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Kraft seeking PILOT for proposed Lowville plant expansion

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LOWVILLE — Kraft Foods is seeking a payment-in-lieu-of-taxes agreement for a possible expansion project at its Utica Boulevard cream cheese manufacturing plant.

The Lewis County Industrial Development Agency recently adopted an inducement resolution for a 15-year PILOT with Kraft Foods Global Inc. on a proposed 52,500-square-foot warehousing/handling addition. A public hearing has been set for 10 a.m. Aug. 14 at the IDA office, 7642 N. State St.

Final approval would still be needed at a future IDA board meeting.

“Under the scenario, all the taxing jurisdictions benefit, and the community benefits by the retention of 300 jobs,” said Richard H. Porter, Lewis County IDA executive director.

While Kraft is not promising more jobs with the expansion project, it would help retain current jobs at the manufacturing facility and should increase truck traffic and the milk supply needed at the plant, Mr. Porter said. The project, if undertaken, also would provide construction jobs on a temporary basis, he said.

Under the PILOT plan, taxation of Kraft’s existing 240,550-square-foot facility — now assessed at $7.75 million — would remain unchanged.

However, on the proposed $4 million to $8 million addition, the company would pay 25 percent of full taxes in the first five years, 50 percent in the second five and 75 percent in the final five. The addition then would be subject to full taxation in the 16th year.

The PILOT also would be variable, meaning payments would be based on each year’s full-value tax rates for the village and town of Lowville, Lewis County and the Lowville Academy and Central School District.

Under a scenario in which Kraft builds a $5 million addition and tax rates remain at 2012 levels for the duration of the agreement, the company over the next 15 years would pay out an additional $1,074,002; that would be half the taxes due on such an addition with no PILOT agreement in place.

A public hearing is required because the plan deviates from a standard IDA PILOT agreement and the projected benefits exceed $100,000.

“They’ve been excellent to work with,” Mr. Porter said of Kraft. “Being a good corporate citizen is number one in their book.”

The four involved taxing jurisdictions have been notified of the proposal, he said.

Kraft has yet to submit site plans to the village for any expansion project.

In response to a request for further information on the proposal, a Kraft spokeswoman said by email that she was looking into the inquiry but would not have anything Tuesday.

The Lowville facility opened in 1971 and is the largest of Kraft’s cream cheese plants.

The Lewis County IDA also has set a public hearing for 9 a.m. Aug. 14 at the Martinsburg town office on Cemetery Road on PILOT modifications for the proposed 39-turbine Roaring Brook Wind Farm.

Atlantic Wind, a subsidiary of Iberdrola, is proposing a 78-megawatt wind farm on 5,280 acres just south of Maple Ridge Wind Farm.

The original PILOT agreement, adopted in 2010, stipulated that commercial operation begin by Dec. 31, 2013. The amended plan, already approved by local taxing jurisdictions, would remove that end date, insert language showing that the wind developer is not able to make any representations on when the project will be completed and give the company the option of seeking a mortgage tax exemption through the IDA.

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