August 2020 – Rescheduled Special — 08052020-OCIDA-Board-Special-Meeting-Board-Packet-Condensed.pdf ================================================================================ ONONDAGA COUNTY INDUSTRIAL DEVELOPMENT AGENCY 333 WEST WASHINGTON STREET, SUITE 130, SYRACUSE, NY 13202 PHONE: 315.435.3770  FAX: 315.435.3669  WWW.ONGOVED.COM Special Meeting Agenda August 5, 2020 1:00 PM Call to Order the Special Meeting of the Agency A. Conflict of Interest Action Items 1. Ultra Dairy Phase I Expansion (3101-20-14G): Second Meeting Ultra Dairy is proposing to construct an approximately 22,500 of additional manufacturing, storage and cooling space adjacent to the existing operation in the Town of Dewitt. Agency Action Request: a. A Resolution of the Board authorizing the financial assistance the Agency will provide. Agency benefits requested include a Payment in Lieu of Tax Agreement and Sales Tax Abatement. b. A Resolution of the Board authorizing a waiver from the Local Access Policy only for the highly specialized ammonia refrigeration systems associated with Ultra Dairy’s cooling systems. Representative: James Gosier, General Counsel, Byrne Dairy 2. Legal Advise Session Adjourn 1 Onondaga County Industrial Development Agency Project Summary 7/14/2020 1. Project Ultra Dairy, LLC (Aseptic Processing 2020 Expansion) 2. Project Number 3101-20-14G 3. Location Dewitt 4. School District ESM 6. Project Type Expansion 5. Tax Parcel(s) 042.-13-05.1 Village 0 7.Total Project Cost $ 28,537,023 8. Total Jobs 262 Land $ - 8A. Job Retention 198 Site Work $ 606,000 8B: Job Creation 64 Building $ 11,650,682 (Next 5 Years) Furniture & Fixtures $ - Equipment $ 15,539,541 Equipment Subject to NYS Production Exemption $ - Engineering/Architecture Fees $ 601,000 Financial Charges $ - Legal Fees $ - Other $ 139,800 Cost Benefit Analysis Ultra Dairy, LLC (Aseptic Processing 2020 Expansion) Project Description Fiscal Impact ($) Abatement Cost $624,336 Sales Tax $400,000 Mortgage Tax $0 Property Tax Relief (PILOT) $224,336 New Investment $166,773,185 PILOT Payments $448,627 Project Wages (10 years) $136,438,785 Ultra Dairy is proposing to expand its existing facility by adding approximately 22,000 sq. ft. of Construction Wages $3,627,500 aseptic processing area. Employee Benefits (10 years) $13,643,878 Project Capital Investment $12,256,682 New Sales Tax Generated $0 Agency Fees $357,713 Benefit:Cost Ratio 267 :1 Ultra Dairy, LLC (Aseptic Processing 2020 Expansion) 7/7/2020 A) PILOTS Estimate Table Worksheet for 12 years OCIDA estimate of current market value $ 8,850,000 Projected investment $ 11,650,682 OCIDA estimate of increase in value $ 770,000 OCIDA estimated value after project is completed $ 9,620,000 Taxes that would have been collected if the project did not occur $ 4,514,839 Scheduled PILOT payments $ 4,661,977 PILOT YEAR PILOT Year Full Tax Onondaga East Syracuse- (Town and (School Exemption % Dewitt Total PILOT Payment w/o Net Exemption County Minoa County) District) PILOT 2022 2021-2022 100% $ 35,238 $ 32,570 $ 173,075 $ 240,883 $ 268,580 $ 27,697 2023 2022-2023 100% $ 39,101 $ 36,141 $ 192,047 $ 267,288 $ 295,539 $ 28,251 2024 2023-2024 100% $ 45,549 $ 42,100 $ 223,713 $ 311,361 $ 340,177 $ 28,816 2025 2024-2025 90% $ 52,669 $ 48,695 $ 258,665 $ 360,029 $ 386,482 $ 26,453 2026 2025-2026 80% $ 54,970 $ 50,837 $ 269,947 $ 375,754 $ 399,738 $ 23,984 2027 2026-2027 70% $ 57,342 $ 53,045 $ 281,577 $ 391,964 $ 413,370 $ 21,406 2028 2027-2028 60% $ 59,787 $ 55,322 $ 293,564 $ 408,672 $ 427,387 $ 18,715 2029 2028-2029 50% $ 62,306 $ 57,667 $ 305,918 $ 425,891 $ 441,799 $ 15,908 2030 2029-2030 40% $ 64,903 $ 60,085 $ 318,648 $ 443,636 $ 456,617 $ 