The Erie County Industrial Development Agency approved just over $12 million in tax breaks to support construction by Upstate Niagara Cooperative of a major $255 million expansion that will allow the dairy company to double its production of Greek yogurt and cottage cheese to meet consumer demand.
The Lancaster-based, farmer-owned company – which now operates as UNC Dairy – plans to construct a 165,834-square-foot addition to its 222,851-square-foot plant, built in 2005 and located at 3200 North America Drive in West Seneca.
That’s actually a big 33% reduction in size from an earlier plan for a 250,000-square-foot expansion that was originally projected at $150 million when it was first proposed, but which became prohibitively expensive because of rising material costs and some new and unexpected expenses, such as the need to add a new $1.5 million sewer line in the business park. The prior projection was also based on rough estimates that changed dramatically as bids came in.
Those factors drove building costs up by over $33 million while manufacturing equipment prices increased $71 million. So UNC scaled back its plans by eliminating some vacant space that was reserved for future development, reducing the size of a filling room, trimming the number of production lines to save space, and opting not to construct a fully automated cooler space.
The company still pledged to retain 240 jobs and create another 130 within two years.
The project was approved by the town board on Sept. 8, and the company also received $3 million in Empire State Development grants. It was awarded 4.2 megawatts of low-cost hydropower from the New York Power Authority’s Niagara Power Project on Tuesday. Completion is expected by March 2027.
Even with its downsizing, the project will still result in a big increase in production, but at a much higher cost. So UNC upped its tax-break request from $9.9 million to $12 million, including the addition of a $1.9 million mortgage-recording tax break that it wasn’t seeking originally, plus $6.1 million in sales tax savings and $4 million in property tax relief.
Reach Jonathan D. Epstein at (716) 849-4478 or jepstein@buffnews.com.
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Jonathan D. Epstein
News Business Reporter
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