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State releases $200 million for drug manufacturing plant in Dunkirk

The state has released $200 million in aid for a drug manufacturing plant that Athenex intends to build in Dunkirk, and the company is prepared to hire a construction and engineering manager for the massive project.

Those are the most concrete signs of progress yet for the long-delayed project viewed as a potential economic engine for northern Chautauqua County.

New York State had promised to invest $200 million in building a 315,000-square-foot, state-of-the-art facility for Athenex, and the biotech company had promised over time to spend $1.52 billion and hire 450 workers there. But little activity had taken place at the site since state and Athenex officials announced the public-private partnership in February 2016.

That's why elected officials who represent the area say they applaud the Empire State Development board of directors' approval of funding for the project and say they are optimistic the drug-making operation will soon get off the ground.

Cuomo calls $200 million Athenex biotech plant a ‘game-changer’ for Dunkirk

"We're very anxious to get the work going," State Sen. Catharine Young, R-Olean, the chairwoman of the Senate Finance Committee, said in an interview Tuesday.

Athenex, formed in 2003 as Kinex Pharmaceuticals, traces its roots to research into promising anti-cancer drugs conducted by a onetime University at Buffalo chemistry professor.

The company grew rapidly over the past five years, acquiring or making licensing agreements with several small pharmaceutical companies to give it access to market-ready drug ingredients and drug candidates. By the start of this year, Athenex had 380 employees in Buffalo, Newstead, N.J., Texas, Hong Kong, Taiwan and China, and had raised about $500 million in capital.

Athenex has a North American headquarters, product development center and pilot plant on the Buffalo Niagara Medical Campus, where the state invested $25 million in construction and equipment costs.

[Gallery: Cuomo tours Athenex facility at Conventus] 

The company in 2014 began looking for a location for a plant where it would manufacture advanced cancer drugs and pharmaceutical products to ship around the world.

The state urged Athenex to pick a site outside metro Buffalo and Erie County, to bring the economic-development benefits of the project to an outlying area of Western New York.

Athenex worked with Ciminelli Real Estate Corp., McGuire Development and the engineering firm CHA to select the site on Lake Shore Drive East in the Town of Dunkirk, Athenex officials previously said.

Athenex Chairman and CEO Johnson Lau, left, and Gov. Andrew Cuomo, shake hands during the announcement of the new Athenex drug manufacturing plant planned for Dunkirk on Feb. 11, 2016. (Robert Kirkham/Buffalo News)

Gov. Andrew M. Cuomo, elected officials and company representatives announced the agreement between the state and Athenex 14 months ago. In addition to the 450 jobs Athenex pledged to create on site, suppliers and contractors are expected to create another 450 jobs through the project.

Athenex officials have met with community leaders regularly in the months since the announcement, but the project has yet to get off the ground.

In fact, Flint D. Besecker, Athenex's former chief operating officer, complained to The Buffalo News in August about the slow pace of progress under the project's previous lead agency, SUNY Polytechnic Institute.

After The News published that interview, the state assigned responsibility for managing the project to Howard Zemsky, the president of Empire State Development, and his agency.

Besecker, who stepped down from his role in February to become a strategic adviser to the company's CEO, professed satisfaction with the change.

After some initial delays, said Chautauqua County Executive Vincent W. Horrigan, "I feel things are moving forward."

In February, Athenex issued a request for qualifications for the construction, design and engineering contract for the plant, according to Gail Ettaro, senior director of marketing for LPCiminelli. The company put together a team to respond to the request, which had a deadline of March 10, Ettaro said.

The company has not formally worked at the Dunkirk site previously, but it did informally advise Ciminelli Real Estate Corp. during the site-selection process, said Matt Davison, managing partner at Martin Davison Public Relations and a spokesman for LPCiminelli.

LPCiminelli, which has come under scrutiny for the conduct of three of its executives who now face criminal charges, said it is waiting to find out whether it has made the shortlist of firms receiving further consideration for the construction and engineering contract.

Teresa Brophy Bair, Athenex's vice president for corporate development and legal affairs, declined to comment on where things stand with the project or the selection of the management company.

"As a matter of corporate policy we don’t comment on the status of a pending bidding process," Bair said in an email. "We’re working closely with ESD to move things forward, and we are pleased with the progress we’ve made since Howard and his team became involved in our project."

As for the $200 million, the Legislature and the governor had approved the money in last year's state budget but the Empire State Development board had to vote to release the money.

That vote took place at last week's board meeting. Now the Public Authorities Control Board must hold its own public hearing before voting on the $200 million in aid.

Jason Conwall, an Empire State Development spokesman, said the procurement process led by Athenex for the construction and engineering manager would be "open and competitive."

He also said the review of the project's environmental impact is complete.

"We are excited to see this project moving forward and will continue working with Athenex to bring hundreds of new jobs to Western New York,” Conwall said in an email.

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