A Canadian logistics company is getting $300,000 in state aid for its $3 million project to move its Grand Island logistics center to a new site in Niagara County, where it hopes to revive an inactive foreign trade zone.
Borderworx Inc., a third-party logistics company that opened its Grand Island office seven years ago, is proposing to buy an inactive 31-acre site in the Vantage Center Industrial Park in Sanborn and use it as the location for a new distribution center that it will build, with an eye for adding additional structures as it revives the foreign trade zone.
To support the project, the Western New York Power Proceeds Allocation Board agreed Wednesday to recommend that Borderworx receive funding from a pool of money created by the sale of available hydropower from the Niagara Power Project.
The funding, if approved by the New York Power Authority board of trustees, would provide about 10 percent of the funding that Borderworx needs to build a 50,000-square-foot distribution center. About 80 percent of the space within the center would be used to receive, store and distribute finished goods for Borderworx’ clients from Canada and overseas that will use the distribution facility as their business presence in the U.S. market.
Borderworx would store inventory, process orders and ship them out, while also managing returns and providing accounting and finance support services for those companies. The center also would include some space for light manufacturing and assembly work for its clients.
Borderworx executives hope the new Sanborn facility will help it land additional Canadian clients to help its logistics business grow. If that happens, the company is interested in adding a second and third phase to the project.
The initial phase of the project is expected to create one job and retain 10 others, paying an average of $36,000 a year. If the second and third phases of the foreign trade zone expansion take place, it could lead to the creation of 75 new jobs, Empire State Development officials said.
“This is a jump start,” said board member Dennis Elsenbeck, National Grid’s regional executive in Buffalo.
State officials said Borderworx is planning to move most of its Canadian presence into the United States and has looked at several locations along the border between the United States and southern Ontario.
Christopher Schoepflin, Empire State Development’s regional director in Buffalo, said he believes there is a “greater than 50 percent chance” that the second and third phases of the project come to pass. “It’s zero percent if we don’t get this first phase started,” he said.
Almost half of the project’s financing would come from a loan through First Niagara Bank, with the company putting up $561,000. The company also may seek $675,000 in funding through the New York Business Development Corp.
The Power Authority funding comes from money generated by the sale of 85 megawatts of unused hydropower from the Niagara Power Project and set aside for economic-development projects in the region.
The fund currently has $15.5 million available for economic-development projects. The fund has awarded $25.6 million to economic-development projects within 30 miles of the Niagara Power Project since the program began in 2010.