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Economic Development Newsletter

July/August 2003:

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New Onion Processing Plant Sprouting in Oswego County

No matter how you slice, dice or peel it, the onion business in Oswego County will soon get a little sweeter — thanks to a brand new venture and a big assist from local economic development agencies. Empire Produce Processors (EPP), a new onion product supplier, announced in August that production and marketing of a line of fresh processed sweet and pungent onion products will begin soon at a new 27,000 square-foot plant on state Route 104 in the town of Oswego. Owners Jim and Sam Zappala expect to produce a full line of whole peeled,
sliced and diced onion products for the food service industry.

The $2.9 million project will receive financial assistance from the County of Oswego Industrial Development Agency (IDA) and from a Small Business Administration (SBA) 504 loan through Operation Oswego County (OOC). EPP will be open for business early to mid January 2004. The project is expected to create more than 30 jobs.

The company will utilize state-of-the-art production equipment to peel 2” to 5” onions. The machines require minimal hand labor aside from the manual orientation of the bulbs to ensure accurate removal of onion tops and bottoms.

“Because we will have technology that will allow us to process a wide variety of onion sizes, we will be able to draw a significant portion of our supply from local growers who often produce slightly smaller onions than onions produced in competing areas in the country, therefore supporting our local economy,” said Jim Zappala.

Prepared onion consumption in the United States averages 10 to 19 pounds per person, per year, with the largest market for processed onion products in the northeastern and mid-Atlantic states, according to EPP.

“We see the growing trends in the consumption of fresh cut produce as an indicator of potential for growth in the fresh processed onion industry,” said Zappala.

Owners Jim and Sam Zappala are no strangers to the onion business. Zappala Farms is the largest producer of onions in New York State specializing in the sweet variety with an annual onion production volume of 250,000 40-pound boxes of sweet onions that are marketed under the “Empire Sweet” brand.

Sam Zappala is also general manager of Oswego Growers and Shippers, a company that buys and sells onions from local, state and national growers and suppliers with an annual volume of 750,000 50-pound units and gross sales of more than $6 million per year.

“Processing is the final link in the cycle of onion production in Oswego County,” said Jim Zappala.“ EPP will be able to supply its customers with fresh processed onion products on virtually a year-round basis without having to draw raw product from other areas.”

The project will also receive financial assistance from other OOC partners who are helping to finance the new manufacturer, including Empire State Development Corporation, Central New York Enterprise Development Corporation, Niagara Mohawk Power Corporation and an Economic Development Initiative Fund (EDIF) grant from the Oswego County Legislature.

“In the midst of a struggling economy, we are fortunate to have the investment of an agricultural manufacturer like Empire Produce Processors in Oswego County,” said L. Michael Treadwell, CEcD, executive director of OOC. “The agricultural industry has long been an essential component of Oswego County’s economy.”

Oswego County Legislature Chairman Morris Sorbello commented, “Being an onion farmer myself, I am proud to see our homegrown Oswego County onions evolve into a marketable, diverse product with worldwide appeal. A new business like Empire Produce Processors is a shot in the arm at a time when long-time manufacturers such as Nestle and International Paper have closed in Oswego County.”

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Sonoco to Close in Fulton; OOC Searching for Buyer

Sonoco Flexible Packaging, the successor company to the Morrill Press in Fulton, announced its plans in August to close its local plant becoming the latest statistic in the city’s loss of manufacturing jobs due to consolidation and cost cutting.

OOC Executive Director L. Michael Treadwell commented, “Much to the dismay of Operation Oswego County, along with both county and city officials, Fulton will endure yet another setback as Sonoco Flexible Packaging has opted to phase out its local plant by early 2004. According to Sonoco, this consolidation is part of the company's previously announced plans to reduce its average cost structure by more than $60 million and is expected to result in significant savings for the company. While that may be a sound business decision for Sonoco, it means a significant loss for the Fulton community and the company’s loyal and productive employees.”

As was the case with Nestle, various economic development funding and incentives were either provided or made available to Sonoco in the past decade. Most recently, OOC and Niagara Mohawk assisted Sonoco in obtaining an 800-kilowatt allocation of electricity through the New York State Power for Jobs program. The allocation wasextended to Sonoco in order to help secure the plant’s 130 jobs.

