Americold gets tax break, agrees to help fund road repair
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A newly constructed freezer plant in Dunkirk is getting some financial assistance as it refinances its mortgage. In exchange, the company has agreed to help fund repairs to a local road.
Back in 2021, Americold Freezer, LLC was approved for a Payment In Lieu Of Taxes agreement by the Chautauqua County Industrial Development Agency when it looked to construct its plant on 20 acres of land off of Williams Street. In exchange, the company said it would be spending more than $41 million to build the plant and would be employing at least 60 people by 2028.
That total was later reduced to a minimum of 40 people. There were 25 people working there last spring.
The PILOT was for real property tax exemptions, where Americold agreed to make specific payments to the affected taxing jurisdictions. They also were given a sales tax exemption on construction materials and equipment.
For new industries such as this, the county IDA typically offers a mortgage tax exemption. However at the time, Americold declined that exemption because it was not taking out a mortgage on the property.
During the August county IDA Board of Directors meeting, IDA Chief Executive Officer Mark Geise said that the business has done a companywide refinancing and is now taking out a mortgage on the facility.
Because of the mortgage, Americold requested the mortgage tax exemption, which it was first offered but had initially declined.
The factory is valued at $50 million. According to attorney Milan Tyler, with the county IDA, the exemption would be a savings to Americold of $625,000.
In order for the county IDA Board of Directors to be able to vote on the proposal, a public hearing needed to be held, which took place Aug. 11.
At that public hearing, Dunkirk Town Supervisor Shari Miller expressed her objections on behalf of herself as well as other members of the town board.
She specifically referenced damage to William Street, which the town maintains. "Since Americold has been in their location, we've had repeated problems with infrastructure of the road, due to semis pulling off to the side of the road and breaking down the edges of the roadway," she said.
Miller estimated that the damage is running between $7,000 to $10,000 annually.
At the county IDA meeting, Geise said although it's not required, it's the IDA's policy to not offer tax exemptions if a local municipality objects.
Geise said the two sides were negotiating. He proposed a resolution that would allow Americold get the mortgage tax exemption but said he wouldn't file it until got assurances from the town of Dunkirk that their concerns were addressed.
IDA board member Dan DeMarte proposed modifying the resolution, saying that written communication would be required from Miller saying she no longer objected to the exemption.
That resolution passed unanimously.
Immediately after the IDA meeting, The Post-Journal/OBSERVER contacted Miller to see if she was in support of the mortgage tax exemption. At that time, she said she was still in opposition.
A week later, Miller sent The Post-Journal/OBSERVER an email and said the town board was no longer in objection.
"An agreement has been reached between the Town and Americold, whereby the company will provide a fund of monies, which the Town will use to repair and maintain roadway and shoulders damaged by large, heavy, delivery vehicles servicing the Americold facility on Williams St," Miller wrote. "Additionally, Americold will work as a partner in approaching the NYS DOT (Department Of Transportation) on installing a light at the intersection of Williams St. and Bennett Road."
Tyler said at the August meeting, Americold did not want to wait until the end of September for a resolution due to the timing of them getting a mortgage.
Earlier this year, Americold brought on an outside investor.
In a news release dated May 7, it was announced that Americold Realty Trust, Inc., a global leader in temperature-controlled logistics, and EQT, a purpose-driven global investment organization, had formed a new joint venture with EQT's Active Core Infrastructure fund, focused on the ownership, operation, and potential development of high-quality cold storage warehouse facilities in North America.
Under the terms of the agreement, Americold would contribute 12 cold storage facilities to the joint venture with an aggregate value in excess of $1.3 billion at inception. The facilities are located across the United States and comprise a total of approximately 124 million cubic feet of temperature-controlled capacity, with over 400,000 combined pallet positions.