A lawmaker is pushing the state to hit the brakes on signing a new tentative agreement with Tesla to operate a major state-owned factory it leases in Western New York.
Assemblymember Pat Burke, a Democrat from Buffalo, argues that the 2014 deal that former Gov. Andrew Cuomo cut with the electric automaker hasn’t panned out. He said he has concerns about the future of the company, whose CEO Elon Musk has become the face of the Trump administration’s mass cuts to the federal workforce.
“Is this who you really want to be in bed with?” Burke told the New York Public News Network. “We already lost a ton of money. Are we going to lose more money? We don't have the answer for that, but I don't know if the answer is to get into another bad deal.”
Gov. Kathy Hochul’s administration began renegotiating the state’s arrangement with Tesla last year and reached a draft agreement in January to extend the company’s lease on South Buffalo’s sprawling “gigafactory” for another five years. The agreement would also reduce the company’s total required job count.
State officials said the company remains a major employer and the draft agreement includes promises of additional investment and higher rent payments. It must still be approved by the board of Empire State Development — the state economic development authority — officials said.
Burke’s criticism is part of a growing backlash against Tesla across the state. In New York City, a candidate for comptroller is pledging to divest city pension funds from Tesla stock. Protesters have demonstrated against the Musk-led overhaul of the federal government at Tesla dealerships from Rochester to White Plains. And last week, a pair of Albany-area lawmakers introduced a bill that would effectively revoke the company’s special permit to operate its five dealerships across the state.
But the Buffalo factory is New York’s biggest tie to Tesla, and members of both parties have long panned the facility as a boondoggle. At Cuomo’s direction, the state spent almost $1 billion to build and equip the facility before it opened in 2016.
The site wasn’t originally planned as a factory for Tesla. Cuomo envisioned a plant that would make solar panels and originally partnered with a company called Silevo. That firm was absorbed by SolarCity, which Tesla acquired in 2016.
The company initially promised to create 3,460 jobs across the state, including 1,460 “high tech” manufacturing jobs at the Buffalo plant. The state subsequently amended the job commitment requirements several times, reducing the overall job count and loosening the definition of which jobs qualify.
The company employed 2,883 people in New York at the end of last year, according to a letter filed with state officials. Burke and other legislators said they’ve been disappointed with those numbers.
Many of the jobs include data entry work that is less desirable than the “high tech” manufacturing jobs that were initially promised, according to state Sen. Sean Ryan.
“It’s a big white elephant. It’s become Buffalo’s version of the Springfield monorail,” said Ryan, a candidate for Buffalo mayor, referencing a "Simpsons" episode that satirized municipal infrastructure decisions.
Though he said he’s frustrated by the situation, Ryan said he didn’t feel there was any better option than amending the agreement with Tesla.
“Moving forward doesn’t cost us any money,” he said. “That’s the only move we have.”
Others are more skeptical. Dan Vicente, a regional director of the United Auto Workers, said Tesla was a bad employer led by a bad CEO, and New York officials should do everything in their power to wring more concessions.
“If you want us to give you subsidies, what are we going to get out of you in return?” Vicente said.
“We're subsidizing Tesla — the company that the CEO is actively attacking our democracy,” he continued. “Governor Hochul, I believe, sees herself as a future leader of the Democratic Party. If that's how you want to see yourself, take bold action, take bold steps and be a true leader.”
In a letter to state officials in February, Tesla executive Jeffrey Munson said the company employed more than 2,000 people making chargers in the Buffalo area and has invested a cumulative total of $2.89 billion in the state.
“This past year has been another excellent year for Tesla in Buffalo and throughout the state,” wrote Munson, the company’s director of treasury and capital markets. “Tesla remains committed to making Gigafactory New York a world-class advanced manufacturing center.”
Tesla did not respond to emails requesting comment.
Cuomo planted the seeds of the Buffalo facility during his first term as governor by tapping a researcher named Alain Kaloyeros to develop factories across upstate New York. Building on an existing model for semiconductor research, the factories would be owned by a state-backed non-profit and then leased to private companies. The Buffalo plant was the biggest investment.
Wielding a gleaming shovel, the governor broke ground in 2014.
Both liberal and conservative analysts criticized the administration’s approach. Cuomo argued that the state’s investment was protected since it owned the facilities. Critics said that meant the state was making up-front bets in emerging industry sectors.
“It's very risky for New York State government to put out billions in tax money for subsidizing high-tech manufacturing,” said John Kaehny of the watchdog Reinvent Albany.
But Cuomo and his aides said the massive investment helped jump-start the economy in Buffalo. Rich Azzopardi, who was Cuomo’s spokesperson in Albany and now works for his mayoral campaign, shrugged off the attacks.
“This particular project turned a radioactive brownfield into a plant that has employed thousands of people in what has been one of the hardest hit economic regions of New York for years,” Azzopardi said in a statement.
Under the terms of the Cuomo administration’s deal, Tesla pays a single dollar in annual rent but is required to meet minimum figures for employment and investment. The company faces fines of $41.2 million a year if it falls short.
Empire State Development took the lead in overseeing the facility after Kaloyeros resigned amid a 2016 bid-rigging scandal related to the Buffalo factory. Prosecutors said Kaloyeros conspired with several construction executives to steer them the contract to build the facility. The men were found guilty at trial, but the U.S. Supreme Court later overturned their convictions.
In 2018, state officials lowered the plant's estimated value by $884 million. In 2021, officials agreed to delay one of Tesla’s job deadlines in the wake of the COVID-19 pandemic. Last year, the state opened negotiations with the company amid reports of layoffs at the plant, according to Kevin Younis, ESD’s chief operating officer.
The result was a draft agreement that would extend Tesla’s lease until 2034 and immediately raise its rent to $2 million a year. The company’s statewide employment requirement would be reduced to 3,000, but the number of jobs required in Buffalo would increase to 1,800 from 1,460, ESD said.
Younis said Tesla is one of the largest for-profit employers in Buffalo and the state’s commitment to the factory predates Musk’s involvement with the plant.
“Put aside what happened in the past and our efforts to sort of continue to right that ship. Right now, we have an asset that we need to make the most out of,” Younis said. “We are getting a substantially enhanced commitment from them without additional state resources.”