State money for Beech-Nut comes with strings

A local purchasing requirement, employment goals and construction milestones are among requirements

The Hero Group/Beech-Nut will have to spend $4 million on ingredients, products and produce made in New York state in order to receive a $4 million grant from Empire State Development.

Beech-Nut incentives

To read the entire state incentive plan for the proposed Beech-Nut baby food plant in the town of Florida, click here.

The local purchasing requirement, employment goals and construction milestones are among requirements outlined in a state incentive plan for the $124 million project to build a new baby food manufacturing facility in the Florida Business Park.

The New York State Urban Development Corp., doing business as Empire State Development Corp., set a June 25 public hearing on the plan approved by the corporation’s board of directors in May.

The Hero Group is building a 550,000 square-foot facility for its subsidiary Beech-Nut Nutrition Corp. for a project expected to keep 356 jobs in Montgomery County. Empire State Development’s incentives, totaling up to $35,067,000, are the subject of the public hearing.

Other incentives provided to the company include a 20-year payment in lieu of taxes agreement and $2.5 million the state provided the company to relocate its headquarters from Missouri to offices the company rents in Latham.

Several conditions, including the requirement that job retention and creation goals are met, are required before the state releases grant money, according to the plan.

The Hero Group/Beech-Nut will have to demonstrate there’s been no adverse change in its financial condition, contribute at least 10-percent in equity towards the project and employ at least 356 people at the new plant in order to receive grants money.

A total of $4 million out of a $10 million Economic Development Fund Working capital grant will be distributed once the company is finished with construction and can prove it spent $4 million on New York State

ingredients, produce and products, according to the plan.

Montgomery County Economic Development Director Ken Rose said the state’s requirement that Beech-Nut buy ingredients from New York companies should represent good news to the state’s agricultural community.

Beech-Nut already buys local items to make baby food, but the state incentive agreement makes it a requirement for receiving grant money.

“It can be an extremely positive effect for all the growers,” Rose said.

The remaining $6 million of that working capital grant will be paid to the company on a quarterly basis once production has started. The company is required to document utility bills for the preceding quarter in order to get that money.

Categories: Schenectady County

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