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Solar Company Rejects Ontario, Oh.; Mayor: “We Dodged A Bullet”
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The Mansfield area has been hit hard by the loss of manufacturing jobs, but last summer a green energy company provided some hope. But the solar energy company ended up taking its operation and jobs someplace else. But as WOSU reports, the rejection might have been a blessing in disguise.
About 6,200 people live in Ontario, Ohio, just outside of Mansfield. For more than two generations General Motors was the city’s big employer. GM also provided an abundant and steady stream of tax revenue.
But almost two years ago it closed the stamping plant. People were forced to move or take a buyout.
The city’s budget was nearly cut in half.
So naturally Mayor Larry Collins was thrilled when Calisolar, a company that makes silicon for solar cells, called about the abandoned GM plant. Here’s Collins last June.
“Just going to be a boon not only, like I say, for Ontario, but for Richland County and areas beyond,” he said.
The state of Ohio offered Calisolar an incentive package worth about a $100 million. And the U.S. Department of Energy guaranteed them a $275 million loan.
“Everything was in place,” Collins said.
But July First Calisolar called.
“Somehow they decided to go somewhere else,” the mayor said.
Mississippi…to build a plant there, creating 1,000 construction jobs and generating nearly a $43 million annual payroll.
Although the GM plant remains empty, Collins says he thinks Ontario is better off without Calisolar.
“Knowing now, as I said, what we know now. Yes, it would’ve been. We would’ve been built up and dropped out,” Collins laughed.
That’s because Calisolar has money problems.
The company, since November, has laid off 114 employees at its Califorinia facilities. And multiple media outlets report as many as three of the company’s projects have stalled.
Mike Brandl, a finance professor at Ohio State University, agrees Ontario “dodged a bullet.”
“What often times happens is you get some of these firms that go community shopping. So they’ll go from one community to the next to the next, and try to work out the best tax break deal that they can get. The problem with it is often times these firms need these tax breaks just to stay in business. And it’s usually a sign there’s something fundamentally wrong with the firm,” Brandl said.
And he Brandl said what happened in Ontario is not that unusual, especially in the Midwest. Racine, Wisconsin is one city that was not so fortunate.
“They had a lot of manufacturing firms that took it on the chin and laid people off and went out of business. And they just went and they spent millions upon millions of taxpayer dollars to try to attract new firms. So these firms would come in, be there for maybe a year or so and then go bankrupt, and they’d do it all over again,” he said.
The Mississippi Development Authority says the Calisolar project is still on. Mississippi did not offer Calisolar a better incentive package than Ohio. But the $600 million project is in a right-to-work state where organized labor is not strong. And Brandl said it’s another good sign that Ontario avoided potential issues.
“A lot of firms, their biggest expense are labor costs. So they think that just by driving down labor costs and getting subsidies from the government that that’s going to be key to their economic success,” Brandl said.
Calisolar did not respond to our requests for an interview.
Ontario Mayor Larry Collins still has hope of filling the old GM plant. He says they have a couple of other companies looking at it.