Going into 2017 without updating an incentive package on your $200 million yogurt plant? A little more costly.
Local officials expect they will soon see what Dairy Farmers of America has planned for the $200 million facility built in 2013 and then shuttered in 2015 by Mueller Quaker Dairy. A big reason why is that the financial package adapted from the Mueller Quaker PILOT only provides a tax abatement for the Batavia City School’s 2016-17 assessment.
DFA, who purchased the Greek yogurt plant in January, has until the end of the year to present a new project for the Genesee Valley Agri-Business Park facility — one that would likely receive a new set of financial inducements from the county’s economic development arm — to avoid paying a full tax assessment to the town of Batavia and Genesee County in 2017.
According to Real Property Tax Services Director Kevin Andrews, Batavia Dairy Products LLC — the corporation formed by DFA for the Batavia project — is set to pay a PILOT payment equal to half of their full-assessment on the coming school taxes. While the current agreement runs through 2023, the benefits stop there.
Everything beyond the coming school year is set to be taxed at a 100 percent payment, Andrews said. At just under $18 million in assessed value, that would add up quickly.
GCEDC President Steve Hyde he expects his board to see a DFA proposal, and a new tax plan, before the new year. The current deal was intended to get a project on the table in 2016.
“It was designed as a straddled pilot,” Hyde said. “Through interacting with the company, they said they have lots of options for what will be produced there long-term. Straddling gives them a few months to plan strategically how to put this plant back into (action). It was thoughtful that a year is enough time. If they don’t make a decision on an investment in job creation, it reverts back to tax rolls.”
No proposal has been received by the GCEDC board, holding its next meeting Aug. 4, with four more meetings planned before the first anniversary of Mueller’s closure.
The failure of Batavia yogurt plant, part of a boom industry that includes Alpina’s Batavia plant, was cited this week by a New York Times report critical of the state’s economic development policies and programs like the Exelsior, which were readily handed out for a project that didn’t deliver on lofty prospects.
County Manager Jay Gsell, quoted in the Times’ report, expressed optimism Tuesday in Dairy Farmers of America’s eventual plans compared to the model that PepsiCo and Theo Mueller Gmbh gave up at the end of the year.
Citing their status as a nationwide milk cooperative with local farm partners and a stake in the recently expanded O-AT-KA Milk facility, Gsell feels a sense of trust in the new owner and their market.
“We have a tremendous milkshed here, and while the (milk) prices have not been good for dairy farmers, they are for the industry,” Gsell said. “Getting this facility back on line is a benefit for the (local farms) and will be an enhancement of the industry.”
DFA reported in March that it directed the marketing of 62 billion pounds of milk in 2015, with net sales of $13.8 billion and a net income of $94.1 million despite the average hundredweight price of milk dropping $7 from 2014.
In a statement, Dairy Farmers of America said they see the acquisition as a strategic one that is still being evaluated for a variety of dairy-related handling and manufacturing uses.
“DFA is currently evaluating potential future uses for the dairy manufacturing facility and will share details regarding the future of the plant, once it’s been determined,” the company said.
According to the county’s Real Property Assessment Office, Batavia Dairy Products LLC purchased the Mueller Quaker plant for $60 million dollars, with $20 million for equipment for the site, in January.
Signage at the site has changed over to the DFA logos, and equipment remains on-site, but the jobs lost are not yet found inside.
Gsell hopes DFA will be able to go beyond what Mueller Quaker promised and what it achieved in employment. He expects DFA to not be reliant on a single product, like the Greek yogurt produced there before, with the plant offering more versatility of an O-AT-KA Milk.
“It’s a USDA-approved milk facility … and these are smart business people that know what they are doing in making and having a long-term plan,” Gsell said.
Hyde anticipates seeing additional construction in the eventual project.
“We’ve heard pretty clearly that it’s not yogurt,” as the focus, Hyde said, “so there will be a period to redevelop the site and facility, including some additions and construction to optimize production and new equipment.”
That the Ag Park and Batavia were highlighted as what’s gone wrong with an oft-touted economic push under Gov. Andrew Cuomo was a body blow to Hyde and others who feel ownership of a site developed to bring in large agri-business projects.
“Stepping back, it’s definitely a disappointment with Pepsi and Mueller,” Hydge said. “We can’t control that, we created an environment that’s attractive, but can’t guarantee they’ll succeed … the reality is, had we not built the Ag Park, we wouldn’t have this big plant, one of the largest USDA-approved plants in the northeast, and that plant is now going to move back into productive use with DFA.”
“We got a productive dairy asset, that in the long-term will employ a lot of people and contribute positively to the community,” Hyde said. “If we hadn’t (invested) it would still be a pumpkin farm.”
