Your Tax Dollars At Work

by Andrew Stiles

Bloomberg reports on the lavish new facility that failed solar-panel company Solyndra built shortly after the Obama administration awarded it a $535 million taxpayer-guaranteed loan:

The glass-and-metal building that Solyndra LLC began erecting alongside Interstate 880 in Fremont, California, in September 2009 was something the Silicon Valley area hadn’t seen in years: a new factory.

It wasn’t just any factory. When it was completed at an estimated cost of $733 million, including proceeds from a $535 million U.S. loan guarantee, it covered 300,000 square feet, the equivalent of five football fields. It had robots that whistled Disney tunes, spa-like showers with liquid-crystal displays of the water temperature, and glass-walled conference rooms.

“The new building is like the Taj Mahal,” John Pierce, 54, a San Jose resident who worked as a facilities manager at Solyndra, said in an interview.

The building, designed to make far more solar panels than Solyndra got orders for, is now shuttered, and U.S. taxpayers may be stuck with it. Solyndra filed for bankruptcy protection on Sept. 6, leaving in its wake investigations by Congress and the Federal Bureau of Investigation and a Republican-fueled political embarrassment for the Obama administration, which issued the loan guarantee. About 1,100 workers lost their jobs.

Democrats like to complain that taxpayer financing of speculative “green” ventures like Solyndra is necessary to compete with China’s massively subsidized solar industry. In truth, even the Chinese consider the “thin film” solar-panel technology in which Solyndra specialized (much less the Disney robots and shower crystals) as too risky an investment.

More:

“They were anticipating large production,” Juancho Suntay, 51, a former Solyndra equipment maintenance technician, said in an interview. “That’s why they wanted to have a state- of-the-art factory.”

The plant features 19 loading docks, four electric car charging stations in the parking lot and landscaping of wild grass and a rock garden. An automated rail system moved parts through the assembly process.

Robots that resembled “a big freezer with wheels” maneuvered around the factory transporting panels from one machine to another, said George Garma, 49, a former Solyndra equipment maintenance technician from Fremont. The Disney tunes alerted workers to the robots’ presence.

As it turns out, local commercial real-estate agents had wondered why Solyndra needed to build an entirely new facility (in Silicon Valley of all places!) to begin with:

“There hasn’t been a factory or warehouse building built in Silicon Valley in well over 10 years,” Jeff Fredericks, managing partner at Colliers International in San Jose, said in an e-mail.

The asking rate for industrial properties in Silicon Valley is the fourth-most expensive in the U.S., according to Jack DePuy, Bay Area research manager at CB Richard Ellis in Foster City, California…

About 11.4 percent, or 950,801 square feet, of industrial space was vacant in Fremont in September 2009, according to data from Colliers.

“There was available space that we talked about with them,” Bob Wasserman, Fremont’s mayor, said in an interview. “It was their decision that they needed a new building. Was that a good decision? It didn’t turn out to be.”

It sure didn’t, which is why Rep. Brian Bilbray (R., Calif.) grilled White House officials on this very issue at a recent hearing of the House Energy and Commerce Subcommittee on Oversight and Investigations. I spoke with him here:

As a native Californian, Bilbray knows a thing or two about Solyndra’s backyard — in particular, the subpar business climate (12 percent unemployment) and onerous regulatory regime in which the company proposed to build a brand-new manufacturing facility, paid for by a $535 million taxpayer-guaranteed loan. Bilbray expounds on the litany of reasons why the decision was ill-advised. For one, electricity costs in California, at 22 cents per kilowatt-hour, are twice as high as in Midwestern states like Ohio, and nearly four times as expensive as in China.

On top of that, California has some of the strictest state and local regulatory regimes in the country in regard to air quality, water quality, storm runoff, occupational safety, hazardous-waste generation, and so on. Regardless, Solyndra proposed to build on 30 acres of virgin farmland in Fremont, Calif. (in the Bay area), on a site that was classified by the EPA as a “non-attainment zone,” meaning that air quality did not meet certain federal standards. That would require Solyndra to present and enact a plan to meet those standards or risk losing some forms of federal assistance…

Bilbray suspects that costs weren’t taken into account in this case because, as far as the administration was concerned, cost wasn’t an issue. “Part of the reason it was chosen was as more stimulus,” he says. “Which means we don’t worry about the cost-effectiveness. Throwing money at the economic crisis is an answer in itself. The taxpayer should be really nervous about that.”