Schoharie County supervisors are giving an Otsego County-based brewery until Oct. 15 to purchase the former Guilford Mills complex in Cobleskill.
Representatives of Butternuts Beer & Ale met with rejection Friday after asking supervisors to hold a mortgage on the property. County Board Chairman Phil Skowfoe, D-Fulton, said the board declined the mortgage proposal because doing so could expose the county to a potential $2.5 million loss — the purchase price for the 460,000-square-foot factory building that has been vacant for more than a decade.
County Treasurer William Cherry said he is “adamantly opposed” to the county holding a second mortgage. “The danger there is the county could easily end up with nothing,” he said.
According to county Planning and Development Director Alicia Terry, brewery principals want to take out a loan to get the massive facility in usable shape. That would entail repairing the roof for about $400,000 and getting adequate electricity to the facility for about $1.2 million, she said.
Butternuts Beer & Ale owners sought to have the building deeded over to the company, then the county would hold a note and accept payments toward a purchase price. That would free the company up to make improvements to the building and pursue beer manufacturing.
Supervisor Thomas Murray, D-Cobleskill, said he believes the county should reconsider in order to help beat back competition from neighboring counties.
“We need jobs. Our unemployment rate’s like 12 percent,” he said. He noted the old mill complex has been “stripped of everything,” but is still attractive because it is so large that a business could expand within it.
It’s possible, Murray said, that even the PILOT agreement being offered isn’t sufficient to put the Cobleskill building on top of the brewer’s list of possible sites.
The Schoharie County Industrial Development Agency is offering a 10-year payment in lieu of taxes deal that would eliminate standard property taxes and instead collect $62,000 each year for five years, then gradually increase from $77,754 in the sixth year to $152,374 in the 10th year.
The PILOT is in addition to some generous terms in the county’s purchase agreement, including a down payment of only $5,000. Also, the mill’s $2.5 million price tag would be reduced by $15,000 for each job, up to 110, created beyond 10 initial positions. That provision could cut the purchase price below $1 million.
Meanwhile, New York state provided $750,000 in economic development funding for the effort.
Supervisor Gene Milone, D-Schoharie, said he’s unsure the brewing company even wants the Cobleskill facility. He said he surmises the brewers are using Schoharie County’s offerings as a “bargaining chip” to get even more economic development assistance elsewhere.
Murray said it’s his understanding Otsego County has a suitable site for another brewery, but he said the Guilford Mills facility is large enough to accommodate expansion.
Butternuts Beer & Ale/Longhouse Holdings representative John Lorence did not respond to email and phone messages seeking comment Tuesday.