12,981 2031 2030-2031 30% $ 67,578 $ 62,576 $ 331,765 $ 461,920 $ 471,850 $ 9,930 2032 2031-2032 20% $ 70,335 $ 65,143 $ 345,281 $ 480,759 $ 487,511 $ 6,752 2033 2032-2033 10% $ 72,246 $ 66,930 $ 354,642 $ 493,818 $ 497,262 $ 3,444 $ 682,023 $ 631,112 $ 3,348,842 $ 4,661,977 $ 4,886,312 $ 224,336 Year 2020 2021 2022 2023 2024 2025 Job Targets Creation Goals 49 15 0 0 0 Total Employment Goals 198 247 262 262 262 262 This PILOT Schedule replaces all previous PILOT schedules regarding the associated parcels Statement in Support of the Application of Ultra Dairy, LLC for Economic Benefits from The Onondaga County Industrial Development Agency Section I (G): Ultra Dairy, LLC (“Ultra”) was formed in 2003 as part of the Byrne Dairy family of companies. Ultra produces high quality dairy and non-dairy food products utilizing Ultra High Temperature (UHT) technology that results in extended shelf life (ESL) products. Ultra produces a variety of milk, cream and non-dairy products having shelf lives from 70 – 180 days. Ultra ships 92% of its finished products out of New York State for wholesale and retail sale. Section I (H): As a processor of milk and cream products, Ultra’s biggest raw material by far is milk and cream, much of it from local farms. Ultra works with family farms throughout Central New York and the Finger Lakes regions. Six of the largest farms Ultra works with are located in Onondaga County. As of May 31, 2020, Ultra had purchased nearly $48 million in milk and cream in 2020. Examples of local vendors and raw material suppliers are as follows: Vendor Location Material/Service Spend YTD (as of 5/31/20) Various Farms Varies Raw Milk/Cream $47,800,000 Sweeteners Plus Lakeville, NY Sweeteners $ 2,313,000 Packaging Corp. Of America Solvay, NY Corrugate $ 2,181,000 CHEP Liverpool, NY Pallets $ 905,000 Section I (J): Since 2003, Ultra has been a party to a Payment in Lieu of Taxes (PILOT) Agreement with the Onondaga County Industrial Development Agency (OCIDA). Additionally, Ultra has requested and received exemptions from the NYS Mortgage Recording tax from OCIDA as part of it credit facilities with its lenders. Section II(C): See Section II(D) below. Section II (D): Ultra is situated on 22 +/- acres of land in the Town of Dewitt bounded by Fly Road on the West and I-481 on the East. Ultra is proposing to expand its existing 138,000 sq. ft. facility by adding approximately 22,000 sq. ft. of aseptic processing area. Aseptic processing involves sterilization of the product and packaging which in turn allows for shelf life of up to one year without refrigeration. This advanced technology results in products that can be shipped across the United States and around the world. The ability to manufacture these products is particularly important in times like these when supply chains are stressed. This project will involve capital expenditures of approximately $28.5 million and will create a total of 64 new full time jobs. It is also anticipated that approximately 150 construction jobs will be created. Construction and equipment installation will take approximately 9 – 10 months. Economic benefits from OCIDA in the forms of real property tax abatement (PILOT) and Sale and Use Tax exemptions are extremely important to the viability of the proposed project. A PILOT Agreement will provide Ultra with a steady and predictable vehicle for the payment its share of local services. Additionally, Ultra anticipates that it will expend approximately $4.3 million on goods, materials and services that would otherwise be subject to state and local sales taxes. Exemptions from these taxes will allow Ultra to invest more of its own money into the project.