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One month after ECIDA penalties, Unifrax seeks more tax breaks

Just four months after cutting its local workforce and two months after losing some of its previous tax breaks for not meeting its job targets, manufacturer Unifrax Corp. is coming back to the Erie County Industrial Development Agency to ask for more incentives for a new expansion.

Unifrax, the Tonawanda-based manufacturer of high-temperature insulation products, is planning a $36 million project to add another 90,000 square feet to an existing building at 55 Pirson Parkway, just north of I-290 and east of the intersection with the Niagara Thruway.

The project would add multiple manufacturing lines for producing "poly-crystalline fiber" products, much of which would be ultimately sold and shipped into European markets. That means the company expects to incur shipping charges, however, and company officials said they plan to consider sites in Europe as alternatives.

Unifrax executives want more than $1 million tax breaks to make Tonawanda "competitive with other potential European sites where these products could also be made," according to the company's application to the ECIDA.

The project would create 10 new jobs paying an average of $57,500, while retaining 27 positions paying $69,000 on average, according to its application. And the request comes on the heels of an up-and-down year that left the company's image dinged.

Last June, Unifrax celebrated the expansion of its two Tonawanda facilities, after investing more than $67 million in them. As part of one of those projects, a $33 million expansion at its nearby Firetower Drive complex that was completed in 2017, it received sales and property tax breaks from the ECIDA.

But just one month later, in October, it announced it was cutting 10 percent of its workforce, or about 45 people, citing "short-term shifts" in product demand. That brought employment at its Firetower Drive location down to 257 - well below the minimum of 289 jobs that it had pledged to maintain as part of its earlier tax break package.

In response, the ECIDA penalized the company in January with a partial recapture of benefits, although the agency did not suspend the tax breaks entirely.

Unifrax could lose tax breaks for breaking job promises

Now Unifrax is back again. The company says it wants to get started on the new project "almost immediately," and noted that other construction work is still underway at the Tonawanda site on Pirson. That's where the company built an 85,000-square-foot, $34 million building in 2017 with two poly-crystalline fiber-mat production lines.

That means it would be easier and faster to assemble workers and materials for an additional project locally "instead of a cold European start to construction," the company said.

The proposed project includes $10.975 million for construction, $7.7 million for infrastructure and $14.8 million for manufacturing equipment – most of which will be purchased. There's also $2.5 million in professional or "soft" costs.

Funding will come from $18 million in equity, $17.5 million in bank loans, and $500,000 in grants from National Grid. It also plans to seek assistance from National Fuel Gas Co., the New York Power Authority and the New York Energy Research and Development Agency. The company is asking ECIDA for $146,250 in mortgage tax breaks and $752,500 in sales tax breaks, plus an unspecified payment-in-lieu-of-taxes for the property.

The company already owns the light-industry property, and the project has been approved by the town. Officials hope to start work by May 1 and finish construction by the end of June 2020.

ECIDA will hold a public hearing on the proposal at 9:30 a.m. on Feb. 26 at the Town of Tonawanda Town Hall at 2919 Delaware Ave. The agency's Policy Committee is expected to review the application at 9 a.m. on March 7, followed by the full board on March 27 at noon.

Originally founded in 1942, Unifrax was spun off from Carborundum Co. as an independent company in 1996, but has been owned by private-equity firms for more than 15 years. The company makes insulation products for a variety of industrial uses, including bulk fiber, blankets, boards, modules, papers, felts, woven textiles, ropes, braids, coatings, mixes and other accessories. The poly-crystalline product uses a technique developed in Japan.

Unifrax now employs more than 2,300 at 23 manufacturing facilities worldwide in the United States, Europe, Asia, South Africa and Latin America, including the two in Tonawanda and one in Sanborn. The company currently employs 242 at 360 Firetower and another 122 at its headquarters at 600 Riverwalk Parkway, both in Tonawanda.

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