EDA approves deal for Brunner, saving company $500K in taxes
MEDINA – Brunner International will save more than $500,000 in local taxes, plus another $1 million in financing costs through deals approved Friday by the Orleans Economic Development Agency.
The company is investing $13.5 million in an expansion in Medina that will add 35 new jobs. Brunner also will keep 363 existing jobs in the community as part of a 48,000-square-foot expansion at the corner of Bates Road and Route 31.
The EDA board agreed to back a tax-exempt bond for the company’s project. That will save Brunner an estimated $1,066,000 in financing costs for the $13.5 million loan.
The EDA isn’t financially liable for the loan, said Jim Whipple, the EDA executive director.
The agency can use the tax-exempt bonds as an incentive for companies doing industrial expansions, he said.
The EDA approved a tax savings plan known as a PILOT (payment in lieu of taxes) on Friday. The 15-year agreement will save Brunner $426,012 in property taxes to the town of Ridgeway, Orleans County and Medina Central School. The project is just outside the village of Medina.
The PILOT applies to the entire Brunner property, not just the addition. The entire complex, which is about 300,000 square feet, has an estimated assessment of $1,761,000. Brunner will pay 25 percent of the tax burden for the property in the first year with an additional 5 percent added each of the following years until it is paying the full tax burden in year 16.
The PILOT also commits the company to paying $639,018 in taxes over the 15 years.
The company expects to spend $1.9 million for building and equipment improvements. The Orleans EDA waived $76,000 in sales tax plus $53,252 in the mortgage recording tax for the expansion. That saves the company an additional $129,252.
The EDA will collect a $38,000 fee for its role in the project. That fee was determined by multiplying 2 percent by the $1.9 million in building improvements.
When the fee is subtracted from the sales and mortgage tax savings, the EDA estimated the Brunner will see $91,252 in first-year savings. That doesn’t include the savings through the PILOT and bond financing spread over many years.
Brunner produces components for heavy-duty trucks and trailers. It is working to have the new addition up and operational by the end of the year.