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State audit: 93% of Long Island companies keep job promises

All but one -- Advanced Energy Systems --

All but one -- Advanced Energy Systems -- of the 13 local companies receiving state grants lived up to their contractual employment promises in 2015, according to a new audit. The company, seen Nov. 30, 2015, ceased operations in February 2016. Credit: James Carbone

All but one of the 13 local employers receiving state grants lived up to their contractual job promises in 2015, according to a new audit.

The business that failed to meet its job commitment, Advanced Energy Systems Inc. in Medford, ceased operations in February 2016 after a planned sale to a Virginia company fell through.

Advanced Energy, founded in 1998 by former employees of defense contractor North rop Grumman Corp., had a workforce of 21 people in 2015. That’s four fewer than it had in 2009 when the state offered a $200,000 grant in return for Advanced Energy’s promise to bring its workforce to 36 people.

The company only received $150,000 because it wasn’t able to reach the employment level necessary for the final $50,000 from Empire State Development, the state’s primary business-aid agency.

John W. Rathke, co-president and chief engineer for Advanced Energy, said last week the company had faced unfair competition from overseas rivals and lost bids for U.S. Department of Energy work in California and Michigan.

In late 2015 the company agreed to sell its assets to Best Medical International of Springfield, Virginia. When the deal didn’t go through, it was forced to close, Rathke said. He expects to complete Advanced Energy’s shutdown “within the next few weeks.”

Most of the 19 employees have since found work locally, some at Brookhaven National Laboratory, he said.

The state, under its six-year contract with Advanced Energy, could demand repayment of the $150,000 grant, but will not do so.

Empire State Development spokesman Jonah Bruno said, “Because AES fulfilled its obligations to the state for five years of a six-year agreement and qualified for the funds it received . . . and because the final-year default was caused by circumstances beyond the company’s control, ESD will not attempt to recapture any funds.”

The state audit shows that Long Island had a 93 percent compliance rate in 2015 among 13 employers receiving state grants. The Island had 100 percent compliance in 2010 through 2013.

Two companies, Bren-Tronics Inc. in Commack and Clever Devices in Woodbury, were in compliance even though their job numbers were below the target. The state allows up to a 15 percent variance without penalty, officials said.

The hiring leader locally among companies receiving state grants was Canon U.S.A., which added 462 jobs since winning state support. The Japanese imaging and copier giant, with its Americas headquarters in Melville, had a workforce of 1,572 in 2015, above the 1,360 it pledged to employ in return for a $2.6 million grant.

Together, the local aid recipients got $14.3 million in grants for pledging to employ 3,214. Their payrolls totaled 3,718 workers in 2015.

The average cost to taxpayers for each job preserved or created on Long Island was $3,848. Statewide, the average cost per job was $3,746.


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