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Rail car maker seeks ECIDA tax breaks to keep expansion on track

A 37-year-old freight rail car manufacturer based in West Seneca wants to more than double the size of its facility, with help from the Erie County Industrial Development Agency.

Ebenezer Railcar Services Inc. has applied for a package of tax breaks to support its $6 million expansion at 1005 Indian Church Road. The employee-owned company currently has a 67,462-square-foot manufacturing building on its 48.26-acre property, but wants to construct a 94,000 square foot addition on an unused portion of its land for more manufacturing, warehouse and office space.

That would allow it to not only increase production capacity at its current site, but also to consolidate all of its Western New York operations to one location. The company also has a leased facility in Blasdell.

Additionally, the expansion would allow the company to implement more advanced and technical manufacturing processes, by upgrading the facility and equipment. Officials expect to purchase "a significant amount of equipment," including for welding, metal fabrication and advanced manufacturing, as well as cranes and jacks.

Finally, the expansion would result in more jobs, while reducing or eliminating the need to outsource some production to a sister company in Colorado, Liberty Railway Services. Ebenezer employs 88 in West Seneca and 35 in Blasdell currently, but expects to add 13 full-time jobs, paying an average salary of $55,000.

Founded in 1981, Ebenezer Railcar both makes and repairs freight cars, although manufacturing is expected to take up the bulk of its future operations. Its work includes design, engineering, welding, metal fabricating, sandblasting, painting, stenciling and testing of new-build rail cars, mostly flatcars and boxcars that can be specialized from a base frame.

The company focuses on small-volume orders of usually less than 100 cars per order, as well as specially designed rail cars, and its customers include both national and multinational freight-car leasing companies, railroad companies and government agencies, among others. It's the only freight rail car manufacturer in the state, but most of its competition is based in the United States, although their production is usually in Mexico and Canada.

The company said it plans to continue to grow over the next five to 10 years "and hopefully beyond," according to the ECIDA application.

"Any financial assistance would help those expansion efforts, as funds can be reinvested into the company through future manufacturing upgrades and additional hiring as production increases," the company wrote in the application. "The railcar manufacturing industry is highly competitive, and large national manufacturers dominate the large-order segment."

The company said it needs the ECIDA help with lowering property and sales taxes to "reduce the financial impact of this significant investment," so it can focus on growing the company "to provide a stable and competitive financial future of the company."

Otherwise, the expansion won't happen locally, but potentially at the Liberty operations in Colorado instead, the company warned.

The project costs include $4.5 million for the construction, plus $1.3 million for new equipment and $200,000 for other furnishings and professional services. Funding includes $3.5 million in equity and $2.5 million in bank financing. Ebenezer has also been approved for state Excelsior Jobs tax credits, and is seeking a capital improvement grant from New York State Electric & Gas.

Ebenezer officials are seeking a payment in lieu of taxes on the property taxes and a sales tax exemption valued at $262,500. A public hearing was held Tuesday morning, and the ECIDA is expected to take up the request later this month.

The project still needs municipal approval before it can proceed. If it gets the green light, officials hope to have it completed by March 2019.

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