that police be pulled from their neighborhoods.
Baltimore has now experienced higher murder rates for three years in a row after riots and BLM-sponsored protests began rocking the city after the death of Freddie Gray, a suspect who died in police custody in the spring of 2015, National Public Radio (NPR) reported.
Since the riots, police morale has collapsed, and city officials began planning a lighter police footprint in response to complaints of residents and protest leaders.
But now, black leaders are blaming cops for the spiraling murder rate, saying that the police pullback has put them in danger.
The Rev. Kinji Scott, a Baltimore activist, is blaming city hall for leaving the neighborhoods unprotected.
“We wanted the police there,” Scott insisted. “We wanted them engaged in the community. We didn’t want them beating the hell out of us, we didn’t want that.”
Scott and others are now pressuring the city to bring police back in as a deterrent to the soaring crime rate.
Despite the loud proclamations from BLM activists that the police are the problem, Scott and his fellow activists are now claiming that they never wanted police to go away.
In an interview with NPR, Scott claims only the progressive activists wanted cops to be eliminated:
No. That represented our progressives, our activists, our liberal journalists, our politicians, but it did not represent the overall community. Because we know for a fact that around the time Freddie Gray was killed, we start to see homicides increase. We had five homicides in that neighborhood while we were protesting.
What I wanted to see happen was that people would be able to trust the relationship with our police department so that they would feel more comfortable. We’d have conversations with the police about crime in their neighborhood because they would feel safer. So we wanted the police there. We wanted them engaged in the community. We didn’t want them beating the hell out of us, we didn’t want that.
Scott also blamed the city for not fostering a community atmosphere between police and the neighborhoods.
The primary thrust nationwide is what President Obama wanted to do: focus on building relationships with police departments and major cities where there had been a history of conflict. That hasn’t happened. We don’t see that. I don’t know a city—Baltimore for certain—we’ve not seen any changes in those relationships. What we have seen is that the police has distanced themselves, and the community has distanced themselves even further. So the divide has really intensified, it hasn’t decreased.
And of course we want to delineate the whole culture of bad policing that exists—nobody denies that—but as a result of this, we don’t see the level of policing we need in our community to keep the crime down in our cities that we are seeing bleed to death.
This is despite Baltimore protesters carrying signs that read things such as “disarm the police,” or wearing T-shirts promising to kill cops.
The reverend’s claims also seem to fly in the face of a list of 19 demands issued by protesters in 2015, one of which demanded that police be barred from entering certain buildings or parts of neighborhoods they had designated as “safe” from police. Clearly, the protesters wanted police removed from Baltimore’s neighborhoods. But now that they’ve gotten their wish, community leaders have suddenly realized what a bad idea such a pullback is.
The government of Berlin has decided to create women-only “safe spaces” on New Year’s Eve in order to prevent potential migrant sex attacks that have plagued New Year’s celebrations since 2015.
In order to avoid a repeat of the Cologne sex attacks, the Berlin government announced the creation of women-only spaces in the area near the Brandenburg Gate for New Year’s Eve. The “safety zone” will be, according to organisers, a space for women to go who may have been harassed or feel uncomfortable, and will be staffed by members of the Red Cross, Kronen Zeitung reports.
Hundreds of thousands of party-goers are expected to attend the celebrations in Berlin and authorities say that security will be heightened to the point where backpacks, alcohol and other items will be totally prohibited.
Last year Berlin, along with several other major German cities, saw a number of sex attacks occur on New Year’s Eve.
Event spokeswoman Anja Marx told Reuters, “We are doing this for the first time. The police requested it after they did it at the Munich Oktoberfest this year and it worked out well.” She also noted that trained psychological personnel would also be available on site.
According to Marx, the security costs for the event have reached well over 100,000 euros.
Along with an increased police presence of both uniformed and plainclothes officers, 1,400 firefighters and volunteers will be on hand to put out any potential fires caused by fireworks. Last year firefighters were forced to respond to more than 400 fires.
Other cities in Germany have also ramped up their security, like Hamburg, where police have deployed new camera technology to better identify suspects involved in crimes.
In Cologne, where in 2015 hundreds of sex attacks were reported, city officials have been criticised for handing out anti-rape wristbands as part a of a “respect” campaign to discourage further attacks.
Last year the number of attacks in Cologne greatly decreased but police were slammed by some for allegedly racially profiling North African migrants in order to tackle the problem.
Many victims from 2015 identified migrants as being behind the vast majority of the sex attacks that occurred that year.
