The Montgomery County Legislature voted 8-1 Tuesday night to approve a five-year purchase option agreement with 102 Church Street LLC of Rockland County, a real estate holding company for E29 Labs, to sell the 19.6 acre East side parcel of the former Beech-Nut baby food plant for $550,000.
E29 Labs has proposed building a $15 million to $30 million cannabis cultivation and manufacturing company at the location.
Montgomery County Executive Matt Ossenfort said E29 Labs is owned by its company president Sheldon Roberts, its chief executive officer Shelley Roberts and cannabis-business veteran Michael Dundas, the founder of cannabis company Sira Naturals in Massachusetts, which he sold in 2019.
Dundas, the vice president of E29 Labs, said his company will pay Montgomery County $25,000 a year to maintain the purchase option. He added that E29 Labs will now do its due diligence to determine whether the 60,000 square foot building on the east side of the property is suitable for Phase 1 of its plan to build a cannabis cultivation, processing, laboratory, packaging facility, as well as corporate office functions — employing approximately 125 individuals in “well-paying positions including: agricultural experts, laboratory technicians, inventory & logistics specialists, supply chain experts, product formulation and manufacturing specialists, business managers, human resource leaders, salespeople, accountants, and marketing professionals,” according to the company’s prospectus for the project.
Dundas Tuesday night said E29 Labs is waiting for New York state to solidify all of the regulations for the production of cannabis-based products, which include recreational marijuana, which was only recently made legal on March 31. He said he’s hoping New York state will form its regulatory system for recreational marijuana within three to six months, after which he anticipates his company will close the sale of the property with Montgomery County, paying the full $550,000 purchase price.
“For the completion of Phase 1 — turning on the facility and having it operating — our aspirational goal is 18 months, but the realistic goal is probably closer to 24 months,” he said.
The E29 Cannabis Development Project summary outlines the major phases of the company’s proposal for the site after the completion of Phase 1:
• Phase 2 — would include the development of a ground-up, state-of-the-art greenhouse and support facilities covering an additional 100,000 square feet — employing an estimated additional 150 people.
• Phase 3 — would include the expansion of both greenhouse and indoor production capacity as well as a public facing cannabis education facility that will “allow members of the public to learn about responsible cannabis production and consumption, and about activities performed on the site.” The company estimates it could have 500 total employees at the completion of Phase 3, but also anticipates it could be 7 to 10 years to get to that point.
Montgomery County Economic Development Director Ken Rose said it remains uncertain whether New York state will allow cannabis businesses to apply for economic incentives, such as Payment in Lieu of Taxes agreements, sales tax exemptions or low-interest loans from county Industrial Development Agencies.
Dundas said it is too premature in the process for him to determine whether E29 Labs would apply for any economic incentives from the Montgomery County IDA, if the state allows for it.
Ossenfort said the purchase agreement approved Tuesday night is a major step forward for the county’s Exit-29 project to rehabilitate the 29-acre former Beech-Nut baby food plant property in the village of Canajoharie, once the heart of its downtown. The county obtained the property when it foreclosed on the old plant in 2017 after the U.S. Environmental Protection Agency agreed to release $4 million worth of liens on the property in exchange for 50 percent of the ultimate proceeds of the sale of the property. Since then the county has used millions of dollars in state grants to clear the eastern portion of the property of debris and get it to the point where it is ready to be occupied by a new owner.
The purchase agreement approved by the legislature Tuesday night includes the phrase, “Property would be sold for $550,000, and some proceeds will be shared with EPA pursuant to the 106 Order and Memorandum of Agreement and the new owner would be responsible to pay for all future taxes.
Ossenfort said E29 Labs won’t fill all of the economic loss left more than a decade ago when Beech-Nut left Canajoharie, but it will help.
“Being that is was a one-horse town, there was a big hole to fill, and this won’t replace the water-usage of the facility that Beech-Nut had, but we still have the western side of the project and any potential activity that happens as a result of the activity on the site,” he said. “It’s a step in the right direction, but it’s not going to fill the void left completely, by any means. At the tail end of when Beech-Nut was there, there were about 300 workers, and at peak it was around 1,000 [in the 1970s], so with half of this site potentially getting to 500 workers, that’ll be a huge victory.”
None of the members of the county legislature voted against the purchase agreement Tuesday night, but District 6 Legislator John Duchessi, the vice chairman of the board, was absent, as he has been throughout 2021. Being absent counts as a no-vote according to the legislature’s parliamentary rules.