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HomeMy WebLinkAboutI - 28 General Project Plan - Byrne Capital ProjectZ4 ISTARK OFoaruNirv. Byrne Capital Project Empire State Development Dear Kristin Rocco-Petrella: I am hereby transmitting, for filing in your office, the General Project Plan of the New York State Urban Development Corporation ("UDC"), doing business as Empire State Development (the "Corporation"), together with the findings required pursuant to Sections 16-m and 10(g) of the UDC Act, for the Byrne Capital Project in Cortland County. This material is being filed pursuant to Section 16(2) of the UDC Act. In accordance with Section 16(2) of the Act and recent Legislation (S.50001/A.40001, amending subpart A of part BB of chapter 56 of the laws of 2021), a virtual public hearing to consider the Plan(s), open to all persons, will be held remotely by the Corporation on Wednesday April 13, 2022 from 2 p.m. to 3 p.m. utilizing the Zoom video communications and teleconferencing platform. Detailed instructions for participation in the virtual hearing can be viewed at https://esd.ny.gov/esd-media-center/public-notices. Additionally, the public is given an opportunity to comment on the Project(s) by submitting comments electronically to LandaoroiectcommentsCa)esd.nv.eov Subject: Comment Byrne Capital Upstate Revitalization Initiative(Capital Grant). by 5:30 p.m. on Wednesday April 13, 2022. ESD is a corporate governmental agency and public benefit corporation of the State of New York created by the New York Urban Development Corporation Act of 1968 as amended. Therefore, pursuant to CPLR Section 8017, ESD is exempt from any fee which may be imposed in connection with your receipt of these materials. Sincerely, Andrea Burdick 01ndt".8utd1ck Administrative Assistant 1 to James Fayle Regional Director Empire State Development 620 Erie Blvd West, Suite 112, Syracuse, NY 13204 (315)-479-3200 andrea.burdick(cr�,esd.nv.eov j� � LS lJ L� � U LS II,1 APR - 2022 1J CORTLANDVILLE TOWN CLERK'S OFFICE 4c.id eQvh(ticd KaA -416) 6 604d oajl 2(6z� 1(062�_ NE' ORK I Empire State STATE OF OPPORTUNITY. Development FOR CONSIDERATION March 24, 2022 TO: The Directors FROM: Hope Knight SUBJECT: East Syracuse and Cortland (Central New York Region — Onondaga and Cortland County) —Byrne Capital —Upstate Revitalization Initiative —(Capital Grant) REQUEST FOR: Findings and Determinations Pursuant to Section 10(g) of the Act; Authorization to Adopt the Proposed General Project Plan forthe Purpose of Making a Grant; Authorization to Make a Grant and to Take Related Actions; Determination of No Significant Effect on the Environment ESD Directors' Summary Byrne Holdings, Inc. is a privately owned dairy manufacturing business that currently operates three manufacturing facilities and two warehouses throughout New York State. In 2017, the Company applied for project funding and ESD staff signed an Incentive Proposal with the Company, agreeing to pay a portion of the costs to assist with construction and the purchase of machinery and equipment for the Company's three production facilities. In exchange for Grant funding totaling $6,000,000 sourced from the Upstate Revitalization Initiative, the Company agreed to invest $144,758,437 into the project, including $45,000,000 of its own equity, and retain its 433 employees in New York, and hire and additional 289 employees. The Company has started construction and renovations at two of the three project locations listed in the Incentive Proposal. Funding for this portion of the project pertains specifically to two project locations — 6750 W. Benedict Road and 3156 Byrne Hollow Crossing. The total project cost at these two locations is $119,308,437, and the proportional grant amount is $4,945,140. The remaining project cost at the third project location will total $25,450,000, and the balance of the Grant ($1,054,860) will be brought back to the Board when the third project location completes its environmental SEAR review. Specific to the two project locations where construction and renovation work has begun, the Company has made $43,000,000 of the $119,308,437 investment to -date, and the Company currently has 556 full-time employees. Because the Company has satisfied its obligations underthe Incentive Proposal for the first two disbursement milestones as it relates to two of the three project locations, ESD is now recommending that the Board authorize the