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New York Considers One-Year Break From Incentive Requirements For New Employers


BUFFALO, NY (WBFO) - Tesla plans to take New York State up on an opportunity to get a one-year break from financial and job creation obligations they’re held to at its Buffalo Gigafactory. A spokesperson for Empire State Development confirmed Thursday the state is considering a deferral for all companies that have job creation requirements as part of economic development packages, due to COVID-19 disruptions.

In its latest quarterly report, Tesla officials say they recorded a 32-percent revenue increase but, now with shutdowns in place as the result of COVID-19, they expect to scale back production of its automobiles by as many as half a million for the remainder of this year.
Tesla addresses its working agreement at its Buffalo Gigafactory on page 26 of its quarterly report, acknowledges the $41 million penalty it would face if it falls short of job and investment requirements, and then states it has the opportunity to seek a one-year break from those obligations due to the pandemic. The company intends to take advantage of that opportunity.

Thursday afternoon, Empire State Development confirmed it's considering temporary relief for all companies that have incentives tied to job creation.

Empire State Development spokesperson Pamm Lent sent WBFO the following written statement: “The COVID-19 pandemic and resulting shutdowns to save lives, has upended businesses across the globe and in New York State.  To help mitigate those impacts, and provide reasonable and fair accountability, we are considering delaying job creation requirements tied to economic development programs for 12 months.  This allows companies an opportunity to resume their job creation targets established before the crisis struck."

Lent also noted that the state has offered similar temporary breaks following other disasters including 9/11 and Superstorm Sandy.

She also told WBFO that Tesla did meet its latest job creation requirement in March, before New York PAUSE kicked in.

During Tesla's Wednesday evening conference call with investors, chief executive officer Elon Musk did not mention the Buffalo Gigafactory but did offer a rant on stay-at-home orders taking place throughout the country. He was especially upset over the order in California, where Tesla hosts significant operations.

"Frankly, I would call it forcibly imprisoning people in their homes, against all their constitutional rights in my opinion," said Musk, who likened the stay-at-home orders to "fascism."