Assessing what the report identifies as a “populist threat” as a means to defeat it and “renew the centre”, the globalist Institute for Global Change document questions widely-held assumptions that right-populist politics is an “interlude”, or blip in history which “optimistic” observers believe will burn out.
To the contrary, the Institute’s own research shows “the trend line suggests that populists will continue to gain strength in the next round of elections”, and particularly in Eastern Europe, the report noting: “Populists are strongest in Eastern Europe. They routinely out-compete the political mainstream and have already taken power in seven countries: Bosnia, Bulgaria, the Czech Republic, Hungary, Poland, Serbia, and Slovakia.”
Looking forward, the paper predicted that should the next decade see populist parties enjoying the same growth as they had in the past ten years, then nations like Germany and Sweden could too see themselves “vulnerable” to such movements.
The report comes as left-wing papers including The Guardian and New York Times mourned the “demise of Europe’s centre-left”, at the expense of the populist right, noting surging right-wing parties across the continent.
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Beyond protecting Europe’s borders, one of the areas of right-populist influence that apparently most concerned the Tony Blair Institute for Global Change authors was changes to institutions, across Europe often created or shaped in the post-war period and widely acknowledged to be totally in the hands of mainstream, politically-left management as a result of the famed “long march through the institutions”. One prominent example of such change being presently wrought by a European populist government is reform of the judiciary in conservative Poland.
A hangover of the old Communist system, the Polish government was elected on a platform of judicial reform to increase accountability in the courts, but has been relentlessly attacked by globalist institutions such as the European Commission for attempting to rebalance. Poland and Hungary are both key points of interest in the Tony Blair report, where the ruling parties of both nations are accused of emphasizing “a nationalism based on soil, blood, or culture”.
Despite the criticism, the report concedes “populist governments in Hungary and Poland are as popular as ever”.
The Justice Department’s inspector general said the department suffered from “systemic” problems regarding sexual harassment complaints over the last five years, according to a Washington Post report that peculiarly failed to mention former President Barack Obama or Attorney Generals Eric Holder and Loretta Lynch.
The DOJ requires “high level action” to solve the issue, which includes mishandling or ignoring complaints of sexual misconduct, according to the IG’s report. Over the last five years, the number of sexual misconduct allegations has increased and includes “senior Justice Department officials across the country,” according to WaPo.
Despite the issue increasing in severity during Obama’s second term, Washington Post reporter Sari Horwitz declined to mention senior administration officials, even though the “most troubling allegations” according to the IG, happened under their watch.
One woman, who was allegedly the victim of repeated groping and “sexually charged comments” became so distressed by her harasser that she “was terrified I was going to get in the elevator and he would be in there.”
On top of complete negligence in the handling of the complaint, the DOJ allowed “potential criminal assault violations,” according to the IG report. Despite these serious allegations, the IG’s office “found no evidence in the case file that a referral was made to the [Inspector General] or any other law enforcement entity.”
Theodore Atkinson, who worked in the DOJ as an attorney in the Office of Immigration Litigation under Holder according to his LinkedIn, admitted to stalking a female coworker, hacking into her personal email account and constructing a “fictitious online profile to entice her,” the IG wrote. For his behavior, Atkinson simply received a “written reprimand and reduction in title,” with no suspension or pay cut.
Atkinson was, however, recently given a “Special Commendation Award from the Civil Division.”
The WaPo investigation describes a number of other incidents that were reported but ultimately ended with no serious reprimands, including one sexual harassment case brought against a female top prosecutor in Oregon.
“Sexual harassment and misconduct is one of the very important areas we have to focus on and take seriously because of all the reasons the public is seeing now,” the IG said. “People’s attitudes have to change. Our interest is shining light on this kind of activity.”
Superficially, Lynch appeared to make gender and sexual harassment issues a top priority. In 2015, Lynch announced $2.7 million in grants to “strengthen the Justice System’s Response to Sexual Assault,” a DOJ press release stated at the time.
“The Department of Justice is committed to doing everything it can to help prevent, investigate and prosecute these horrendous crimes – including working to ensure that our greatest partners in this effort, the state and local law enforcement officers on whom we all rely, have the tools, training and resources they need to fairly and effectively address allegations of sexual assault and domestic violence,” Lynch said.
That same year, Lynch’s department issued new guidelines “to help law enforcement agencies prevent gender bias in their response to sexual assault and domestic violence, highlighting the need for clear policies, robust training and responsive accountability systems,” a press release reads.