Prospects dimming for MAGE Solar in Dublin

ATLANTA -- “Project Megan” was supposed to mean 350 new jobs for Laurens County -- in a factory worth $30 million -- by the end of this year.

When Project Megan was inked in 2010, Laurens County and the city of Dublin dropped the code name and announced they had lured German manufacturer MAGE Solar to town. Then-Gov. Sonny Perdue said he expected the solar panel factory to be successful for years to come. The city, county and state rolled out tax breaks and other lures.

Even Dublin High School got solar fever, and the city school board borrowed $3.5 million in 2013 for a solar project that officials calculated would pay back their investment over the life of the panels.

But the factory fizzled, and the state now has its eye on a $1.25 million enticement grant it made to the company, on the promise of those jobs and $30 million in private investments.

MAGE topped out at about 54 employees and $2.5 million in Dublin investments, according to the annual reports on the project from the city of Dublin as well as the County of Laurens Development Authority.

But it’s not clear if MAGE will ever return to manufacturing in that building, said Susanne Quinn, a spokeswoman for Strathcona Energy Group, part of a company that bought a portion of MAGE’s assets in Dublin.

“At this point, I don’t know, I cannot say. ... There are a lot of moving parts right now,” Quinn said.

She said Georgia seems to be “embracing” solar, which would bode well for domestic manufacturing.

On the other hand, MAGE found the U.S. commercial environment very different than back home in Germany.

The solar market in the United States “is not subsidized, not incentivized like it is in Germany,” Quinn said.

Yet while Georgia does not underwrite solar projects for the sake of solar projects, it does give incentives for manufacturing in general, including that $1.25 million granted to MAGE.

“We’re keeping tabs on it,” said Joanie Perry, director of the community finance division of the Georgia Department of Community Affairs. Her agency works with the OneGeorgia Authority, which made the grant.

The state generally provides a handful of such grants targeted at rural development each year, depending on what the state Legislature puts in OneGeorgia’s budget. In 2012, OneGeorgia spent some $31 million among 14 grantees. In 2013, it spent $17.4 million among nine awards. In 2014, OneGeorgia spent $8.6 million among eight projects.

MAGE spent its grant money on hardware and machines for the factory, bought from a company in Massachusetts.

The grants do have what’s called a “clawback” clause: If the company makes promises it doesn’t keep, the state chases down the money. Indeed, the grant counts as a debt on the company’s books unless it fulfills the promise in time.

“We may have one a year or so” that does not meet its promises, Perry said.

The last three years of clawbacks amount to less than $150,000, and Perry said she’s not aware of ever having a clawback they couldn’t eventually collect.

Come December, if Georgia needs to go after a clawback, it has a formula that weighs the jobs and spending that actually took place to calculate what percent of the grant it will try to recover.

Dublin and Laurens County also did what they could to woo MAGE.

Brad Lofton runs the city of Dublin and County of Laurens Development Authority. The authority owns the building MAGE occupies and bought it at a cut rate, he said.

Property-wise, it was still a good buy for the authority, he said. And the updates they did for MAGE gratis only make it more valuable, he said.

MAGE also got a partial property and sales tax break under a common type of bond that lets the authority lend its tax-exempt status to the company.

The authority even promised MAGE 18 months’ use of an “executive level house” and the initiation fees for three memberships to the Dublin Country Club.

But the local deals have a clawback formula, too.

“Local taxpayers aren’t out anything,” Lofton said.

The authority and the state are looking for another way out: a new tenant for the Dublin building that could take over the lease, the equipment and maybe even the OneGeorgia grant.

Lofton said they “expect to see someone in there soon.”

This story was originally published March 31, 2015 at 6:16 PM with the headline "Prospects dimming for MAGE Solar in Dublin."