Apr 8
2025
Tesla spends taxpayer ‘slush fund’ on new cafeteria
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When Tesla employees show up to work nowadays in South Buffalo, a cafeteria serving breakfast, lunch and dinner — along with snacks and coffee — awaits.
But there’s no such thing as a free lunch: Tesla employees must pay for the meals, which include salads, pasta, pizza and sandwiches.
The other catch? New York State taxpayers have footed the bill for the eatery, which cost $1.6 million to build.
Records obtained by Investigative Post show the electric vehicle maker continues to spend taxpayer dollars each year on the factory, which the state spent $959 million to build and equip.
The funds come from a pot of state money that totaled $28.9 million in 2020. According to an amendment to Tesla’s lease with the state — called Amendment 11 — the money was left over from the grant New York issued to build the South Buffalo plant. Amendment 11 to the lease agreement allowed Tesla to spend the leftover money instead of it going back into the state budget.
Investigative Post first revealed the existence of the fund in 2023.
As of February, Tesla has spent more than $3 million on new equipment and improvements to the publicly-owned factory on South Park Avenue. Purchases have included a new hot water boiler, new rotary screw compressors, a parking lot expansion and the new cafeteria.
The spending has proven controversial. For one, critics say, New York agreed to lease the factory to Tesla so it could produce solar energy products — such as Tesla’s Solar Roof. Today, the factory primarily produces car charging stations, refurbishes electric car batteries and houses data entry workers updating Tesla’s self-driving software.
“The slush fund … is just the additional salt in the wound for the taxpayer who is subsidizing, basically, Tesla automotive,” said John Kaehny, executive director of the good government group Reinvent Albany. “That’s nonsense.”
Donate to support our nonprofit newsroomThe spending also comes as Tesla CEO Elon Musk oversees a gutting of the federal budget — cuts that could lead to less money flowing to state and local governments, universities and hospitals.
It also comes as Buffalo is struggles to balance its own budget, leading one mayoral candidate to call on the state to distribute the funds to the city instead.
There’s about $25.8 million left in the fund today.
A spokesperson for Empire State Development — a party to Tesla’s lease of the factory — said the state has allowed the company to use the funds as part of an agreement to keep the facility up-to-date.
“Tesla agreed to make upgrades, to improve the facility, which the state owns, and facilitate the mission of creating more jobs,” Pamm Lent said in a statement. “The funding allocated to the Gigafactory ensures that the facility is well maintained, and all necessary repairs are kept up to date.”
New York State Sen. Sean Ryan
Lent said the cafeteria “improves the facility and is comparable to what other major employers provide for their employees.”
At a Friday press conference outside of the Tesla factory, state Sen. Sean Ryan — who is running for mayor — called on Gov. Kathy Hochul and Empire State Development to spend the “unused funds” on Buffalo instead of Tesla.
“We paid to build it, we paid for the equipment that goes inside,” Ryan told reporters. “We should be taking a hard look and we should be working to find ways to recover at least some of that cost from the Tesla corporation.”
In a statement Monday, a Hochul spokesperson didn’t dismiss the idea.
“Governor Hochul understands that the success of the City of Buffalo is crucial to the success of the entire Western New York region,” Matt Janiszewski, Hochul’s upstate press secretary, said. “Our Administration will continue working with our partners in local government to ensure that State resources are going where they are most needed.”
Compressors, boilers and a place to eat
Lent told Investigative Post that most of Tesla’s spending so far has been competitively bid.
That was the case for the company’s contract with Turner Construction for the cafeteria and Ingersoll Rand for the rotary screw compressors. The contract for the new hot water boiler was sole-source, Lent said, and Tesla used the same supplier as it did for other boilers in the factory.
Records show Tesla spent $629,000 with Ingersoll Rand and $1.62 million so far with Turner Construction.
Additional spending included $415,000 on the hot water boiler and $390,000 on the new parking lot. Records indicate that Tesla itself constructed and paved the lot.
The total so far: $3,049,000.
According to the cafeteria’s website, the eatery is managed by food service giant Aramark. An Aramark representative did not return a request for comment.
A Tesla representative similarly did not respond to a request for comment. In the company’s latest report to the state, however, Tesla provided the cafeteria as evidence it “continues to invest in our employees’ needs.”
Tesla Buffalo Café menu.
Monday’s lunch menu included a meal of fried chicken, mashed potatoes, steamed corn and a buttermilk biscuit.
That’s in addition to offerings of hot sandwiches (cheeseburgers, stromboli and Buffalo chicken sandwiches), cold sandwiches (roast beef and cheddar, Italian sub and turkey BLT), a pizza station, a salad bar and two soups (chicken noodle and minestrone).
For Kaehny, Tesla spending the money on a cafeteria isn’t offensive on its own. He said it becomes problematic when considering that Musk pledged to manufacture Solar Roof tiles in Buffalo, an enterprise that is today just a fraction of the facility’s output.
“It has switched from being a manufacturing facility,” Kaehny said. “Now it’s about maintaining Tesla automotive and that’s it. So how the hell do you justify … the state having to pay out the remaining $29 million?”
Recapturing the funds
Empire State Development, according to Lent, is in the final stages of re-upping its lease with Tesla for another decade.
Ryan on Friday said the lease negotiations are the perfect opportunity for the state to recapture the Amendment 11 funds and require Tesla to pay rent for use of the factory.
According to a draft of the lease Investigative Post obtained last year, New York would charge $2 million in rent per year through 2029 and $5 million annually through 2034.
Ryan said the rent should be based on what Tesla would pay in property taxes if it owned the building. He said that would be around $5 million per year. One million of that total should go to the state for upkeep and maintenance of the building, Ryan said. The rest should flow into city coffers.
“That lease extension is an opportunity to hold Tesla accountable,” Ryan said. “After all, Buffalo provides all the services Tesla needs to do business here. Think: police, fire, water, sewer.”
The Amendment 11 funds, he said, were originally set aside to cover any incidental costs that may have arisen after construction finished. But those costs never came, he said, meaning the state should reallocate the money. Specifically, it should send the money to Buffalo.
The city currently faces a budget deficit of more than $50 million, according to Acting Mayor Chris Scanlon.
“The money’s there, why not use it that way?” Ryan said. “My bigger concern is that this money will not be recaptured and will all go to Elon Musk and Tesla instead.”
