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$200K purchase

New owner of Beech-Nut wants assessment cut

Wednesday, January 22, 2014
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$200K purchase


Beech-Nut building in Canajoharie has been sold.
Photographer: Marc Schultz
Beech-Nut building in Canajoharie has been sold.

— For a century, Beech-Nut Nutrition Corp. sustained the village of Canajoharie’s small economy.

Even after the company moved its baby food manufacturing operations to a new facility in the town of Florida more than two years ago, property taxes on the unused made up a tenth of the village’s tax revenue. But in a few months, that revenue is expected to be greatly reduced.

After two years sitting empty, the 20-acre former Beech-Nut facility dominating Canajoharie’s east end was sold last month to TD Development LLC, a company specializing in the rehabilitation of old industrial buildings.

At first, the purchase was hailed as purely good news for the whole area. TD co-owner Todd Clifford plans to bring jobs to the village by rebuilding and leasing sections of the structure, but plans to not pay nearly as much in taxes as Beech-Nut did.

While Beech-Nut owned the facility, it was assessed at $9.4 million, and the town, village, county and school district got to split nearly a half-million dollars a year in property taxes from that single hulking building.

According to a deed filed in the Montgomery County Clerk’s Office, TD Development bought the whole structure for just $200,000. In a few months, Clifford said he plans to challenge the current $9.4 million assessment.

“It’s not worth that,” he said. “Maybe it was when it was operational, but it’s a hundred years old and sitting empty. Now it’s worth what I paid for it.”

Should Clifford succeed in getting the assessment slashed to $200,000, three municipalities and a school district will be splitting the amount of tax paid on a nice one-family house, rather than divvying up $500,000.

“It’s going to be a hit for the village,” said Canajoharie Mayor Francis Avery.

Every year, Avery said, the village pulls in $937,000 in tax revenue, $97,000 of which came from Beech-Nut and may not be coming much longer.

“We’ve been expecting this for a few years,” he said. “We’ve been talking steps to mitigate.”

Those steps include cutting the village Department of Public Works staff from a dozen to just four workers and renegotiating employee fringe benefits.

“But you can only cut things so far,” he said.

Montgomery County Treasurer Shawn Bowerman couldn’t comment on how much revenue the county might lose, but Avery’s tally suggests a figure close to $150,000.

The loss of tax revenue, Clifford said, should be viewed as a temporary sacrifice. When he came to the area, he said Beech-Nut was still paying taxes on a vastly overvalued building in an attempt to be “good neighbors.” But aside from generating property tax revenue, the building was doing nothing.

By summer, Clifford said, a 300,000-square-foot section of the facility will be gone. He will open the remainder to warehouse industries and use the newly vacant land for parking and loading and unloading large trucks. Within two or three years, he said, there will be a gas station and fast food restaurant right at the adjacent Thruway Exit 29 and light manufacturing in the western section of the building.

“This is going to have to happen piecemeal,” he said. “As businesses come in and the building is refurbished, property tax revenue will be rebuilt.”

In the long run, he said, the village will be better off and a tax impact now is worth future jobs and a better quality of life.

Avery is cautiously hopeful that all will turn out well.

“I’m maintaining a wait-and-see attitude,” he said.

 
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