It's a tough time of the year for people to lose jobs, said Steve Hyde, CEO of the Genesee Economic Development Center, but there is a silver lining on the dark clouds hanging over the Quaker Muller Dairy Plant.
A large dairy processing organization is close to closing a deal to purchase 320,000-square-foot plant, which cost PepsiCo and Muller Group an estimated $200 million to build.
"We expect it won't take long and they will employ lots of folks," Hyde said. "Probably more than Muller Quaker and it will be good for Western New York dairy farmers."
While details of the plant closing are not available, some sources indicate it won't close immediately, even so, right before Christmas is a hard time to hear you might be out of a job soon, Hyde acknowledged.
"It is a sad day, especially this time of year, and we're all very sad about it, but there is a silver lining," Hyde said.
The GCEDC is already working with the Job Bureau to find suitable replacement jobs for Muller Quaker employees, along with job search assistance and transition training, Hyde said. There may be a job fair to assist workers. Hyde noted there are a lot of local job openings right now.
While Pepsi and Muller made a substantial investment in the plant, they did so with the backing of the state and the local IDA. The state promised Pepsi/Muller some $14 million in tax credits, but those tax credits were contingent on meeting specific job creation goals.
Quaker Muller never went beyond its Phase I goals, which was a bit less than 200 jobs, Hyde said, so the company received "only a fraction" of the anticipated tax credits though Hyde did not have the exact amount of tax credits awarded immediately available.
The project was also eligible for $11 million in tax abatements related to the improvement of the former farm field, mostly in the form of a Payment in Lieu of Taxes on the increase in assessed value. Such tax abatements are not a direct subsidy but are only realized if the project is built and the property tax assessment goes up. The next owner, assuming there is one, will inherit the PILOT.
There were also federal grants that have gone into the creation of Genesee Valley Agri-Business Park that did not directly benefit Quaker Muller, but provided infrastructure, such as sewer and roads, to make the plant construction possible.
Hyde said it's impossible to say, at this point, when this dairy processing organization might complete its acquisition of the plant, but he is optimistic the deal will go through.
UPDATE 6:15 p.m.: Empire State Development has issued the following statement: “Empire State Development will be working with the new plant owner, DFA (Dairy Farmers of America), to restart operations soon.”
UPDATE 6:20 p.m.: Assemblyman Steve Hawley said he was briefed on the plant closing last night and only recently learned of DFA's purchase plans. He's hoping DFA will rehire the displaced Muller workers. "I'm not sure what the future holds, but we're moving forward and I hope this shutdown is short term."
UPDATE: Statement from DFA: "DFA has agreed to acquire the Muller-Quaker Dairy Plant in Batavia, NY. The acquisition is a strategic one for DFA as it is in an important milkshed for us. This facility creates multiple potential milk handling and dairy manufacturing opportunities. We are currently exploring these."