Local officials expect they will soon see what Dairy Farmers of America has planned for the $200 million facility built in 2013 and then shuttered in 2015 by Mueller Quaker Dairy. A big reason why is that the financial package adapted from the Mueller Quaker PILOT only provides a tax abatement for the Batavia City School’s 2016-17 assessment.
DFA, who purchased the Greek yogurt plant in January, has until the end of the year to present a new project for the Genesee Valley Agri-Business Park facility — one that would likely receive a new set of financial inducements from the county’s economic development arm — to avoid paying a full tax assessment to the town of Batavia and Genesee County in 2017.
According to Real Property Tax Services Director Kevin Andrews, Batavia Dairy Products LLC — the corporation formed by DFA for the Batavia project — is set to pay a PILOT payment equal to half of their full-assessment on the coming school taxes. While the current agreement runs through 2023, the benefits stop there.
Everything beyond the coming school year is set to be taxed at a 100 percent payment, Andrews said. At just under $18 million in assessed value, that would add up quickly.
GCEDC President Steve Hyde he expects his board to see a DFA proposal, and a new tax plan, before the new year. The current deal was intended to get a project on the table in 2016.
“It was designed as a straddled pilot,” Hyde said. “Through interacting with the company, they said they have lots of options for what will be produced there long-term. Straddling gives them a few months to plan strategically how to put this plant back into (action). It was thoughtful that a year is enough time. If they don’t make a decision on an investment in job creation, it reverts back to tax rolls.”
No proposal has been received by the GCEDC board, holding its next meeting Aug. 4, with four more meetings planned before the first anniversary of Mueller’s closure.
The failure of Batavia yogurt plant, part of a boom industry that includes Alpina’s Batavia plant, was cited this week by a New York Times report critical of the state’s economic development policies and programs like the Exelsior, which were readily handed out for a project that didn’t deliver on lofty prospects.
County Manager Jay Gsell, quoted in the Times’ report, expressed optimism Tuesday in Dairy Farmers of America’s eventual plans compared to the model that PepsiCo and Theo Mueller Gmbh gave up at the end of the year.
Citing their status as a nationwide milk cooperative with local farm partners and a stake in the recently expanded O-AT-KA Milk facility, Gsell feels a sense of trust in the new owner and their market.
“We have a tremendous milkshed here, and while the (milk) prices have not been good for dairy farmers, they are for the industry,” Gsell said. “Getting this facility back on line is a benefit for the (local farms) and will be an enhancement of the industry.”
DFA reported in March that it directed the marketing of 62 billion pounds of milk in 2015, with net sales of $13.8 billion and a net income of $94.1 million despite the average hundredweight price of milk dropping $7 from 2014.
In a statement, Dairy Farmers of America said they see the acquisition as a strategic one that is still being evaluated for a variety of dairy-related handling and manufacturing uses.
“DFA is currently evaluating potential future uses for the dairy manufacturing facility and will share details regarding the future of the plant, once it’s been determined,” the company said.
According to the county’s Real Property Assessment Office, Batavia Dairy Products LLC purchased the Mueller Quaker plant for $60 million dollars, with $20 million for equipment for the site, in January.
Signage at the site has changed over to the DFA logos, and equipment remains on-site, but the jobs lost are not yet found inside.
Gsell hopes DFA will be able to go beyond what Mueller Quaker promised and what it achieved in employment. He expects DFA to not be reliant on a single product, like the Greek yogurt produced there before, with the plant offering more versatility of an O-AT-KA Milk.
“It’s a USDA-approved milk facility … and these are smart business people that know what they are doing in making and having a long-term plan,” Gsell said.
Hyde anticipates seeing additional construction in the eventual project.
“We’ve heard pretty clearly that it’s not yogurt,” as the focus, Hyde said, “so there will be a period to redevelop the site and facility, including some additions and construction to optimize production and new equipment.”
That the Ag Park and Batavia were highlighted as what’s gone wrong with an oft-touted economic push under Gov. Andrew Cuomo was a body blow to Hyde and others who feel ownership of a site developed to bring in large agri-business projects.
“Stepping back, it’s definitely a disappointment with Pepsi and Mueller,” Hydge said. “We can’t control that, we created an environment that’s attractive, but can’t guarantee they’ll succeed … the reality is, had we not built the Ag Park, we wouldn’t have this big plant, one of the largest USDA-approved plants in the northeast, and that plant is now going to move back into productive use with DFA.”
“We got a productive dairy asset, that in the long-term will employ a lot of people and contribute positively to the community,” Hyde said. “If we hadn’t (invested) it would still be a pumpkin farm.”
Source: TheDailyNews
Link: http://www.thedailynewsonline.com/bdn01/plans-for-yogurt-plant-expected-soon-20160727
