AURELIUS | After two years of speculation and economic projections, a consortium of 27 local dairy farm owners is finally ready to break ground on a 106,000-square-foot milk processing plant in the Cayuga County Industrial Park in Aurelius.
The Cayuga County Industrial Development Agency capped the lengthy process Tuesday with a public hearing on the project and by approving a payment in lieu of taxes agreement with Cayuga Marketing, the investor group.
Bill Morgan, the co-chairman of the Cayuga Marketing board of directors and a partner in Scipio Springs Dairy, said the company has put out bids for excavation work at the 25-acre site and is ready to begin this fall.
The new facility will process 630 million pounds of milk each year into milk protein concentrates and skim milk powder, ingredients that food manufacturers use in a variety of products.
"Milk protein concentrates are used mostly in the food industry by the big companies such as General Mills, Kraft, even some of the yogurt companies today," Morgan said. "You will never be able to go into a grocery store in town and find something that says Cayuga Milk Ingredients on the label. We will be selling to those companies."
Morgan said the skim milk powder will be exported to meet growing demand in Asian markets.
CCIDA Director Steve Lynch said the new processing facility will have a profound impact on the local economy, projecting the creation of 52 new local jobs with a $3.3 million total payroll in the first year.
The company also aims to build a $30 million facility and add $57 million worth of dairy processing and manufacturing equipment over 18 to 24 months.
"It will serve as an anchor tenant at the county industrial park and will be a catalyst — I hope — for attracting new value added manufacturing processors to Aurelius and Cayuga County," Lynch said.
The $110 million in projected annual revenues from the milk products will double when circulating in the local economy, Lynch estimated.
The 23-year PILOT approved Tuesday sets the tax rate on the 25-acre property at $24.76 per $1,000 of assessed value, the current combined county, town and school district rate, and increases the rate by 2 percent each year.
The base land value of the parcel will be fixed at $522,270, and the value of the facility will be set at $30 million when completed and follow a set depreciation schedule.
Lynch said the PILOT and the sales and use tax exemptions granted to the company will result in $14.4 million in savings to Cayuga Marketing and will generate a $4.4 million increase in revenues to the taxing jurisdictions when compared to the same agency-owned land without development.
The tax benefits make the Aurelius site more competitive to other industrial parks in the state by addressing a federally mandated purchase price differential and by helping the company conduct $2.8 million in required NYSEG electric utility infrastructure improvements.
Last year the company was awarded a $4 million state grant through the Central New York Regional Economic Development Council and last month the CCIDA made $30 million in tax exempt bonds available to the company to help pay for sewer improvements.