Economic
Development Newsletter
March/April 2003:
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Nestle:
Operation Turnaround Impact Study Results Released: Plant
Sale Price of $3.5 Million Termed “Potentially Marketable”
Operation Turnaround, a task force of local, state and federal officials
developed to find a reuse for the closing Nestle Chocolate and Confection
plant in Fulton, announced the results of a conducted study and
to assess the impact of the closing on the local economy.
Nestle recently announced that the purchase
price for the facility has been set at $3.5 million. The price tag
makes the plant property “potentially marketable” and
low enough to attract companies willing to redevelop, according
to OOC Executive Director L. Michael Treadwell. Knowledge Systems
and Research, Inc. (KS&R) of Syracuse was retained to collect
data to determine the economic impact of the closing, measuring
the impact on wages and benefits, job retention, purchases of services
from local vendors, local tax collection, and community organizations.
KS&R conducted telephone and mail surveys
with Nestle vendors within a 25-mile radius of the plant in Oswego
and northern Onondaga counties, as well as with Fulton retailers
who conduct business near the plant. Key community representatives
in the City of Fulton and Oswego County were also interviewed.
Highlights of the study:
• The majority of the retailers surveyed
indicated that their sales have been stable or growing over the
last
two years.
• About 80 local businesses are Nestle vendors, of which about
50 are located in Oswego County. Most of these vendors expect reductions
in gross sales in 2003 as a result of the plant closing.
• Most of the retailers expect the plant closing to have a
negative impact on sales, and two in ten retailers expect reductions
in their workforce as a result of the plant closing.
• Surveyed retailers reported that 18 percent of their customers
were Nestle employees.
• Most survey respondents believe that state and local taxes,
followed by energy costs, were the main contributors to the Nestle
plant closing.
Counting Nestle employees, vendors, and retailers
affected, the total job impact of the closing in Central New York
is expected to be a reduction of 1,300 to 1,600 jobs, with lost
household earnings of more than $52 million. The survey also pointed
to likely losses in local tax revenue, water and sewer fees, and
local community contributions.
"While noting that the results of the
study are certainly challenging for the local economy, Treadwell
said, “It is
important to have an economic impact statement like this to build
a case to help attract economic development grant funding which
will give us a competitive edge when seeking state and federal funding
for initiatives associated with the Nestle property specifically,
as well as for infrastructure improvements that would benefit
the city in the future.”
Members of Operation Turnaround toured the
facility recently to determine what may be left behind when
the plant shuts down.
“There are some areas of the plant
that are in excellent shape,” Treadwell said, noting that
“there are areas that offer warehouse and distribution space
for a manufacturer.”
Treadwell said, “The tour focused on
three main objectives which were to obtain authorization to retain
a private
firm to evaluate the plant for reuse and redevelopment, evaluate
the electrical infrastructure, and determine which buildings could
be segregated. We need to get the plan approved by the company,
but I don’t see any problems in working with them.”
Treadwell said the company indicated that
a maintenance crew would probably still be available after the plant
closes, along with Nestle personnel available to share information
with interested buyers.
Property Marketing Efforts Ongoing
OOC has contacted 825 chocolate manufacturers
with 100 or more employees in 81 countries around the globe, including
the United States, England, Germany, Poland, Romania, and Switzerland.
Treadwell said that about 10 or 12 responses have been received,
indicating that “they would like to know more” but there
is no serious prospect to date. Treadwell said that all of the contacts
have been with chocolate manufacturers, but he expects the group
will soon send a new set of mailers to 150 to 200 site location
consultants who work to find facilities for companies.
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Sonoco’s
Electric Bills Drop With Power For Jobs Award
Sonoco Flexible Packaging in Fulton recently
helped secure the plant’s 123 local jobs when it received
approval for low-cost electricity through the New York State Power
for Jobs program, according to Senator James Wright.
“Over the last couple of years, Sonoco
has invested in their Fulton facility,” Sen. Wright said,
noting that the company recently invested $1 million for new E-Beam
technology equipment. “This will ensure Sonoco as an Oswego
County employer for many years to come.”
Operation Oswego County supported the company’s
application for the 800 kw Power for Jobs allocation and assisted
in coordinating the application process, along with Niagara Mohawk,
according to OOC Executive Director L. Michael Treadwell, CEcD,
Governor George Pataki and the state legislature established the
Power for Jobs program in 1997, which provides economical electricity
for businesses and not-for-profit corporations that commit to create
or retain jobs in New York. Qualifying businesses could save as
much as 25 percent on their electric bills through the program.
