State out $16 million as Schott closes

ALBUQUERQUE (KRQE) - The closure of Schott Solar left 250 people out of work, and it also left the state out of $16 million, money taxpayers won't be getting back.

A spokeswoman for the state Office of Economic Development says that's because the previous administration under Gov. Bill Richardson didn't negotiate clawbacks in its incentive deal with Schott.

Clawback provisions in contracts tie incentives to a company's performance allowing a state, county or city to reclaim some of its money if the business fails. The city of Albuquerque and Bernalillo County did have those clauses in their contracts and will recoup some of the incentive dollars given to Schott.

The Albuquerque agreement with Schott divvied up $1 million dollars, mostly for infrastructure like road improvements with $182,000 reducing building and permitting fees.

City Economic Development Director John Garcia said the city can't get back those fees but can get back about 25 percent of the balance.

And the city still has the infrastructure improvements, which Garcia said is a plus.

The Schott agreement with Bernalillo County was based more on the number of jobs created.

The county would provide $500,000 for construction and equipment, and Schott would generate 400 jobs over five years. Schott never employed 400 people or reached five years, so the county is now calculating how much of its incentive will be reimbursed.

Garcia says during Schott's 3 1/2 years here the company paid out $20 million in payroll and nearly $10 million for goods and services. So the city and state did recoup some of its money in tax revenue, he said.