Some potential buyer of the now-shuttered Alpina property in the Genesee Valley Ag Park is going to pick up an ultramodern dairy plant for a relative song, according to the man tasked with finding a buyer.
And it will sell soon, said Aaron Morgenstern, managing director of Harry Davis & Company, the firm handling the real estate listing.
"It's an opportunity that doesn't come along often," Morgenstern said. "I would expect we'll soon find a buyer. I'm 100-percent confident that it will be sold soon and I'll be surprised if it's July 4 and we're still talking about who will buy the plant."
Harry Davis & Company specializes in valuing dairy companies and handling dairy plant and operations sales. The company helped in the sale of the former Muller Quaker Dairy plant in Batavia when HP Hood acquired it from Dairy Farmers of America.
Alpina acquired the land and built the plant for $20 million in 2012. Over the next six years, Alpina invested another $50 million in buying more land in the ag park, adding equipment, including equipment for liquid yogurt production, and adding onto the facility in anticipation of increased production.
The fully automated plant will help the company that acquires it control labor costs; at full capacity, Morgenstern would expect the plant to employ about 100 people.
"Our goal is to find a new operator who will bring jobs back to the area and grow the facility to its full capacity," Morgenstern said.
Morgenstern said he couldn't disclose the asking price for the plant but said it's substantially less than the $70 million that Alpina invested.
"The value proposition is that this an opportunity for somebody not currently in New York State to get into one of the premier milk sheds in the United States," Morgenstern said. "Or it's an opportunity for somebody in New York to continue to capture this milk shed with a brand-new ultramodern facility."
Morgenstern said he's received about three dozen inquiries about the property from serious potential buyers since the plant went on the market last week.
In 2012, Alpina, based in Colombia, received $767,096 in tax incentives to build its first U.S. plant in Batavia. A large portion of those tax incentives was in the form of a PILOT -- Payment In Lieu Of Taxes -- in which Alpina paid a fee in exchange for reduced taxes on the increase in assessed value of the property. The amount of taxes due to the increase in assessed value graduates upward over the years, from zero percent the first year, to about 50 percent today.
The assessed value of the property $168,000 (commercial properties are assessed differently than residential properties to account for the depreciation of commercial buildings). CORRECTION: When looking at assessments, we only looked at one parcel. There is another parcel that Alpina owns with an assessed value of $4.2 million.
Jim Krencik, spokesman for the Genesee County Economic Development Center, said the GCEDC board has the option, under the PILOT agreement, to adjust the agreement, or even cancel the PILOT, to increase the tax bill to 100 percent of assessed value.
A potential pitfall of canceling the PILOT is that a new owner would not be eligible for a continued tax abatement. The board keeps the PILOT in place but adjusts the taxable amount, another company could get a new PILOT agreement. A canceled PILOT agreement potentially makes the property less marketable.
The Batavian contacted four of the five current GCEDC board members and all said they wanted to reserve comment on the status of the PILOT until they had more information.
The board doesn't meet again until February and the time period for making a decision about the future of the PILOT is February and March.
"As we move forward with the site, I’m keeping in mind that any decision regarding the PILOT is within a larger effort to continue to bring more capital investment and job growth at the Alpina site, the Ag Park and Genesee County," Krencik said.
If the amount of taxes due under the PILOT were adjusted, it wouldn't take effect until the tax years for municipalities and school districts, and if Morgenstern's prediction of a quick sale is correct, the issue would become moot.
When Muller Quaker sold its $200 million plant to DFA, DFA didn't immediately decide what to do with the plant and it sat vacant for more than a year. In that case, the GCEDC board adjusted the PILOT and DFA paid more than $655,000 in additional taxes to local governments in 2017. When HP Hood acquired the plant, the PILOT benefits were extended to Hood.