According to Sonoco Plant Manager Kevin Miles,
“The low cost electricity provided by the Power for Jobs program
will help change our utility rates to make us more competitive not
only with other companies, but with our sister facilities in other
parts of this country and Canada.” The plant’s local
history dates back over 130 years, from The Morrill Press to Engraph
to today’s Sonoco Flexible Packaging, and has consistently
expanded to serve expanding markets."
Today, the company’s flexible packaging
division makes wrappers, bags, and pouch containers for such national
brand name companies as Kraft, Nabisco, and Wrigley. Sonoco is a
NYSE-listed international company, headquartered in Hartsville,
South Carolina.
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Infrastructure
Key To Economic Development; Water For Volney Airport District Approved
Public water lines will be extended to nearly
400 households and several businesses, and the Town of Volney will
receive $1.25 million in grant funding from USDA Rural Development
and the New York State Small Cities programs to help cover the cost,
thanks to a positive vote in early April by property owners in the
new water district
The water district will improve infrastructure
in the Town of Volney by extending public water lines to current
businesses occupying sites in the Oswego County Airport Industrial
Park, including Niagara Mohawk, Entergy, and Canfield Machine and
Tool. It will also make the area more attractive for future business
and residential development and help create new jobs in the county.
An abundant supply of water also will help assure better fire protection,
lower insurance costs, and increased property values.
The average cost for property owners connected
to the new water lines is expected to be less than $36 per quarter,
plus $382 annually to finance the installation of the system. Lowincome
property owners are also eligible for financial assistance to connect
to the water line.
“Improvements to the infrastructure
of a community are vital to ensure economic growth and strength
for the future,” said L. Michael Treadwell, CEcD, executive
director of Operation Oswego County (OOC). “Water,
sewer, and telecommunications infrastructure needs are critical
to Oswego County’s future development. OOC works closely with
state and local government, the U. S. Economic Development Administration,
and the Central New York Regional Planning and Development Board
to identify and prioritize infrastructure projects.”
New Sewer Line For Independence
Industrial Park
Treadwell also noted that work is set to
begin soon on extending a sewer line from the City of Oswego along
County Route 1 and 1A to the Sithe Energies property in the Town
of Scriba in the 140-acre Independence Industrial Park, serving
this area with a vital infrastructure need, the lack of which has
severely limited its development potential.
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OOC Business
Assistance
Operation Oswego County offers an array of
business assistance services to both new and expanding companies
throughout Oswego County.
Sun Catchers Tanning Salon recently expanded
its business to provide a fullservice salon, relocating to larger
quarters on West First Street in Fulton, creating four new jobs.
The OOC-administered SBA 504 program is providing financial assistance
for the project.
Trapasso Tire and Auto Service, Inc. announced
recently that it will expand its auto service and sales business
in Fulton, helping to create and retain 10 jobs. Financial assistance
for the project is being provided by the SBA 504 program administered
by OOC.
Oswego Health’s major expansion project
for Oswego Hospital will include the acquisition and installation
of an
emergency generator system as well as the refinancing of the Oswego
Health Services Center. The County of Oswego Industrial Development
Agency (IDA) will issue $6 million in tax exempt civic facility
revenue bonds to assist in the project, which will help create 38
new jobs.
Golden Corral Restaurant in Fulton updates
its salad bar and menu offerings as the result of a recent and extensive
renovation of the popular dining facility. The County of Oswego
IDA provided a $25,000 loan to assist with renovations and acquiring
new equipment for the project.
Business is Booming for MyDigitalDiscount.com
and 26-year-old entrepreneur, Matthew Dawson, is predicting a bright
future for his unique Internet-based business housed in the Oswego
County Business
Expansion Center (BEC) in Oswego. The BEC is one of two business
incubator buildings managed by Operation Oswego County, Inc. for
fledgling businesses. Dawson’s company is an online discount
shop specializing in the sale
of bargain-priced products including digital cameras, MP3 (portable
digital music) players and accessories such as memory storage units
and rechargeable batteries.
"My business has doubled in the
past three months and it’s been way up since the beginning
of the year," Dawson said. "When I first started the business
in 2001, I predicted that in the third year of business, revenue
would reach $1.5 million. We already reached that goal in 2002,
so for this year, I’ve revised that goal to $3.5-4.5 million.
The goal for 2004 is $6-8 million."
The Business Expansion Center
Advantage
To help provide customer service for his
rapidly growing business, Dawson employs four people. He needed
space for employees and for the products he sells.
"At the same time, I knew I needed to be able to build my business
without the limitations that renting commercial
space can present to a startup business – especially one that
doesn’t rely on walk-in traffic." He found an ideal solution
by locating his business at the BEC in 2002.