Treadwell pointed out that last year, with the assistance of OOC, the Oswego County Legislature, Empire State Development, and the Fulton Community Development Agency, Sonoco invested $1 million in new equipment to add “E-Beam” technology at its Fulton plant in order to help make it more competitive in the packaging market. However, due to the overall status of the economy, corporations like Sonoco now have excess capacity.

Consolidations and mergers of operations have negatively affected our local economy.

Operation Oswego County is actively working to attract a potential buyer for the Sonoco facility.

As the closing of another long-time Fulton manufacturer looms, there continues to be an encouraging steady stream of small business development in Oswego County. Small business is a vital component of the county’s economy and has proven to be a bright spot in an otherwise gloomy national, state and local economy (See Business Assistance column).

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Study Results: Oswego Area is a Prime Location for Call Centers

The The city of Oswego area is an ideal location for call centers and light manufacturing operations, according to a comparative cost analysis initiated by the City of Oswego Community Development Office (CDO) and Operation Oswego County (OOC).

Results of the study, conducted by location consultants The Boyd Company, indicated that compared to a sampling of 30 locations throughout the United States, the total annual operating costs of a proposed 300-worker call center in the Oswego area are the most competitive at $10.9 million; 17% lower than the average cost estimate of $13.2 million in the study.

In addition, study results showed that compared to 24 other locations throughout the United States for operating a 400-employee, 150,000-square foot light manufacturing plant in the Oswego area, annual operating costs would be $4.3 million lower at $17.7 million than those of the location with the highest operating costs in Detroit, Mich. The Oswego area was also 11% lower than the average cost estimate of $19.9 million.

“Because of a cooperative effort between the City of Oswego, the County of Oswego and Operation Oswego County, we will now be able to utilize the collected information from the study as a marketing tool to aggressively target specific types of industry that have potential for the Oswego area,” said Oswego Mayor John Gosek.

The comparison study was conducted using diverse locations throughout the United States including a series of small and large market locations such as Buffalo, NY, Dallas, TX, Knoxville, TN, Danbury, CT, and Albuquerque, NM, as well as those areas with major concentrations of call center and light manufacturing operations such as Jacksonville, FL, Charlotte, NC and Phoenix, AZ.

To create additional visibility for Oswego as a potential call center location, results of the study will be shared with publication editors in various communities across the nation.

According to SearchNetworking.com, a network of industry-specific IT Web sites, a call center is a central location where customer and other telephone calls are handled by an organization, usually with some amount of computer automation. Call centers are used by mail-order catalog organizations, telemarketing companies, computer product help desks, and any large organization that uses the telephone to sell or service products and services. Call centers employ 100-500 people on average.

“It’s important to note that we plan to specifically solicit technical inbound call centers as opposed to outbound call centers. Inbound call centers provide high tech positions that pay better wages,” said OOC’s L. Michael Treadwell. The fact that Oswego is the home of a four-year university, SUNY Oswego, is a significant factor in attracting call center interest in the area, according to Treadwell.

Another key factor that is needed in order to make a community an attractive location for a call center is the availability of quality office and/or open box type space that can be quickly and easily retrofitted for their specific use, he added.

The study was funded by the city of Oswego and the Oswego County Legislature’s Economic Development Initiative Fund administered by OOC.

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New Incentives Available for Business

To assist and encourage the growth of new and expanding businesses in Oswego County, several incentives have recently been initiated:

Energy Efficiency In Empire Zones Program: Businesses certified and located in the Oswego and Fulton Empire Zones (EZ) may be eligible to receive up to 50% funding (maximum of $25,000) to implement energy efficiency technology and systems with Niagara Mohawk’s Energy Efficiency In Empire Zones program. This is an excellent opportunity to make your business more profitable by reducing energy consumption and enhancing productivity. The program encourages efficiency upgrades such as lighting, electronic speed controls, electric load management, building automation systems, motors and HVAC systems.

EZ Boundaries Revised: Boundary revisions in the EZs were recently expanded to offer even greater development potential in Oswego County. Prospective or expanding businesses certified and located in one of the two EZs are eligible for special assistance and benefits designed to create the best climate possible for profitability and growth. Some of these benefits include preferential treatment for New York State-sponsored programs and local lending programs; priority status for both licensing and coordinating with all New York State regulatory agencies; special employee training assistance programs; and free water for three years in the Oswego EZ. Key revisions include a change in total acreage in the Oswego EZ to 1,245 with a reserve balance of 35 acres for future expansion and the expansion of commercial areas in the town of Minetto, as well as the expansion of the Fulton EZ to include properties in the town of Volney and commercial areas in the town of Granby and city of Fulton.

