Confluence Solar Inc., plant may go to Tenn., Mich.
St. Louis Business Journal
March 27, 2009
Confluence Solar Inc., a company started last year after landing $12.7 million in venture capital, is considering shifting its plans to build a $200 million plant in Hazelwood to another state. Michigan and Tennessee are the top contenders.
CEO Tom Cadwell said Missouri officials presented an offer in December for slightly more than $2 million in state tax credits redeemable over five years. That offer was based on the solar wafer business hiring more than 200 people, he said.
Since then development officials from outside Missouri have contacted Confluence Solar and offered help in covering site acquisition costs and building costs, Cadwell said.
Confluence Solar officials plan to view three sites in Michigan on March 30 and 31 and tour sites the following week in Clarkson and Cleveland, Tenn., according to Gerry Cahill, Confluence Solar's chief logistics and information officer. “Both of those states have told us verbally that the new equipment we need to acquire will be treated as a depreciated asset,” which will lower the taxes, he said.
When asked whether the review of other state plans was to draw a better deal from Missouri, Cahill said the new company has six venture investment partners and needs to drive its costs as low as possible.
“The programs I've seen in Missouri are well-intentioned but not very actionable,” Cadwell said. “No one here has talked about plans for brick and mortar. All we've heard about is job training.”
The possibility that Confluence might leave comes less than six months after Cadwell and other executives launched the company. Many of those executives once worked at MEMC Electronic Materials in St. Peters, and they sought to take advantage of skilled labor that has worked on similar projects for MEMC, which produces chips used in the solar electric industry. Confluence and MEMC have no relationship.
Linda Martinez, director of the Missouri Department of Economic Development, said she was surprised to hear about issues around Confluence's proposed plant, since Confluence had signed a notice of intent to receive the tax credits.
Mike Heimericks, senior project manager with the Missouri Department of Economic Development, said Missouri's Quality Jobs Program is the key program the state offers new businesses, and programs to acquire plant sites would come from St. Louis County or Hazelwood.
“We've laid everything out to them that the state Legislature offers,” Heimericks said.
Denny Coleman, president and CEO of the St. Louis County Economic Council, said his office provides information on available sites and buildings to new businesses and will offer partial tax abatement on new investment, which it has done for companies such as Pfizer, Edward Jones and Express Scripts. He declined to discuss his talks with Confluence.
Hazelwood Mayor T.R. Carr said Hazelwood could offer tax free bonds on equipment purchases, depending on the size of the project. Hazelwood is working with state officials, “and as we get more information, we'll be able to put together a competitive offer,” Carr said.
Confluence announced plans to expand in Hazelwood when it unveiled its venture capital backing in September. The company currently has a staff of 30.
Cadwell said Confluence expects the new plant to have a staff of 250 by 2011 and potentially double that by 2013. He said his initial preference was to build the plant near the company's current offices in the Park 370 office park in Hazelwood.