By L. Michael Treadwell
Operation Oswego County and the County of Oswego Industrial Development Agency administer a variety of programs and initiatives targeted to manufacturing businesses, both small and large, looking for financial and property development assistance for a project.
Operation Oswego County (OOC) is a Small Business Administration (SBA) certified development company and is authorized to finance projects using the SBA 504 loan program, which is designed to promote economic development growth and job creation in small businesses.
The program can make the overall financing structure for a new or expanding manufacturer more attractive and affordable. The SBA 504 program offers accessible, fixed-rate, long-term financing for land, buildings and equipment. This program is available for businesses with less than 500 employees and can finance up to 40% of the fixed assets up to $5.5 million, with some minimum job creation and retention requirements. This program is attractive due to the low business equity requirement of 10%, allowing up to 90% financing between the SBA and a participating bank.
For very small manufacturing businesses, whose owner has completed the Micro Enterprise Training Program (MEP), there is the MEP loan. This financing program is ideal for very small businesses with five or less employees. This program can finance up to $25,000 of business expenses and can be used for a variety of uses, including real estate, machinery, equipment and working capital. If an eligible manufacturing project requires a larger funding pool, the MEP loan can be used in conjunction with other financing options. This program is administered by the County of Oswego IDA (COIDA).
COIDA also administers several Economic Development Fund (EDF) programs that were designed to create and retain jobs through the expansion of existing or creation of new businesses, to increase the County’s tax base, to help diversify the county’s economic base, and to improve the quality of life in Oswego County. COIDA EDF financing may be used to purchase machinery and equipment, inventory or to provide working capital. When used to purchase machinery and equipment, the funds are typically structured in the form of a lease. Financing from EDF programs are between $50,000 and $250,000, but can be smaller based on need.
Examples of manufacturing businesses who have benefited from COIDA EDF funding include: K&N’s Foods USA in Fulton; HealthWay Home Products in Richland; United Wire Technologies in Constantia; Universal Metal Works in Fulton; Marmon Enterprises in Williamstown; Design Concepts & Enterprises in Hastings; and R&D Design and Associates in Schroeppel.
Another loan program used by COIDA is the USDA Intermediary Relending Program (IRP). The IRP program offers short-term, fixed rate loans. This is a unique program that was capitalized by the agency borrowing funds from the U.S. Department of Agriculture and relending these funds to eligible businesses. Similar to the SBA 504 program, the IRP requires a minimum 10% cash equity into the project and the IRP funds cannot fund more than 50% of the project cost. IRP loan proceeds may be used to purchase machinery and equipment, inventory, or to cover soft costs, start-up costs and working capital. Loans can be made with IRP funds as small as $20,000 and up to $250,000. The IRP financing program is targeted to the more rural areas of Oswego County outside the cities of Oswego and Fulton.
Local manufacturers that have used the IRP program include Designer Hardwood Flooring in Williamstown; Fulton Tool in Fulton; Universal Metal Works in Fulton; and, D&D Logging & Lumber in Palermo.
COIDA may also provide financial assistance to qualified manufacturing business applicants in the form of issuance of tax-exempt or taxable revenue bonds or by participation in straight lease transactions for purposes of conferring real property tax, sales and use tax, and/or mortgage recording tax exemptions. These tax incentives are known as a payment in lieu of tax, or PILOTs for short. The length of the value of property tax abatement benefits for manufacturing projects according to COIDA’s uniform tax exempt policy is 20 years.
Manufacturers that have utilized the agency’s straight lease transaction incentives to grow and expand their businesses or to establish a business in Oswego County include the following: Novelis Corporation in Scriba; Huhtamaki in Fulton; EJ USA in Schroeppel; Felix Schoeller in Richland; LeRoi in Oswego; Pathfinder Industries in Fulton); and SAM North America in Schroeppel.
OOC offers technical assistance to manufacturing businesses wishing to submit a NYS Consolidated Funding Application (CFA) through the CNY Regional Economic Development Council. This single application provides applicants access to multiple state funding sources including Empire State Development grants and the Excelsior Tax Credit program. Currently, round 12 of the CFA is open for applications until 4 p.m., July 29.
These programs help to provide the means for eligible Oswego County businesses, large and small, to secure the financing and incentives they need to expand and grow. The programs can also be used to help a firm remain competitive thus helping to retain and maintain jobs in the County.
In an effort to further support manufacturing growth in Oswego County, the COIDA has developed plans and purchased land on the former Nestle site in the city of Fulton for a manufacturing start-up facility. It will house one or more small manufacturers at any given time and will provide them space to get established or grow. The intent is that they will graduate from the start-up facility and expand into a building of their own within Oswego County.
COIDA has also contributed to further manufacturing growth in Oswego County by purchasing 185 acres of land adjacent to the existing Oswego County Industrial Park in the town of Schroeppel. The purchase doubled the size of the industrial park, which was nearly at capacity, and will provide the necessary space and infrastructure for larger industrial projects.