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Boston Capital

The lessons are clear

By Steven Syre
Globe Columnist / January 14, 2011

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Here’s what passes for the good news about Governor Deval Patrick’s big bet on Evergreen Solar Inc.: Taxpayers aren’t on the hook for the full $58 million the governor promised for a factory the company intends close two years after it opened.

There’s no way to sugar-coat the decision this week by Evergreen Solar to close its heavily subsidized manufacturing plant at Devens. It’s a huge setback for the 800 people who work there. But it’s also an expensive mess for Patrick.

The governor’s $58 million commitment of grants, tax credits, and other carrots doesn’t really amount to a loss on that scale for simple reasons. The benefits weren’t all doled out and some others are retrievable.

The actual tab? Greg Bialecki, the state’s secretary of housing and economic development, says that’s impossible to pencil out yet, but he believes it will be less than half the sticker price. I don’t know either, but it’s still going to be a big number.

So the state’s Evergreen package was a big mistake, right? Bialecki would not agree.

“I don’t want to suggest we’re so stubborn about this that we’re unmindful of the fact we could learn to do things better,’’ he says. “Obviously, we’re going to take stock of what happened. But, fundamentally, does it cause us to revisit the decision? I think not.’’

I really wish they would. Looking back on the Evergreen episode, a few important lessons appear clear.

Lesson 1: Think harder about offering benefits to any individual business, especially when so many dollars are on the line.

State government has compiled a poor record of selecting companies to favor with grants and tax benefits over the years, presuming the entire point is to create jobs. The Globe’s Todd Wallack has extensively chronicled those efforts for companies large and small. The results are routinely unimpressive or worse.

There are occasional exceptions. It’s possible to create or save jobs with some company-specific benefits. Sometimes incentives from other states are worth matching. But our state’s lousy record picking business winners and losers speaks for itself.

Lesson 2: Building new industries in a state is dangerous work. The governor is a big fan of green energy and wanted to help build an industrial base around that technology in Massachusetts. The Evergreen Solar agreement was a signature event in that effort.

Perhaps the headline appeal of the deal became a bad influence on the governor. Bialecki thinks a big-bang event like the Evergreen Solar package sent a signal everywhere that Massachusetts was the place to grow green energy companies. He senses real but intangible value. I don’t sense it any more than I believe tax credits for movie productions boosts tourism, which is to say not much at all.

Lesson 3: State economic development plans should improve the local business environment and let the market decide which companies are best suited to take advantage.

Patrick has done a better job with the life sciences industry in this respect. While I choked on the governor’s original $1 billion pledge to support life sciences, a large portion of the money is dedicated to academic resources that will help produce more trained workers and spawn ideas for new companies. That’s money worth spending.

The governor made a big bet with Evergreen Solar and lost. That’s bad enough. It would be worse to miss the lessons in an expensive mistake.

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.