Tax Relief Program for Capital Investment: If your company has been planning to invest in new equipment or machinery, now is the time to take action thanks to the Jobs and Growth Tax Relief Reconciliation Act of 2003 passed by Congress this year. This legislation increases the amount of money small business owners can deduct from their taxes from 2003 to 2006 for investment in new equipment such as computers and machinery. OOC is authorized to finance projects using the SBA 504 loan program, which is designed to promote economic development growth and job creation in small businesses and make the overall financing structure for a new business or project more attractive and affordable. The program offers accessible, fixed rate, long term financing for land, buildings and equipment.

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New Economic Development Projects

Recent economic development projects around Oswego County include:

DeWald Roofing Company, Inc. of East Syracuse, will relocate its business to the town of Hastings creating 40 jobs. Funding for the project will be assisted by Fleet Bank and a Small Business Administration (SBA) 504 loan through OOC.

Fulton Tool Company, with coordination assistance from OOC and the Fulton Community Development Agency, will soon relocate from its former location on Schuyler Street in the city of Fulton to the plant formerly occupied by Oswego Wire on Route 3 in Fulton. Fulton Tool’s Schuyler Street plant was destroyed by fire this summer. Nine full-time employees are expected to be retained and 11 additional full-time positions will be created.

Columbia Mills Site: A master redevelopment plan for the former Columbia Mills 90-acre property in the town of Minetto was expanded to include properties located on the east side of state Route 48 to enhance the potential for commercial redevelopment. The properties are also being added to the Oswego Empire Zone.

WiseBuys Stores, Inc. will be a new department store located in the former 59,600 square-foot Ames building in Pulaski. The $1 million store will be one of five WiseBuys stores in the North Country and will create 55 jobs. The project will receive financial assistance from the County of Oswego Industrial Development Agency (IDA), New York Business Development Corporation and Key Bank.

The Sub Shop will be a new restaurant located in the former location of Jreck Subs in the city of Oswego. Renovations will be made to the existing building to offer submarine sandwiches, coffee and ice cream which is expected to create 14 jobs. The project will receive financial assistance from the IDA.

Port City Family Practice will occupy a new 8,000 square foot medical office facility and a lab operation affiliated with Oswego Hospital to be constructed in the city of Oswego. The project will create six jobs and retain nine. Funding assistance will be provided by the IDA, Community Bank and the City of Oswego Community Development Office.

Joe’s Corner Market will be a new 2,400 square-foot grocery/convenience retail store in the town of Palermo. The business will also include a custom metal fabrication shop specializing in trailer hitches and hand railings. The project is expected to create three jobs and will be funded by Fulton Savings Bank and the IDA.

S&B Sheaffer, Inc. is a new bait and tackle store with three overnight lodging units and boat repair services located in the town of Mexico. Two seasonal jobs will be created. Funding assistance was provided by the IDA and Pathfinder Bank.

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Local Start-Up Companies Receive SBA Awards

Two local start-up companies received 2003 SBA Small Business Excellence Awards in ceremonies held in Syracuse recently — Choo-Choo Charlie’s of Williamstown and Aunt Mary’s Italian Cookies and Catering of Oswego.

Choo-Choo Charlie’s: Operation Oswego County and the SUNY Oswego Small Business Development Center (SBDC) selected Choo Choo Charlie’s for the award based on their overall commitment to the Oswego County community. In 2000-01, brothers James and Jeffrey Radley built a new 1,600 square foot building on the corner of state Routes 104 and 13 in the town of Williamstown. By the fall of 2001, Choo Choo Charlie’s convenience store opened its doors providing grocery items as well as fuel and homemade pizza to its customers.

According to the award citation, the Radleys have made "tremendous personal sacrifices over the last three years and have exhibited the highest professional conduct in readying themselves for this business venture. Their strong work ethic, positive attitude and clear marketing approach to their business plan also helped to solidify their entrepreneurial success. As a result, they not only met their sales projection of $1 million for 2002, but they have exceeded their original employment goal of seven employees." Currently, Choo Choo Charlie’s employs 10.

Aunt Mary’s Italian Cookies and Catering: Mary Plummer, owner of Aunt Mary's Italian Cookies and Catering of Oswego, received the SBA's Home-Based Business Advocate Award for her assistance and commitment to helping new business owners. She was recognized for her efforts in a special ceremony before the Oswego County Legislature recently.

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