release of $4,945,140 out of the total $6,000,000 grant. D Empire State Development 633 Third Avenue, New York, NY 10017 APR - 2022 (212) 803-3100 1 www.esd.ny.gov CORTLANDVILLE TOWN CLERK'S OFFICE General Proiect Plan I. Proiect Summary Grantee: Byrne Holdings, Inc. ("Byrne" or the "Company") ESD* Investment: A grant of up to $4,945,140 to be used for a portion of the cost of construction and the purchase of machinery and equipment * The New York State Urban Development Corporation doing business as Empire State Development ("ESD" or the "Corporation") Project Locations: 6750 W. Benedict Road, East Syracuse 3156 Byrne Hollow Crossing, Cortland Proposed Project: Expansion of manufacturing plant and equipment purchases in East Syracuse and Cortland Project Type: Business expansion involving job retention and creation Regional Council: The Central New York Regional Economic Development Council ("CNYREDC") has been made aware of this item. The project is consistent with the CNYREDC's plan to strengthen targeted industry concentrations that leverage unique economic assets. Employment: Initial employment at time of Application to ESD: 433 Current employment level: 556 Minimum employment through January 1, 2025: 664 II. Proiect Cost and Financing Sources Financing Uses Amount New Construction $44,837,000 Machinery & Equipment 68,469,437 Infrastructure & Site Work 3,275,000 Soft Costs 2,727,000 Total Project Costs S119,308.437 Financing Sources Amount Percent Rate/Term/Lien ESD-Grant $4,945,140 4% Manufacturers & Traders Trust Co. 69,363,297 58% Variable/5 yrs/first lien* Company Equity 45,000,000 38% Total Project Financing 5119,308.437 100% 2 *first lien at the Cortlandville and East Syracuse project locations Ill. Proiect Description A. Company Industry: Dairy Manufacturing Company History: In business since 1933, Byrne Dairy is a family -owned producer and distributor of a variety of dairy products. Based in Central New York, Byrne works with over 250 local family farms. Ownership: Privately owned and operated by third generation Byrne family Size: Three dairy manufacturing facilities and two warehouse facilities. The Syracuse facility manufactures ice cream, East Syracuse produces extended shelf life aseptic dairy and non-dairy products, and Cortlandville produces cultured dairy. Market: Extended shelf life and aseptic products allow Byrne to market its products throughout the United States, North America and Central America ESD Involvement: Byrne was looking to expand and upgrade its equipment at their three manufacturing facilities. In order to accommodate this expansion Byrne approached ESD in 2017 to bridge a gap in its budget. In December 2017, ESD offered the Company an Upstate Revitalization Initiative Grant which was subsequently revised in 2021. The Company accepted the revised $6,000,000 Upstate Revitalization Initiative Grant in December 2021. Without financial assistance, this project would not have been feasible. The Company is requesting the approval of $4,945,140 in funding for two of the three project locations. The remainder of the $6,000,000 ($1,054,860) will be requested at a later date once the third project location completes its environmental SEAR review and has begun its portion of the project. Competition: Dryers, Turkey Hill, Stonyfield Past ESD Support: This is the Company's first project with ESD. B. The Proiect Completion: November 2024 Activity: The Company will be completing a multi -phase expansion at its locations in East Syracuse, Syracuse, and Cortlandville. The funds for this project relate 3 specifically to the locations in East Syracuse and Cortlandville. In East Syracuse the project includes construction and equipping of an addition specifically for aseptic processing, filling and packaging; the construction and equipping of an addition for the expansion of current production; construction of an access road to alleviate traffic congestion; and construction of a wastewater treatment facility on -site. In Cortlandville the project includes the expansion and equipping of the Byrne Cortlandville production facility. In Syracuse the project includes construction or expansion of refrigerated warehousing facilities —this part of the project will be returning to the Board for approval at a later date. Results: Retain 433 existingjobs and create 231 newjobs. The Company has already created 123 new jobs. Business Investment Project: Benefit -Costs