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First Quarter, March 2001

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Seamless Transition from ADtranz to CAF

Spanish rail car manufacturer Construcciones y Auxiliar de Ferrocarriles (CAF) announced in December that it had chosen the former ADtranz facility in Elmira Heights as the home for its North American headquarters. The announcement came just months after ADtranz announced it would be phasing out its Chemung County operations and closing the facility in mid-2001.

STEG, in cooperation with Chemung County, NYSEG and New York State’s Empire State Development Corporation, assembled an economic incentive package, including the benefits of the Elmira Empire Zone, which enabled CAF’s board of directors to choose Chemung County over locations in Pennsylvania and California. The $6 million purchase of the facility and all of its machinery and equipment will continue the tradition of rail car manufacturing in Chemung County.

New York State and Chemung County agreed to provide $100,000 in grants to assist with the acquisition. New York State will also provide additional assistance of up to $200,000 contingent upon future job growth in Elmira Heights. However, the Empire Zone benefits were by far the largest part of the incentive package, providing CAF with more than $5 million in tax credits and utility discounts over the next 15 years. These benefits include a 100 percent refund by the state on all local property taxes paid by CAF for the next 10 years.

Chemung County Executive Tom Santulli praised CAF’s decision to locate in Chemung County and acknowledged the hard work by local and state officials in making this deal a reality. “Securing CAF prior to the closing of ADtranz, allows for a seamless transition of the facility and not a single day of dormancy,” he stated. “Our greatest concern was that once ADtranz closed the doors for good, the building might stay empty for a long period of time. We were committed to landing CAF from the first day we learned of their interest.”

CAF currently has contracts to assemble rail cars for the City of Pittsburgh’s Mass Transit Authority and the City of Sacramento, California. The plant will initially employ 80 full-time people and expects those numbers to increase with future contracts.

AFI Cybernetics Expands

AFI Cybernetics Corporation will create 20 new jobs and nearly double the size of its facility in 2001 as the firm responds to the increased demand for the custom electrical control systems the company engineers and manufactures. AFI Cybernetics, located on Batavia Street in the Town of Southport, will invest nearly $1 million on the capital expansion and equipment.

STEG assisted AFI Cybernetics in securing a $100,000 low interest loan from REDEC and a $150,000 low interest loan from the New York State Job Development Authority. The company will also benefit from a $20,000 training grant, secured through the Empire State Development Corporation; a Linked Deposit interest rate subsidy on a commercial loan of up to $500,000; and the Elmira Empire Zone.

Ken Doyle, President of AFI Cybernetics who started the company in 1983 said, “Our customers, from small businesses to Fortune 100 companies, rely on us for their control system needs—from the simple to the complex, from one-of-a-kind designs to production quantities”.

Horwitz Packaging Expands

Horwitz Paper & Packaging Company, Inc., has purchased the former Flickinger’s food distribution center in Horseheads and will move its entire operations there. The Flickinger’s building has been vacant for a decade with the exception of recent tenant Quality Farm and Home. Horwitz will occupy about half of the 286,000-square-foot facility. Approximately 100,000 square feet remain available to lease.

“We have 42 employees and we’re forming a new division, so we had reached a point that we needed a new building,” said Horwitz’s vice president, Ted Marks. “In the new building we will have 143,000 square feet compared to our current 26,000 square feet. We plan to create eight new jobs immediately and 10 more within one year. Our business is really exploding.”

Marks and partners Dan Mayes and Margaret Thoma own Horwitz, as well as Image Packaging, which will remain in Horwitz’s former building and expand to fill the space there.

“STEG has been working with Horwitz for more than a year, trying to keep them in the area,” STEG president, George Miner, said. “The Flickinger facility was like the A&P (which sold last summer). There were out-of-state owners who had no interest in the facility, or the community. Now we have local owners, new jobs, improvements in the building, and we retain a growing Horwitz Paper.”

Horwitz, founded in Elmira in 1910, is one of the region’s oldest companies. The company is a wholesale distributor of various paper products and janitorial supplies and other products for restaurants, healthcare facilities, schools and other institutions.

STEG Elects Board Members

The board of directors of STEG elected John V. Moore (Denton, Keyser, LaBreque & Moore) chairman of the board at its December 19, 2000 annual meeting. Also elected were Richard W. Swan (Swan & Sons Morss Co., Inc.) and Michael J. Sopp (Anchor Glass Container Corp.) as co-vice chairmen; J. D. Young (Welliver McGuire), secretary; J. Michael Ervin (Elmira Savings & Loan), treasurer; John C. Brugler (Elmira Savings Bank), assistant treasurer; and Nelson Mooers van den Blink (Hilliard Corporation), immediate past chairman.
Re-elected to the board were: John Carpenter (Streeter Associates), Michael Ervin (Elmira Savings & Loan), John Gough (Gough Holding Corporation), George Howell (F. M. Howell & Company), Robert Masia (Town of Southport), Charles Patton (IBEW Local 139), Donald Quick (Mengel, Metzger, Barr & Company), Bryan Samson (Village of Horseheads), William Tryon (Trayer Products), Jan Updegraff (Chemung Canal Trust Company), Vincent Valicenti (Valicenti Advisory Services), and Nelson Mooers van den Blink (The Hilliard Corporation).

