When Guardian Industries Corp. of Michigan reviewed
sites for its $125 million expansion, one town in New York -- Geneva -- made a very
compelling case. Thanks to its status as an "Economic Development Zone,"
or EDZ, Geneva was able to provide incentives to Guardian that other sites could
not.
"What the EDZ does is make New York competitive," said Peter Walters,
group vice president for Guardian Industries. "The incentives -- especially
the tax and energy incentives -- made the Geneva site ultimately the most attractive."
Since 1987, businesses expanding in New York state have taken advantage of New
York's Economic Development Zone program, an initiative that offers substantial financial
incentives for businesses that invest and create jobs in economically distressed
areas of the state.
Now that program has been extended, both in duration and in the number of zones
available
for development.
Incentives for setting up shop in Economic Development Zones in New York state
include investment tax credits, wage tax credits, zone capital tax credits, utility
rate reduction and real property tax exemptions for eligible businesses.
The program was set to expire 10 years after the establishment of each zone, with
the first phase of zones due to expire this year. However, a bill to extend those
end dates recently passed, and EDZs now have until the year 2004 to recruit new businesses.
Also, in May of this year, the state announced the competition for up to seven
new EDZs
in the state.
Targeted areas include communities that contain a military base that has been
realigned or closed, or defense contractors that have been adversely affected by
cutbacks in defense spending. Businesses looking to these areas can take advantage
of communities that already have a highly trained work force in place.
Guardian Industries, one of the world's largest glass manufacturers, will build
their "float glass" plant on a 76-acre parcel of land in an industrial
park in Geneva. "Float glass" describes a manufacturing process that involves
floating glass on a bath of molten tin to produce a ribbon of glass. The glass made
at the plant will be shipped to other Guardian plants in Massachusetts, Quebec and
Pennsylvania to be used in the manufacture of mirrors, tempered safety glass patio
doors and windows and automotive applications. The company expects to be in production
by spring 1998.
Walters explained that the company looked at sites outside of New York because
of the state's otherwise comparatively high cost of doing business. But the EDZ program
made New York make sense.
"Without locating our plant in an EDZ, there would not have been any sites
in New York
that could compete economically," said Walters. Guardian's new 750,000 square
foot plant represents one of largest economic development projects in the state this
year.
Another company to take advantage of the EDZ program in New York is Memphis-based
Thomas & Betts.
The company purchased Augat/LRC Electronics last December for $550 million, and
New York state offered the company several incentives, including tax incentives and
reduced
utility costs from New York State Electric and Gas, to expand its facilities in Horseheads.
The company's planned $35 million consolidation and expansion of its manufacturing
operations to a single 170,000 square foot facility will create up to 300 new jobs,
and new state-of-the art equipment will allow the plant to increase productivity
and annual sales from $70 million to $200 million.
New York recycles
In a state that consumes more than 150,000 tons of waste paper a year, not to
mention
volumes of other materials such as plastic, wood and aluminum, it's not surprising
to find several expansions this year involving businesses whose raw materials come
from the
streets and landfills of New York.
Visy Corp., a subsidiary of Pratt Industries of Australia, recycles old newspaper
and low-grade paper into new cardboard. The company uses millions of pounds of discarded
paper in its $250 million plant in New York City.
Visy considered sites in New Jersey and Pennsylvania before deciding to build
its 475,000 square foot plant on a 36-acre site on Staten Island. Visy qualified
for a 25 percent energy reduction cost from Con Edison (its Business Incentive Rate),
as well as special tax incentives from New York City.
Also in New York City is Big City Forest, a three-year old company that creates
value-added, reclaimed wood products and furniture.
Whereas many wood recyclers produce wood chips and particle board, Big City Forest
takes scrap wood from crates and shipping pallets, dismantles them, pulls nails and
then actually remills the wood to design hardwood flooring, fixtures, panels, custom
millwork and furniture, not to mention new wooden pallets.
Besides diverting 135 tons of wood waste from landfills and incinerators, said
President David Muchnick, Big City Forest saves New York companies $36,000 in waste
disposal costs.
The company's facility in the Bronx is expanding from 20,000 to 60,000 square
feet, and expects a 10-fold increase in sales over the next three to four years.
State incentives and assistance for the expansion were very specialized, according
to Muchnick. Aid included research and development grants through the New York State
Office of Recycling and Development.
Upstate in Rome, EnviroReel, a plastics recycling firm, relied on the economic
development assistance of the Oneida County EDGE to locate at Griffiss Business &
Technology Park,
the former site of Griffiss Air Force Base.
EnviroReel President Val Picton, who looked at sites in Florida, Georgia and Texas
before finding a home in Rome, said he was impressed by Oneida County's willingness
to find the resources the company needed.
"You want big power, they'll give it to you," said Picton. "You
want a bigger building,
they'll give it to you."
The company recycles post-consumer plastics into several patented products including
highway crash barriers, collapsible plastic reels for cable and wire and office chair
components.
"We're putting a lot of money into this," said Picton. "You don't
want to work with a
Mickey Mouse operation."
Another recycling-industry company, BeneTech LLC, also is located at Griffiss
Business & Technology Park. BeneTech will lease about 28,250 square feet of space
to house its paper recycling production facility.
The firm charges paper companies a reduced tipping fee for paper sludge, which
is treated and converted into marketable products, such as bedding material for farmers
and commercial pet breeders and quick absorption materials for clean-up of industrial
chemical and oil spills.
Taking telecommunications further
After two years of negotiations between company executives, union members and
various community agencies and leaders, Corning Inc., the world's largest supplier
of optical fiber, will build an optical components plant this year in Erwin.
Groundbreaking for the 400,000 square foot photonic technologies plant took place
June 5, and the company expects to be in production of its photonic devices -- which
split, modify, amplify and manage the light signals that travel over high-speed optical
telecommunications networks -- by the end of this year.
Initially, the project will create 600 new jobs, with 500 to 700 more to come.
The company selected Erwin for its expansion because it is close to the company's
research and development facility, Sullivan Park.
"It's important to be close to the scientists and people working on this
project," said Paul Rogoski, manager of communications for Corning.
Also important, said Rogoski, is the proximity of the Ceramic Corridor Innovation
Center, a technology incubator whose facilities are available to high-tech firms,
as well as nearby Alfred University, which boasts a reputable ceramics and glass
program.
"Corning has been in the Southern Tier of New York for 150 years," said
Rogoski. "We're very committed to this region."
The Empire State Development Corp. provided a $3 million grant to set up a training
program for Corning employees, a $1.3 million cash grant and a $900,000 stipend to
pay for land preparation and real estate costs.
In Pearl River, another telecommunications giant, Fujitsu Network Communications,
is taking on a $122 million renovation project for a 35,000 square foot research
and development facility, called the Northeast Development Center. The project will
create 250 highly skilled engineering jobs over the next four years.
The company will work with other Fujitsu facilities to develop its network management
systems and synchronous optical network (SONET) transmission equipment, a standard
for fiber-optic transport of voice, video and data.
Fujitsu was attracted by a high concentration of engineers in the New York, New
Jersey
and southern Connecticut belt.
"Some of the best engineers in the nation live in the tri-state area,"
said Carl De Wilde, vice president of engineering. "We look forward to continuing
to draw from this pool."
Also critical to Fujitsu's expansion was Empire State Development's $100,000 skills
training grant and other tax incentives from the state.