Evaluations are used in evaluating projects that are categorized as Business Investment, Infrastructure Investment, .and Economic Growth Investment and that involve 1) job retention and/or creation and/or 2) construction -related activity. For Business Investment projects, benefits typically reflect the impact of both jobs and construction - related activity. For Infrastructure Investment and Economic Growth Investment projects, which generate long-term benefits not captured in the period of analysis and may involve no permanent job commitments, the estimated benefits typically reflect only construction -related activity. Evaluated over a seven-year period, the following are anticipated project impacts (dollar values are present value): ■ Fiscal benefits to NYS government from the project are estimated at $10,077,139; ■ Fiscal cost to NYS government is estimated at $4,945,140; ■ Project cost to NYS government per direct job is $35,168; ■ Project cost to NYS government per job (direct plus indirect) is estimated at $17,635; ■ Ratio of project fiscal benefits to costs to NYS government is 2.04:1; ■ Fiscal benefits to all governments (state and local) are estimated at $17,551,588; ■ Fiscal cost to all governments is $4,945,140; ■ All government cost per direct job is $35,168; ■ All government cost per total job is $17,635; ■ The fiscal benefit to cost ratio for all governments is 3.55:1; M ■ Economic benefits (fiscal plus total net resident disposable income from project employment) are estimated at $131,929,911, or $470,478 per job (direct and indirect); ■ The economic benefit to cost ratio is 26.68:1; ■ Project construction cost is $50,839,000, which is expected to generate 379 direct job years and 220 indirect job years of employment; ■ For every permanent direct job generated by this project, an additional 0.78 indirect jobs are anticipated in the state's economy; ■ The payback period for NYS costs is three years. Grantee Contact: James A. Gosier, General Counsel 2394 US Route 11 Lafayette, NY 13084 Phone: (315) 703-9093 E-mail: JGosier@byrne1933. com ESD Project No.: 132,408 Project Team: Origination Zachary Becker Project Management Leanna DeFrancesco Contractor & Supplier Diversity Jordan Lopez Finance Jonevan Hornsby Environmental Eram Qadri C. Financial Terms and Conditions 1. Upon execution of the grant disbursement agreement, the Company shall pay a commitment fee of 1% of the $4,945,140 capital grant ($49,451.40) and reimburse ESD for all out-of-pocket expenses incurred in connection with the project. 2. The Company will demonstrate no materially adverse changes in its financial condition prior to disbursement. 3. The Company will be required to contribute a minimum of 10% of the total project cost in the form of equity contributed after the Company's acceptance of ESD's offer. Equity is defined as cash injected into the project by the Company or by investors, and should be auditable through Company financial statements or Company accounts, if so requested by ESD. Equity cannot be borrowed money secured by the assets in the projector grants from a government source. 4. Prior to disbursement, the Company must employ at least the number of Full-time Permanent Employees set forth as the Baseline Employment in the table below. A Full-time Permanent Employee shall mean (a) a full-time, permanent, private -sector employee on the 5 Grantee's payroll, who has worked at the Project Location for a minimum of thirty-five hours per week for not less than four consecutive weeks and who is entitled to receive the usual and customary fringe benefits extended by Grantee to other employees with comparable rank and duties; or (b) two part-time, permanent, private -sector employees on Grantee's payroll, who have worked at the Project Location for a combined minimum of thirty-five hours per week for not less than four consecutive weeks and who are entitled to receive the usual and customary fringe benefits extended by Grantee to other employees with comparable rank and duties. 