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Pine Pharmacy plans drug compounding facility in Tonawanda

A 3-year-old drug-making subsidiary of Pine Pharmacy plans to build a $5.6 million drug compounding facility in the Town of Tonawanda to accommodate its nationwide growth.

Pine Pharmaceuticals LLC, owned by Alfonse J. Muto, wants to construct a 25,000-square-foot, single-story building on a 4.2-acre undeveloped parcel at 355 Riverwalk Parkway in the Riverview Solar Technology Park. The building would house its offices, laboratory, manufacturing, warehousing and distribution operations.

The company has applied for $278,250 in sales tax breaks, $27,750 in mortgage recording tax incentives and additional property tax breaks from the Erie County Industrial Development Agency. A public hearing on the project will be held at Tonawanda Town Hall at 2919 Delaware Avenue in Kenmore at 9 a.m. Monday.

Muto, a graduate of University at Buffalo's School of Pharmacy, founded Pine Pharmacy in Niagara Falls in 1985 and oversaw its growth over the past 30 years. Along the way, he added more products and services, including durable medical equipment, compounding, immunizations and nutritional supplements. The business expanded to Williamsville's Walker Center and then to Rochester.

Muto and his son started Pine Pharmaceuticals in November 2013 to make customized drugs that could be shipped directly to doctors, according to the IDA documents. Nearly 90 percent of its sales are to customers outside of New York State, the application says.

The firm, which says it is one of only about 60 such "outsourcing facilities" in the United States, makes both injectable compounds for ophthalmology, dermatology, hospitals and other niche practices.

The company has outgrown its space at 100 Colvin Woods Parkway in Tonawanda. It employs 19 people, but expects to add another 15 if the project is completed, with average salaries of $150,000 for management and professional jobs and $50,000 for administrative and production positions.

The company says it wants to expand in Erie County and "explore all opportunities here before exploring elsewhere."

But company leaders say they need the tax breaks to make the Riverview project viable because of large investments into the growth of the company and impediments posed by operating in New York.

"New York State is a more costly state to do business in than many other states. This puts us at a bit of disadvantage when competing with companies in more business-friendly states," the company said in its application. Officials also cited the region's winter weather as a problem because of shipping delays that companies in warmer states don't face.

According to the application, the company plans to buy the land from TM Montante Development, owner of the business park, for $300,000 and will spend $4.5 million on construction. It also will pay $500,000 to purchase sterile equipment for clean rooms, including HVAC, HEPA filters, biological safety cabinets, workbenches, convection ovens and autoclaves.

The project would be financed with $1.9 million in company equity, plus $3.7 million in bank loans. The company plans to seek state economic development funding through the Consolidated Funding Application process.

If the firm receives ECIDA and municipal approvals, officials hope to begin work by March 14 and finish by Sept. 28, with manufacturing slated to begin by Nov. 3.

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