Win-Sum Applies for Sales Tax Exemption
By Jann Wiswall
National Fuel Gas Supply Corporation officials have asked the Cattaraugus County Industrial Development Agency (CCIDA) for some $3.5 million in tax breaks for its Northern Access 2015 project. The company received Federal Energy Regulatory Commission (FERC) certification for the project on Feb. 27.
The proposal requesting tax relief was presented to the CCIDA’s board during its meeting on Tuesday, March 17.
The Northern Access 2015 project involves constructing a 15,400-horsepower compressor station in the Town of Hinsdale on Phillips Road, which will pump natural gas through existing pipelines from hydraulic fracturing (fracking) operations in the Marcellus Shale region of northern Pennsylvania to the Buffalo area and points north and east, including Canada. The Hinsdale station, a $42.5 million project, is scheduled to start construction this spring and is expected to be completed by November. It is part of a larger infrastructure expansion project being built in conjunction with Tennessee Gas Pipeline. Additional compression facilities will be built in the town of Concord in Erie County.
FERC required the station to be designed to comply with strict noise and emissions standards. The storage tank will be double walled, site runoff will be controlled through storm water retention facilities, and daily inspections will be conducted.
The company is requesting sales tax exemption for materials and equipment purchased in New York associated with construction of the Hinsdale station (valued at $1.75 million in savings), as well as a 15-year Payment in Lieu of Taxes (PILOT) agreement to reduce its real property tax burden by another $1.75 million.
As stated in a March 9 letter to the CCIDA from National Fuel Gas Vice President Ronald C. Kraemer, “Final commitment to construct the project would not occur until binding customer agreements are executed following receipt of all major permits and a review of final project economics, which may in part be affected by the receipt of the financial assistance requested here.”
“National Fuel, which is headquartered in Buffalo, NY, is a significant diversified energy company with more than $6.5 billion in total assets,” the letter stated.
NFG estimates that the project will create 100 construction jobs (valued at $6.8 million, with about $500,000 in local labor); 220 temporary construction jobs, $19.3 million in local and regional spending on supplies, services and materials; and three long-term jobs (with one permanent position on-site). The letter also points out that Cattaraugus County and Hinsdale will gain a “long-term corporate taxpayer” that will spur local economic development by making “low-priced, regionally produced natural gas” available through the interstate pipeline grid. It calculates the “annual economic impact of ongoing operations” at $767,000.
NFG’s Vice President Ron Kraemer said the company’s 2016 plans include building a parallel 24” pipeline and “powering that up.” He said the company will be requesting the CCIDA’s support for that expansion plan as well.
In its discussion of the proposal, which was extensively reviewed by the CCIDA’s attorney, CCIDA board members expressed enthusiasm for the project, noting that, with its long-term expansion plans, NFG will be creating many more construction jobs “from one side of the county to the other.”
CCIDA Executive Director Corey Wiktor said the CCIDA’s support “helps them sharpen their expense-related costs,” and is “one step in the process to make the project successful.” He also added that there is a “strong multiplier effect” that will impact the local economy for years to come.
Kraemer said that the sales tax exemption is important to NFG, which is ready to “start buying materials now.”
The board passed a resolution to hold a public hearing on the proposal (TBA) and to authorize a preliminary State Environmental Quality Review (SEQR), which may be led by the Town of Hinsdale, which also will issue all necessary building permits.
NFG will pay the CCIDA an administrative fee of 1.16 percent of the total $42.5 million project value.
Win-Sum Application for Sales Tax Exemption
David Trathen, vice president and treasurer of Win-Sum Ski Corp., the parent company of Holiday Valley Resort, attended the CCIDA’s March 17 meeting to formally request a sales tax exemption on the purchase of some $2.5 million in supplies, materials and equipment for 2015-16 projects and improvements at the resort.
The list includes the purchase of 40 new automated snow guns, four snowmobiles, a 14-passenger bus, a SnowCat with articulating arm, carpeting for Tannenbaum Lodge, equipment for Sky High Adventure Park and golf carts, as well as materials needed to complete the new pool cabana and make various improvements to the resort’s IT systems, ongoing renovation of the Inn and golf course improvements.
In addition, the resort is seeking sales tax relief for materials and equipment needed for the realignment of Holiday Valley Road, which is scheduled to begin as soon as April 1. The realignment project will reroute a section the road to improve pedestrian safety in front of the main lodge and to provide additional and better parking access and flow.
The value of the sales tax savings is estimated to be more than $200,000.
Wiktor noted that the resort is working hard to build its “four-season reputation,” and that these projects will contribute to its success.
The CCIDA’s administrative fee for this project will be 1.16 percent of the total $2.5 million project value, plus expenses.
The board approved motions to hold a public hearing and to begin a preliminary SEQR on the application.
Mazza Mechanical Services Application
During its meeting, the CCIDA also approved motions to hold a public hearing and conduct a preliminary SEQR on an application from Mazza Mechanical Services in Olean to construct a 6,600-square-foot addition and renovate existing facilities to help grow its metal fabrication and welding business. The company requested sales tax abatement, a “manufacturing-new construction” PILOT and NYS mortgage recording tax exemption, which will save about $40,000 on its planned $550,000 investment.
The company employs 58 people in Cattaraugus County and expects to add at least five new employees in the near future. It also has offices in Jamestown and Orchard Park and is seeking a location in Rochester.
The CCIDA will charge the company an administrative fee of $5,000-$7,500 plus up to $750 in expenses.
The next meeting of the CCIDA will be held on Tuesday, April 21 at 11:15 a.m. at the CCIDA offices in Ellicottville.