5. Up to $4,945,140 will be disbursed to the Grantee in ten installments as follows: a) an Initial Disbursement of ($600,000) upon documentation of project costs totaling $14,475,850 and documentation of the employment of at least 462 Full-time Permanent Employees in New York State (Employment increment of 29), assuming that all project approvals have been completed and funds are available; b) a Second Disbursement of ($600,000) will be disbursed upon documentation of additional project costs totaling $14,475,850 ($28,951,700 cumulatively), and documentation of the employment of at least 490 Full-time Permanent Employees in New York State (Employment Increment of 28), provided Grantee is otherwise in compliance with program requirements; c) a Third Disbursement of ($600,000) will be disbursed upon documentation of additional project costs totaling$14,475,850 ($43,427,550 cumulatively), and documentation of the employment of at least 519 Full-time Permanent Employees in New York State (Employment Increment of 29), provided Grantee is otherwise in compliance with program requirements; d) a Fourth Disbursement of ($600,000) will be disbursed upon documentation of additional project costs totaling $14,475,850 ($57,903,400 cumulatively), and documentation of the employment of at least 548 Full-time Permanent Employees in New York State (Employment Increment of 29), provided Grantee is otherwise in compliance with program requirements; e) a Fifth Disbursement of ($600,000) will be disbursed upon documentation of additional project costs totaling $14,475,850 ($72,379,250 cumulatively), and documentation of the employment of at least 577 Full-time Permanent Employees in New York State (Employment Increment of 29), provided Grantee is otherwise in compliance with program requirements; f) a Sixth Disbursement of ($600,000) will be disbursed upon documentation of additional project costs totaling $14,475,850 ($86,855,100 cumulatively), and documentation of the employment of at least 606 Full-time Permanent Employees in New York State (Employment Increment of 29), provided Grantee is otherwise in compliance with program requirements; g)a Seventh Disbursement of ($600,000) will be disbursed upon documentation of additional project costs totaling $14,475,850 ($101,330,950 cumulatively), and documentation of the employment of at least 635 Full-time Permanent Employees in New York State (Employment Increment of 29), provided Grantee is otherwise in compliance with program requirements; h) an Eighth Disbursement of ($745,140) will be disbursed upon documentation of additional project costs totaling $17,977,487 ($119,308,437 cumulatively), and documentation of the employment of at least 664 Full-time Permanent Employees in New York State (Employment Increment of 29), provided Grantee is otherwise in compliance with program requirements; Payment will be made upon presentation to ESD of an invoice and such other documentation as ESD may reasonably require. Expenses must be incurred on or after March 1, 2017, to be considered eligible project costs. All disbursements must be requested by April 1, 2027. 6. ESD may reallocate the project funds to another form of assistance, at an amount no greater than.$4,945,140, for this project if ESD determines that the reallocation of the assistance would better serve the needs of the State of New York. In no event shall the total amount of any assistance to be so reallocated exceed the total amount of assistance approved by the Directors. 7. In consideration for the making of the Grant, Grantee will achieve the Employment Goals set forth in Column B of the table below. If the Full-time Permanent Employee Count for the year prior to the reporting date set forth in Column A of the table below is less than eighty-five percent (85%) of the Employment Goal set forth in Column B (an "Employment Shortfall"), then upon demand by ESD, Grantee shall be obligated to repayto ESD a portion of each disbursement of the Grant, as follows: The Recapture Amount is based on the time that has lapsed between when the Grantfunds were disbursed and when the Employment Shortfall occurred. The Recapture Amountshall be calculated by aggregating the Recapture Amount for each disbursement of the Grant, which in each instance shall be equal to: (i) 100% of the disbursed amount if the Employment Shortfall occurred in the calendar year that the disbursement was made, or in the first full calendar year after the disbursement was made; (ii) 80% of the disbursed amount if the Employment Shortfall occurred in the second full calendar year after the disbursement was made; (iii) 60% of the disbursed amount if the Employment Shortfall occurred in the third full calendar year after the disbursement was made; (iv) 40% of the disbursed amount if the Employment Shortfall occurred in the fourth full calendar year after the disbursement was made; (v) 20% of the disbursed amount if the Employment Shortfall occurred in the fifth full calendar year after the disbursement was made. The Grantee's number of Full-time Permanent Employees shall be deemed to be the greater of the number as of the last payroll date in the month of December for such year or the average employment for the 12 month period computed by quarter. 