KanPak plans get support

John Christensen
The KanPak plant in Horizon Business Park south of Penn Yan.

Following the public hearing April 3 to consider a Payment in Lieu of Taxes (PILOT) agreement for KanPak’s possible expansion of their Penn Yan manufacturing plant located in the Horizon Business Park, the Finger Lakes Economic Development Center’s (FLEDC, the Yates County industrial/economic development agency) Board of Directors met the next morning to approve the agreement. 

FLEDC CEO Steve Griffin says KanPak is planning to add a 196,000 sq. ft. warehouse and investing in a greatly improved and expanded wastewater treatment facility to support a growth in volume.  

“The total projected capital investment is $20,739,610 with an anticipation of 18 full time equivalent jobs (up from a previously reported 12) created over the next three years, and retaining 208 other positions,” says Griffin, adding, “KanPak’s 208 employees prior to this project already makes them the largest manufacturer in Yates County.”

While no other approvals for the PILOT are required, the expansion has not been finally approved by KanPak’s corporate headquarters as they continue discussion with Empire State Development and are analyzing other company locations as a possible option for the expansion as well. “We are proceeding forward on our end to be ready in the event KanPak does approve the expansion in Penn Yan,” says Griffin.

If approved, Griffin calculates the projected total economic benefit to the community, taking into account construction and facility build-out costs, PILOT payments made, and total wages paid for new hires, would total $33,300,020 (up from $32,886,198). The total projected tax savings to KanPak in return for their investment is projected to be $3,937,040 over a 15-year ramped property tax increase period; $3,173,411 in property tax savings, $763,629 in sales tax exemptions, and yet to be determined mortgage tax exemption). 

The benefits of KanPak’s planned multi-million dollar wastewater treatment system are also significant. Dairy waste products can be disastrous to the function of municipal sewage treatment. With KanPak’s new wastewater system, considerable strain will be taken off the Penn Yan Municipal Wastewater Treatment Plant.

At some point either before or after the expansion is done, KanPak intends to sell the entire facility to another company, which will lease the facility back to KanPak. Griffin says this is not an unusual business practice. 

“In nearly every deal we do, there is a separate real estate entity that owns the property and rents back to the company that actually operates out of the facility and creates the jobs,” says Griffin. “It adds a level of separation from a liability standpoint and frees up capital for the company while providing an investment opportunity for the real estate owner. In this case, the property is going to be owned by Penn Yan Manufacturing Realty LLC, which is based out of Missouri and is approved to do business in New York State. They have utilized this same structure for their Kansas facilities.” Griffin says the incentives and the clawback provisions are directly tied to KanPak, “So the FLEDC is offering the incentives to allow KanPak to grow in the area.”

Yates County and Penn Yan Village Planning Boards have both approved the site plan for the project in anticipation of local company officials receiving the corporate approval.

In other business:

The public hearing for the Hampton Inn Conference Center expansion PILOT was also held April 3 for Chris Iversen’s planned construction of an approximately 12,500 sq. ft. conference and banquet facility onto the Hampton Inn in Penn Yan. The center will have capacity for 300 people for banquets and 585 people for conference events.  

The total projected capital investment is $4,435,000 with an anticipation of 21 full-time equivalent jobs created over the next 3 years. Other than press, no members of the public or any municipal government attended either hearing.