BUFFALO, N.Y. (WBEN) - Tesla is looking for a one-year deferral from New York State in order to avoid a $41 million penalty related to job creation numbers at its Gigafactory in South Buffalo.
In documents available on the Securities and Exchange Commission on Thursday morning, the company said that they are looking for the one-year deferral after state officials issued a guidance that all obligations related to investment and employment targets are eligible for it.
Tesla announced in February that they passed their quota of 1,460 jobs that they had to reach by April 1 in order to avoid the penalty to New York State. However, the coronavirus pandemic forced the plant to shut down on March 19.
"We intend to apply for and expect to be granted such deferral," Tesla said. "Moreover, as we had exceeded our investment and employment obligations under this agreement prior to such mandated reduction of operations, we do not currently expect any issues meeting all applicable future obligations under this agreement. However, if our expectations as to the costs and timelines of our investment and operations at Buffalo or our production ramp of the Solar Roof prove incorrect, we may incur additional expenses or substantial payments to the SUNY Foundation.
The $950 million facility has been criticized for years for its use of taxpayer dollars to build the plant, a lack of transparency over its operations and job numbers, and also an illegal bid-rigging scheme that resulted in members of the Cuomo administration going to prison.
Tesla said they are building solar roofs and other solar related products there. They are also creating energy storage components, and Supercharger components.
State Assemblyman Sean Ryan discussed the extension request.
"It's predictable based on the fact that they've been out of production now for at least six weeks," he said. "I think it's reasonable for them to ask for an exemption on hitting the top target job number of nearly 15,000, but we need to agree to a number that they're going to hit."