7 Baseline Employment 1 433 A B Reporting Date Employment Goals February 1, 2023 433+Q+R+S+T+U+V+W+X February 1, 2024 433+Q+R+S+T+U+V+W+X February 1, 2025 433+Q+R+S+T+U+V+W+X February 1, 2026 433+Q+R+S+T+U+V+W+X February 1, 2027 433+Q+R+S+T+U+V+W+X February 1, 2028 433+Q+R+S+T+U+V+W+X Q = Grantee's Employment Increment that will be the basis of the First Disbursement of the Grant as described in section C.5 above (i.e. Q=29, and Employment Goals shall equal [433 + Q = 462] if the First Disbursement is made, in the year such disbursement is made and for each year thereafter). If the First Disbursement has not yet been made then Q=O. R = Grantee's Employment Increment that will be the basis of the Second Disbursement of the Grant as described in section C.5 above (i.e. R=28, and Employment Goals shall equal [433 + Q + R = 492] if the Second Disbursement is made, in the year such disbursement is made and for each year thereafter). If the Second Disbursement has not yet been made then R=O. S = Grantee's Employment Increment that will be the basis of the Third Disbursement of the Grant as described in section C.5 above (i.e. S=29, and Employment Goals shall equal [433 + Q+ R +S = 519] if the Third Disbursement is made, in the year such disbursement is made and for each year thereafter). If the Third Disbursement has not yet been made then S=O. T = Grantee's Employment Increment that will be the basis of the Fourth Disbursement of the Grant as described in section C.5 above (i.e. T=29, and Employment Goals shall equal [433+Q+ R+S+T=548] if the Fourth Disbursement is made, in the year such disbursement is made and for each year thereafter). If the Fourth Disbursement has not yet been made then T=O. U = Grantee's Employment Increment that will be the basis of the Fifth Disbursement of the Grant as described in section C.5 above (i.e. U=29, and Employment Goals shall equal [433 + Q + R + S + T + U = 577] if the Fifth Disbursement is made, in the year such disbursement is made and for each year thereafter). If the Fifth Disbursement has not yet been made then U=O. V = Grantee's Employment Increment that will be the basis of the Sixth Disbursement of the Grant as described in section C,5 above (i.e. V=29, and Employment Goals shall equal [433 + Q+ R + S + T+ U + V = 606) if the Sixth Disbursement is made, in the year such disbursement is made and for each year thereafter). If the Sixth Disbursement has not yet been made then V=O. W = Grantee's Employment Increment that will be the basis of the Seventh Disbursement of the Grant as described in section C.5 above (Le, W=29, and Employment Goals shall equal [433 +Q+ R +S+T+ U+V+ W = 6351 if the Seventh Disbursement is made, in the year such disbursement is made and for each year thereafter). If the Seventh Disbursement has not yet been made then W=O. X = Grantee's Employment Increment that will be the basis of the Eighth Disbursement of the Grant as described in section C.5 above (i.e. X=29, and Employment Goals shall equal [433+Q+ R + S + T + U + V + W + X = 664] if the Eighth Disbursement is made, in the year such disbursement is made and for each year thereafter). If the Eighth Disbursement has not yet been made then X=O. IV. Statutory Basis The funding was authorized in the 2015-2016 New York State budget and reappropriated in the 2016-2017, 2017-2018, 2018-2019, 2019-2020, 2020-2021, and 2021-2022 New York State budgets. No residential relocation is required as there are no families or individuals residing on the site. V. Environmental Review For the portion of the project in East Syracuse, the Town of DeWitt Planning Board, as lead agency, has completed an environmental review of the project pursuant to the requirements of the State Environmental Quality Review Act ("SEQRA") and the implementing regulations of the New York State Department of Environmental Conservation. This review found the project to be an Unlisted Action, which would not have a significant effect on the environment. The Town of DeWitt Planning Board issued a Negative