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Company offered $1.3 million in tax savings to come to Medina

By Tom Rivers, Editor Posted 27 March 2015 at 12:00 am

ALBION – The Orleans Economic Development Agency approved a plan today that would save a Canadian company $1 million in property taxes over 20 years.

The agency is offering an aggressive tax incentive proposal to try to sway Pride Pak Canada Ltd. to move into the former BernzOmatic property. Pride Pak officials are weighing other sites in Western New York and Pennsylvania for a new vegetable processing, packaging and distribution facility.

The site in Medina was vacated last year by Worthington Cylinders. The site is a 180,000-square-foot facility at 1 BernzOmatic Drive.

In addition to a discount on property taxes, Pride Pak would receive a sales tax exemption for equipment and building materials, an estimated savings of $280,000.

The total benefits – sales tax and property taxes – are calculated at $1,273,014. The EDA projected the company would spend $136,890,650 in Orleans County over 20 years. That translates into $107.50 spent in Orleans for every $1 given back as an incentive.

If the company chooses Orleans for the project, it is expected to hire 80 people the first year, then be up to 136 in year 2, and 206 after three years. The positions are expected to pay an average of $27,500 after the first year, $28,000 the second year, and $28,500 after the third year.

Pride Pak would buy some local produce, and package it to be distributed to grocery stores. The company wants to expand its operations from Canada and better serve a large northeastern US grocery chain, Orleans EDA officials said.

“It’s perfect for Orleans County,” said Jim Whipple, the Orleans EDA chief executive officer.

The EDA has worked to finalize the PILOT (payment in lieu of taxes) plan to eliminate that uncertainty in its taxes for the company.

Generally, the EDA and local governments approve 10-year tax-savings deals for companies where they pay a sliding scale of the tax burden, adding 10 percent increments over 10 years.

Pride Pak would get a 20-year deal and see the increments rise 5 percent annually. The tax savings would help offset the costs needed to renovate and retrofit the manufacturing space into food grade specifications and other company needs, EDA officials said.

Pride Pak is looking to invest $10 million into the site, by acquiring the building and installing new machinery and equipment. The EDA is proposing the company be spared from paying sales tax on up to $4 million worth of equipment and materials.

The complex is currently assessed for $2.4 million. The EDA plan would have the company pay a fraction of the taxes on a reduced assessment, starting at 0 percent of a $1.2 million assessment in year 1.

The payment in lieu of taxes plan raises the assessment by 3 percent each following year until it’s at $2,104,207 in year 20.

The PILOT plan also sets the tax rates at a combined $45 per $1,000 of assessed property. That is below the combined tax rates of $54.21 for the Village of Medina, Town of Ridgeway, Orleans County and Medina Central School. Those entities will receive PILOT payments on a percentage of their overall share of the combined tax rate.

Should the tax rates fall below a combined $45, perhaps through a dissolution of the village and/or a significant increase in state aid, the PILOTs would then be based on whatever the combined rates are below $45.

Whipple said the EDA wanted to show Pride Pak the community wants them in Medina. He is hopeful the company will soon announce a commitment to Orleans County, but he said it’s not a done deal.