Invitrogen, a life sciences company, will receive $974,000 in tax breaks to support a $2.5 million expansion of its Grand Island plant.
The Erie County Industrial Development Agency on Monday approved incentives to support the project. Invitrogen provides cell culture products that are used in research.
The company plans to add 21,500 square feet of raw materials warehouse space, along with related machinery and equipment, to its Staley Road plant. IDA officials said Invitrogen needs more space to accommodate new business growth and customer demand from new drugs on the market.
The agency also said Invitrogen could see additional opportunities from a planned merger with Applied Biosystems, a $6.4 billion deal that was announced in June but is not yet complete.
The IDA said the incentives were needed to ensure that Invitrogen's expansion takes place here, since the California-based company has facilities around the world that could accommodate it. Its Grand Island plant has 475 employees.
The largest single incentive in the package was $854,000 in property tax savings. Other incentives call for a $96,000 savings in sales tax and a $24,000 savings in mortgage recording tax.
The agency expects the project to generate $568,000 of revenue to the local taxing jurisdictions -- the county, the Town of Grand Island and the Grand Island Central School District -- over the life of the tax abatement.
Prior to the latest project, the ECIDA since 1975 has worked with Invitrogen on projects worth more than $20 million altogether.
Separately, the ECIDA and other IDAs in the county are working on revising incentives they provide through payment-in-lieu-of-taxes agreements.
The ideas are still in development, but the IDAs, through a leadership council, are considering recommendations including a tiered system of incentives for projects eligible for IDA benefits, said John Cappellino, the ECIDA's director of business development. Projects would earn "points" for meeting a wide range of criteria listed on a scorecard, such as the type of industry a project is in, employment and environmental factors.
"If we adopt this kind of format, it's flexible in the future," Cappellino said.
Another change being talked about is shortening the length of PILOT schedules, in order to deliver the benefits more quickly to companies that invest and to fully return properties to the tax rolls sooner. The IDAs' leadership council is mulling ways to encourage more "adaptive reuse," or reviving vacant properties shunned by developers.
The IDA board approved a 2009 fiscal year budget of $2.4 million that anticipates a 3 percent drop in administrative fees, which are collected on projects that receive tax abatements. IDA officials assume those fees will decline next year partly because of less activity resulting from a weaker economy.
The agency plans to hire two business development officers but budgeted no money for its vacant executive director position. Three IDA officials have been jointly handling the CEO's duties since Charles Webb resigned nearly two years ago.
County executive Chris Collins, an ECIDA board member, said the agency benefits from having a chairman, Philip Ackerman, and a vice chairman, Philip Corwin, with executive leadership experience who serve on a voluntary basis.