Declaration on September 9, 2021. For the portion of the project in Cortlandville, the Town of Cortlandville Town Board, as lead agency, has completed an environmental review of the project pursuant to the requirements of SEQRA. This review found the project to be an Unlisted Action, which would not have a significant effect on the environment. The Town of Cortlandville Town Board issued a Negative Declaration on January 19, 2022. ESD staff reviewed the respective Negative Declarations and supporting materials and concurs. It is recommended that the Directors make a Determination of No Significant Effect on the Environment. VI. Non -Discrimination and Contractor & Supplier Diversitv ESD's Non -Discrimination and Contractor & Supplier Diversity policies will apply to this Project. The Recipient shall be required to include minorities and women in any job opportunities created, to solicit and utilize Minority and Women Business Enterprises (MWBEs) for any contractual opportunities generated in connection with the Project and shall be required to use Good Faith Efforts (pursuant to 5 NYCRR §142.8) to achieve an overall MWBE Participation Goal of30% related to the total value of ESD's funding. VII. ESD Financial Assistance Subiect to Availabilitv of Funds and Additional Approval The provision of ESD financial assistance is contingent upon the availability of funds and the approval of the State Division of the Budget. VIII. Additional Submissions to Directors Resolutions New York State Map Benefit -Cost Analysis Project Finance Memorandum 9 Byrne Capital East Syracuse Cortland c^N^u^ Onondaga and Cortland Co Project Summary Benefit -Cost Evaluation' Byrne Holdings, Inc. — Business Investment Benefit -Costs Evaluations are used in evaluating projects that are categorized as Business Investment, Infrastructure Investment, and Economic Growth Investment and that involve 1) job retention and/or creation and/or 2) construction -related activity. For Business Investment projects, benefits reported in the table below typically reflect the impact of both jobs and construction -related activity. For Infrastructure Investment and Economic Growth Investment projects, which generate long-term benefits not captured in the period of analysis and may involve no permanentjob commitments, the table typically reflects only construction -related activity. Benchmarks for each type of project are noted in the footnotes. Initial Jobs: 433 New Jobs: 231 over five years Project Results Evaluation Statistics NYS Gov't. Fiscal Costs3 Fiscal Benefits° Fiscal Cost /Direct Job Fiscal Cost/Total Jobs Fiscal B/C Ratio $4, 945,140 $10,077,139 $35,168 $17,635 2.04 Construction Job Years (Direct): Construction Job Years (Indirect) NYS Gov't. BenchmarkS2 $794,250 $2,085,600 $3,000 $1,424 7.00 Project Results Benchmarks Economic Benefits-, $131,929,911 $119,468,000 Econ. Benefits/Total Jobs $470,478 $147,600 Economic B/C Ratio 26.68 75.00 Project Results State & Local Government $4, 945,140 $17,551,588 $35,168 $17, 635 3.55 379 220 State & Local Government Benchmarks $1,020,500 $4,271,980 $4,110 $1,964 10.60 ' Dollar values are present value calculated over a seven-year period. Separate evaluations are made and reported for New York State government assistance alone and for State and Local government. ' The current project evaluation results (both fiscal and economic) are compared to performance measure benchmarks based on results of a sample of ESD non -retail projects. Business Investment project benchmarks are 7.00 (Fiscal) and 75.00 (Economic). Infrastructure Investment (or Economic Growth Investment) project benchmarks are 3.00 (Fiscal) and 30.00 (Economic). 3 Fiscal cost includes the value of grants, loans and associated default risks, and discretionary subsidies (such as tax exemptions or abatements on sales, property, and interest income). ' Fiscal benefits are the loan repayments and tax revenues to New York State and Local governments generated by project activity. This includes estimated taxes on personal incomes from project direct and indirect employment, corporate and business incomes, excise and user taxes, property taxes, and other taxes. 5 Economic benefits are estimated project benefits measuring fiscal flows to government plus net resident disposable income from project direct and indirect employment net of transfers, without adjusting for individual income earners' opportunity cost of employment.