For sale or lease: huge solar manufacturing plant in Devens. Like new. Motivated owner.
Evergreen Solar Inc.’s decision this week to close its two-year-old solar panel factory in Devens in March raises questions about what — if anything — can fill the gaping void at the former Army base.
Several real estate professionals said it could be hard to quickly find a company to buy or rent the building, particularly given the sluggish economy and the structure’s massive dimensions — nearly a half-million square feet.
“There is pretty limited demand for anything of that size,’’ said James Umphrey, a principal with Kelleher & Sadowsky Associates Inc., a commercial real estate firm in Worcester. “I would think you would have to say it’s going to take a couple years.’’
Evergreen Solar owns the building and has a 30-year lease on the land from a quasi-state development agency.
It also won more than $58 million in public subsidies to build the facility, so the state government has a keen interest in the plant’s disposition.
It’s unclear what the company plans to do with the building. An Evergreen spokesman last night said he was still trying to track down information. And state officials said Evergreen has not told them its intentions for the plant.
But Umphrey and others said the building could be ideal for a large manufacturer looking to open a factory quickly, particularly since the building is so new.
“It’s not good news for Devens, but I wouldn’t put it in the catastrophic category,’’ said David Begelfer, chief executive of the Massachusetts chapter of the National Association of Industrial and Office Parks, a commercial real estate trade group. “The silver lining is that the right kind of company can come in at an existing facility for an attractive price.’’
Begelfer said Massachusetts has generally been successful in attracting companies to Devens since the military base closed in 1996, because it has so much space to offer and an expedited permitting system.
The sprawling 4,400-acre community now boasts more than 75 businesses that employ more than 3,500 people, including a $650 million drug manufacturing plant built by Bristol-Myers Squibb Co. (Like Evergreen, Bristol-Myers received millions in state incentives to build in Massachusetts.)
But Evergreen was one of its biggest developments, accounting for roughly one-fifth of the workers in Devens.
The Massachusetts Development Finance Agency, the quasi-state agency that oversees Devens, said it will continue to woo innovative companies.
Evergreen has struggled financially for years, racking up $685 million in losses since its founding in 1994. The company blamed low-cost suppliers from China, where the government provides clean energy firms with generous subsidies, for making the Devens plant uncompetitive in the marketplace.
Evergreen had already said it would shift a small portion of its manufacturing from Devens to China. But several state officials said they were blindsided by the decision to shutter the plant and cut 800 jobs in Massachusetts.
“The state was not aware that the company was contemplating a shutdown of the Devens plant prior to yesterday’s announcement,’’ said Robert Keough, a spokesman for the Executive Office of Energy and Environmental Affairs.
The $58 million in public subsidies included grants, tax incentives, and a discounted lease on the land, as well as $13 million to improve the roads and other infrastructure for the plant.
But state officials said the company never received all the tax breaks and will have to repay a portion of the rest of the aid. Evergreen, which had promised to create 350 jobs in Devens in exchange for the package, estimated the payback to be $3 million to $4 million.
“We think that is low,’’ said Greg Bialecki, secretary of housing and economic development, adding that the state is still finalizing its own estimate. “We’re absolutely getting back everything that we think we are entitled to.’’
The Devens plant was the centerpiece of the Patrick administration’s plan to make Massachusetts a hub of the emerging clean energy industry. But even with its closure, Bialecki said the administration does not regret putting so much support behind Evergreen.
Bialecki said the company helped attract other green firms to the state. And he expects the factory to generate significant property taxes in coming years.
“We want to learn from this experience,’’ Bialecki said. But, “it doesn’t cause us to second-guess whether the program is a good idea.’’
Todd Wallack Boston Globe January 13, 2011