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Lowville Kraft PILOT plan elicits few, but positive, comments

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LOWVILLE — A payment-in-lieu-of-taxes agreement for a possible expansion project at the Kraft Foods plant elicited few, but positive, comments Tuesday.

“We are very excited for Kraft to have this proposal on the table,” Lewis County Industrial Development Agency Executive Director Richard H. Porter told a handful of people who attended a public hearing on the proposed 15-year PILOT plan.

Lowville town Supervisor Randall A. Schell said he would support any projects that would retain jobs here. The plan could help avoid future assessment challenges by Kraft, he said.

The IDA board likely will vote on the PILOT — intended to cover taxation on a proposed 52,500-square-foot warehousing/handling addition — at its 8 a.m. Sept. 6 meeting.

While Kraft is not promising more jobs with the expansion, company officials say it would help retain nearly 300 current jobs at the Utica Boulevard cream cheese manufacturing facility.

Under the PILOT plan, taxation of Kraft’s existing 242,590-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.

Officials at the Kraft facility are eying a “multi-phased” project including refrigerated warehouse expansion, physical plant upgrades in roofing and systems like heating, ventilation and air-conditioning and technology improvements in equipment and packaging, said plant manager Marc Page.

Mr. Page said it would be premature to give a project timetable or even exact dimensions or information on the proposed addition.

However, both he and Daniel Breen of Grant Thornton LLC, New York City, which is assisting with the project, said that having a tax plan in place would help make a better case for Kraft to fund the proposed improvements, allowing the plant to win an internal competition for corporate capital funding.

“It will help secure the long-term future of the plant,” Mr. Breen said.

He indicated that local officials and Empire State Development have supported the Lowville Kraft project.

Plans by CH4 Biogas to site a manure and food-waste digester facility here that would provide low-cost power to the plant have no connection to the proposed plant expansion, Mr. Page said.

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

The Lewis County IDA on Tuesday also held a public hearing on PILOT modifications for the proposed 39-turbine Roaring Brook Wind Farm, but there was no public comment.

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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