Micro Enterprise Training Beneficial
to Business
Although Dawson has two college degrees
in business administration, he recently completed the Micro Enterprise
Training Program in the City of Oswego. "I knew I could learn
something from the instructors’ practical experience,"
Dawson said.
“By participating in the program,
I not only received instruction on specific business-related topics
like business legalities, accounting, marketing and business insurance,
but I was also able to secure a $15,000 loan through the City of
Oswego Community Development Office," Dawson said.
In addition to funding from Oswego CDO,
Dawson also received an $80,000 loan from Pathfinder Bank.
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Black Clawson
Sold to Fulton Management
In a move seen as strengthening Black Clawson’s
position as a member of the Fulton manufacturing establishment,
“all of the assets and cash flows” of the company were
sold by Landegger Industries to managers of Fulton’s Black
Clawson plant, backed by Hamilton Robinson, a Connecticut investment
house, according to company President
Mark Pannozzo.
The CEO said, “We bought assets but
also agreed to extend employment offers to all active employees.”
About 160 people work at the Fulton plant.
“The employees of [the new company]
Black Clawson Converting Machinery, Inc., are very excited about
this opportunity, said Pannozzo.
“The relationship with Hamilton
Robinson LLC provides the new company with a strong financial foundation
and access to additional capital for growth opportunities. The new
company is ideally positioned and structured for … improvement
in all of its products and services. Company growth is the target.”
“The prior owners could not
provide us with the resources to keep us going, This will keep people
in their jobs, and we will continue to serve our market,”
Panozzo concluded.
OOC Executive Director L. Michael Treadwell,
CEcD, noted, “When a company invests in assets such as buildings,
equipment, names, and trademarks, it is usually the buyer’s
intent to stay where they were purchased. If it were just a corporate
buyout, the company might have been relocated. Based on our previous
discussions, we’re optimistic that the transition will be
positive. This deal should trigger new revenue for the plant and
make it a stronger operation.”
The present plant, established in Fulton
in 1867 as Dilts Machine Shop, designs, manufactures, installs,
and services a wide range of equipment f or the flexible web converting
and plastics industries worldwide. Some of the markets served include
flexible packaging for food and healthcare products, adhesive coated
tapes and labels, pre-coated convenience products, imaging products,
plastic films for consumer and industrial applications, and plastic
resin production.
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SUNY Oswego
Has $119.3 Million County Impact
In a recent study, “Prospering Together:
2001—2002,” SUNY Oswego reported its economic impact
to be $119.3 million in Oswego County, with a total of $213.3 million
annually fueling the economy of the seven-county Central New York
region.
As one of the top employers in Oswego County
and Central New York, the campus provides 1,776 fulltime- equivalent
jobs. Spending by students, faculty, and staff creates additional
1,420 jobs in Oswego County and 1,728 jobs in the six neighboring
counties—Onondaga, Cayuga, Jefferson, Lewis, Oneida, and Madison.
“The purchasing power of our
employees combined with that of the college itself and the goods
and services consumed by our more than 8,500 students helps drive
the regional economy,” SUNY Oswego President Deborah F. Stanley
said.
The report also found that 943 student interns
provided more than 325,400 hours of service to local businesses,
non-profit agencies, and government offices last year, while student
expenditures are estimated at $30.6 million within Oswego County
and $39.2 million within the region. Faculty and staff account for
another $30.6 million in Oswego County and $39.9 million in the
region.
The report cites other community benefits
derived from SUNY Oswego, including programs through the Center
for Business and Community Development, educational partnerships
with Oswego County school districts, and cultural and entertainment
opportunities.
“In essence,” Stanley
said, “we help nurture, develop, and grow human resources.
Graduates use their talents and abilities to advance the communities
in which they live, grow, and prosper.”
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Fulton
Thermal Helps U.S. Forces to Keep Clean
Fulton Thermal Corp., a division of the
Fulton Companies located in the Town of Richland, has been helping
U. S. soldiers, whether in the Iraqi deserts, the hills of South
Korea, or in the mountains of Kosovo, to launder uniforms and other
clothing more efficiently than ever before.
With a thermal-fluid heater and skid system
built by Fulton Thermal as a key component in the U. S. Army’s
Laundry Advance Design System (LADS), the diesel-powered system
filters and recycles dirty water and operates all day on just 400
gallons of water, a huge improvement over previous systems which
required 6,000
gallons daily.
The company has provided between 50 and
60 units to the Army for its new laundry system and is under contract
to build 150 more in the next two years, according to company President
and CEO Bram Palm.
Congressman John McHugh, a senior member
of the House Armed Services Committee, has secured funding for the
LADS program over the past three years. Four of the new systems
were delivered to Fort Drum last February.
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