ELLICOTTVILLE — County development officials and developers took their first formal step Thursday to bringing new manufacturing to the former Siemens Energy facility in North Olean.
The Cattaraugus County Industrial Development Agency board unanimously accepted an application from Cimolai-HY, LLC, for tax breaks to redevelop the Siemens Energy site in North Olean to build structural steel components and fabrications. The new company is looking to create 215 skilled manufacturing jobs and 25-30 office jobs between 2023 and 2025, with an estimated annual payroll of $15 million, according to the application it presented to the IDA.
Cimolai-HY — a joint venture by New York-based real estate firm Related Companies and Italian steel component manufacturer Cimolai S.p.A. — was the high bidder recently for the 88-acre Siemens Energy facility in North Olean, which shut down its manufacturing line in June after more than 100 years at the site. The winning bid was $7.7 million, purchasing the lands and buildings with 947,000 square feet of floor space.
IDA officials noted the sale has not closed.
The company looks to spend around $56 million on the project, including $33.3 million for equipment; $11.1 million in startup, commissions and training costs; $1.5 million for remodeling and reconstruction; $500,000 for furniture and fixtures; and $603,000 for engineering expenses. Company officials added they are eyeing state and federal assistance programs to cover part of those costs.
“It is very capital intensive, which is what we’re worried about,” said John Kelly, senior vice president of Related Companies.
To aid the project, the company is asking the IDA for $400,000 in sales tax exemptions, $125,000 for mortgage tax exemption, and a to-be-determined level of payments in lieu of taxes. The site carries a $332,000-a-year tax bill, according to the application documents.
“This is a project we’re very excited about,” said Kelly, noting the firms have worked together on projects for 10 years, and “we want to bring manufacturing to New York, and we think we can be competitive.
“Our timeline … is hopefully to start some manufacturing on a small scale in the second or third quarter of 2023,” Kelly said, with full production to be in place by 2025 at the latest. The deciding factor will be acquiring contracts for projects, he added.
IDA and company officials reported increasing requirements for “Buy American” on government infrastructure projects are one of the drivers of the Olean proposal, as the manufacturing capacity for some large projects is nonexistent in America.
For one recent project involving an orthotropic bridge deck, Cimolai was forced to ship American steel to Italy for fabrication, then transporting the completed deck back to the U.S. for installation.
“We see an opportunity to do that (work) here,” Kelly said.
Previous projects in the U.S. by Cimolai include Allegiant Stadium in Las Vegas, as well as stadiums in Europe, Asia and Africa; large bridge projects around the globe; and various steel buildings.
The company was founded in 1959. Related is a multi-billion-dollar real estate company headquartered in the Hudson Yards development in New York.
IDA officials announced their support for moving on the application quickly.
“It’s allowing us to start our process in earnest on a transformative, community-shaping project,” said Corey Wiktor, executive director of the IDA. “That campus defines generations and families … on Feb. 2, 2021 (the date Siemens Energy announced the end of manufacturing and more than 500 layoffs) that hurt when they announced that.
“We certainly want to exercise all of our options … to help the project come to fruition, hopefully, in the near future,” Wiktor said.
IDA officials said they hope to have a State Environmental Quality Review on the tax breaks completed shortly, and set a public hearing for early in the fall.