Newly elected members to the Board of Directors include: John Alexander (Sayles & Evans), Mark Hagan (Perry & Carroll), Donald Hartman (Imaging & Sensing Technology), Frank Malyska (The Sear Brown Group), and Robert Proia (Vulcraft of New York, Inc.).

Johnson Promoted to STEG VP

James (Jamie) Johnson has been promoted by the board of directors of STEG to the position of vice president. He has been employed by STEG since October 1998, most recently as economic development coordinator.

George Miner, president of STEG stated, “This promotion better represents Jamie's responsibilities and contributions to STEG and our community’s economic development agenda. Jamie has been instrumental in several important projects over the past year, such as NUCOR, CAF, the Taylor Corporation, and Schweizer Aircraft’s expansion.”

  

  

Pepsi Bottling Group

The former Sysco Food distribution facility in Horseheads, NY, will soon be bustling with activity again. The Pepsi Bottling Group (PBG) of Somers, NY, has purchased the facility and plans to begin operations there in the spring of 2001.

The decision to purchase the Horseheads facility came after an extensive site search in the Southern Tier of New York and Northern Tier of Pennsylvania. STEG officials, in partnership with Chemung County, New York State’s Empire State Development Corporation and Pyramid Brokerage, were able to negotiate a package that helped retain 60 jobs and create 20 in Chemung County.

Under the new Empire Zone Program, as PBG increases employment in the zone, the company will qualify for various tax incentives through the State of New York, including real property tax credits. The company also will receive discounts on both gas and electric from NYSEG through the Empire Zone program. Meanwhile, PBG will be investing more than $1 million in the facility in preparation for the move.

PBG spokeswoman Kelly McAndrew explained the new facility provides them with additional space that will provide efficiency of their operations, “We were looking for a larger space to grow the business in the future, and the Sysco location fit the criteria well.”

The Pepsi Bottling Group operates 67 plants and 320 distribution centers in the United States, Canada, Spain, Greece, and Russia. This latest move will add 10 counties in northern Pennsylvania and western New York to PBG’s distribution area.

Empire Zone Expansion

Local economic development and government officials in Chemung County applauded the announcement in January, by New York State Governor George Pataki when he unveiled his plan to double the size of certain Upstate Empire Zones, including Elmira’s. The proposal would affect 22 Zones, increasing the size from 2 to 4 square miles to further stimulate new economic development in upstate communities like Elmira.

The Empire Zones Program, created last year, is an enhancement of the former Economic Development Zones. The added incentives to the program has made doing business in New York virtually tax-free. New benefits to the program include a credit for property taxes paid, a tax credit for business taxes incurred, and a sales tax exemption on virtually all property and services purchased for business use.

NUCOR Steel, which announced the construction of a $50 million Vulcraft plant in the Town of Chemung last year was the first company in New York to take advantage of the new benefits under the Empire Zone program. The added incentives were a major factor in NUCOR’s decision to locate in Chemung and will allow the local municipalities to receive property tax revenue typically abated to attract a project like this.

Manufacturing and Jobs Coming to Southport

Air-Flo Manufacturing Company, Inc., of Prattsburg, NY, will expand its manufacturing operation into the former Figgie Building (which used to house American LaFrance) in the Town of Southport. Air-Flo Manufacturing makes steel beds for dump trucks purchased by dealers for the construction industry and related use.

Air-Flo will initially lease 50,000 square feet of the 330,000- square-foot building but hopes to expand up to 150,000 square feet. With the exception of some warehouse tenants, the Figgie Building has been mostly vacant and underutilized since 1985 when American LaFrance closed its fire apparatus manufacturing operations in Elmira. Air-Flo has options to expand its operation over the next three years, which could result in as many as 100 new manufacturing jobs.

Air-Flo will maintain its headquarters and primary manufacturing operations in Prattsburg. However, they had been unable to attract a suitable labor force to meet their expansion needs in that location. In fact, the company considered relocating its entire operation out-of-state, before electing to expand into Southport.

George Miner, president of STEG, noted that, “We learned of Air-Flo’s expansion desires through the Empire State Development Corporation. Air-Flo was doing a search throughout New York and in southern states to expand. We responded through the Southern Tier Empire State Development office in Binghamton. We also contacted the Steuben County IDA to let them know what was going on. We worked on this project for more than half a year.”

Air-Flo will invest close to $500,000 in machinery (welders, shearing machines and press brakes) used in the metal fabrication of truck beds. New York State’s Empire State Development Corporation has provided a $150,000 grant to subsidize the rent Air-Flo will pay to STI Properties, the owner of the facility. Air-Flo will also benefit from the Elmira Empire Zone through reduced utility rates, sales tax exemptions and various tax credits to reduce their New York State tax liability.

“We couldn’t be more pleased,” stated Miner. “This is what this property was built for — manufacturing. Also, we are confident that the company will be pleased with the Elmira labor force, and as a result, expand rapidly to 100 employees.”