In a business park off Route 5 in the Town of Batavia, a burst of development is unfolding.
Alpina Foods will soon open a $20 million yogurt plant. Nearby, Muller Quaker Dairy, backed by PepsiCo, is building a $206 million yogurt plant on track to open in summer 2013.
The focal point of this activity is the Genesee Valley Agri-Business Park, about halfway between Buffalo and Rochester. The two plants are expected to employ more than 230 people combined, and the job number could go higher.
These kinds of projects - that depend on tons of milk from area farms and draw global attention to the region - don't come along every day, which is why area officials spent about nine years laying the groundwork to ensure a site would be ready when opportunities arose. About $8 million was spent acquiring land to form the park and adding infrastructure suitable for food processors, said Steven G. Hyde, president and chief executive officer of the Genesee County Economic Development Center.
"You have to remind people that strategic initiatives and rebuilding an economy in upstate New York doesn't happen overnight," Hyde said. And without a true "shovel-ready" site to promote, "the site selector, the corporate real estate people just check you off and they're on down the road."
The long-term process started with creating a strategy to capitalize on the area's strengths, including its Thruway access and close proximity to both Buffalo and Rochester. Three industries were targeted: food processing and agribusiness; medical technology and life sciences; and nanotechnology advanced manufacturing.
Along came an opportunity from Colombia-based Alpina, which was looking for a place to build its first U.S. factory to make yogurt products. The company wanted a site to serve the Northeast market, with an ample milk supply to draw from, Hyde said. As Alpina narrowed its list, the Batavia park emerged as a finalist, along with two locations in Pennsylvania.
"At that point in the game, the key you want to do is get to a site visit, because then you can get into show-and-tell, and you can really sell and build relationships and demonstrate the power of our region," Hyde said.
The Batavia site prevailed, and business recruiters soon found themselves competing for another project, which turned out to be the Muller Quaker Dairy plant.
Hyde believes his part of upstate is well-suited for manufacturing - food production, in these two particular cases - and benefits greatly from being marketed by Buffalo Niagara Enterprise and its counterpart to the east, the Greater Rochester Enterprise.
Both Buffalo and Rochester, in turn, benefit from companies that locate in the Batavia area, through jobs or supplier relationships, he said. Alpina received 525 applications from eight counties for the 30 production jobs it is initially filling.
Hyde promotes the assets available in both the Buffalo and Rochester regions. "When we marry Buffalo and Rochester together, we can compete with bigger metros around the country and that was a difference maker on both of these [yogurt] projects, because we were competing against Pennsylvania. We were able to show we've got a better site, better work force, a better, more sustainable dairy supply and a strong incentives package that made New York competitive."
Educational institutions, including Cornell University, the Rochester Institute of Technology and Genesee Community College, have played a role, by developing resources like degree programs to bolster the local pitch, said Rachael Tabelski, the county economic development center's communications manager. "They're literally at the table when we have these meetings."
The Genesee County Economic Development Center used a similar teamwork approach to pursue the Muller Quaker Dairy plant, a project backed by PepsiCo and Muller, a German multinational dairy company based in Luxembourg. Economic development agencies and other advocates pressed for the Batavia park to get serious consideration, after the site was initially put on the "B" list of options, Hyde said. Their persistence paid off early this year, when Muller Quaker announced Batavia as its choice. Local officials delivered a swift permitting process to allow construction to move quickly.
When complete next year, the 363,000-square-foot Muller Quaker plant will be one of the biggest yogurt plants in the country. PepsiCo said the location will be the driving force for its push into the yogurt business.
Batavia has tapped into an emerging growth industry in New York state, thanks in part to thousands of cows in the surrounding area. Yogurt production has soared to the point where Gov. Andrew Cuomo recently held a "yogurt summit," to assess how New York state's milk supply could keep pace with demand. Plans are in the works to change a state regulation, to remove a cost barrier to dairy farmers who want to increase the size of their herds. The popularity of Greek-style yogurt, which requires more milk that traditional yogurt, should generate an additional benefit for the farmers.
Tax breaks needed
Incentives from the state and local levels were another key to securing the Alpina and Muller Quaker projects, to prevail over offers in competing states, Hyde said. The Muller Quaker project is receiving about $12 million in sales and property tax savings from the county, and about $14.3 million in various incentives from8 the state.
"When they're making millions of dollars in investment, taking big risks and hiring people, guess what, you've got to ramp them up [gradually] to full property taxes. You can't hit them in the head with 100 percent property taxes when they're making all those investments and taking all those risks. So what you do is, you ramp them up over a period of years."
Yogurt plants are not the only development in the 212-acre Genesee Valley Agri-Business Park. Marktec, a maker of equipment for the food-processing industry, has opened a location, and Genesee Valley Mushroom plans to build a $20 million operation at the site. As the park fills up, it could be expanded by as many as 100 additional acres.
The Batavia area is seeing other types of business growth, through cultivating smaller employers, as well.
The Batavia Industrial Center, a former factory on Harvester Avenue that was converted into what is regarded as the original business incubator, has been nurturing businesses with shared services and inexpensive rent for more than 50 years. Some of its tenants "graduate" and move into larger space of their own.
"It's always bittersweet when they leave," said B. Thomas Mancuso, president of Mancuso Business Development Group. "They sort of help pay the bills while they're here, but what we're really here for them to do exactly what they did."
And the Batavia Industrial Center seems to have appeal regardless of where the economy is headed, he said.
"We're busy both ways," Mancuso said. "We're busy when it's good, because people are optimistic and confident. We're busy when it's bad because people have been out of a job, or cut loose."
Mancuso said Batavia has a long history of private-sector leadership in economic development, as well as converting old buildings to new uses. The incubator complex represents both approaches.
Mancuso is also trying to attract tenants to Masse Place, a project next to the incubator complex which is aimed at meeting a specific need. "There was a gap in the local market for flex space," he said, referring to a combination of warehouse and office space.
As active as the Genesee Valley Agri-Business Park is, Hyde also has high hopes for yet another proposed park, known as Western New York STAMP, that has undergone several years of planning. (STAMP is short for Science and Technology Advanced Manufacturing Park.) The park would consist of more than 1,243 acres, five miles north of the Pembroke interchange of the Thruway, in the Town of Alabama. The goal is to attract large-scale operations in industries like semiconductors or bio-manufacturing, with massive plants and huge work forces.
"They want to be in a campus-like setting, so it needs to be built high-tech for creative class-type workers," Hyde said. Because many of these operations are vibration-sensitive, they prefer building on "greenfields" that are away from rail or interstates that create a lot of traffic. At the same time, the Alabama site is close to the types of infrastructure the employers would require.
These kinds of companies typically want to have suppliers within an hour ring of their campus, a point which has Hyde thinking regionally.
"So think about the multiplier effect into Buffalo and into Rochester if we can land an anchor mega-nanoscale factory."