A New Jersey distributor of lawn and snow removal equipment wants to double the size of its warehouse and logistics operation in Erie County to handle its rapid growth.
But the company, KPM Exceptional LLC, is hoping that the Erie County Industrial Development Agency will lend a helping hand with the $1.332 million project that will produce two new jobs.
KPM, a 62-year-old company based in Landing, N.J., is seeking a package of sales and property tax breaks so it can construct a 27,700-square-foot warehouse on its nine-acre property at 1393 Wisconsin Road in Derby.
The new facility will be built by Derby Warehousing LLC on an open grassy area in the western rear portion of the property – which is owned by KPM's general manager, Jeffrey Fierle – and would be occupied by KPM under a 10-year lease, according to documents filed with the ECIDA.
Plans call for demolishing a small building of 2,500 square feet there and replacing it with the new climate-controlled metal structure, which would adjoin the three current buildings that make up the current 28,000-square-foot complex that dates to 1955. That way, officials said, the company can "maintain a professional look" and "not have it look hodge-podge," according to the application.
Founded in 1957, KPM is a wholesale provider of outdoor power lawn, garden, snow and ice removal equipment to a dealer network of more than 600 accounts throughout the Northeast. Only 2% of its business comes from Erie County and just one-fourth of sales are within New York State.
The company has its main sales, administrative and distribution operations in New Jersey and Derby, where it stores equipment and then ships items to customers. It has 12 territory managers handling business from northern Maine through northern Virginia, and employs 53 full-time workers, of which six are in Derby.
Continued growth led the company to decide four years ago to build a new 100,000-square-foot state-of-the-art facility in Landing, which officials thought "would handle future growth for the next decade," according to the ECIDA application.
More recently, the firm said, it has also added a new third-party logistics division that balances the regular "peaks and valleys" of the seasonal business with more consistent demand for routine services from clients. The new venture provides warehousing services and next-day shipping for customers for lawn mower parts, equipment and other accessories.
"We at KPM are extremely efficient in providing next-day service to many of our current accounts," the company wrote in its application. "We felt we could handle an additional volume of shipments."
The company began soliciting other companies in the U.S. and Canada that wanted someone else to handle their logistics needs. It now has five customers for the third-party business, and sees opportunities for further growth that would necessitate adding more employees.
But "fortunately or unfortunately, KPM has found itself once again outgrowing our current capacity," officials wrote in the application. Rather than expand again in New Jersey, as executives originally planned, they took up a suggestion to look at the Derby site.
Officials cited the presence of "long-term, experienced employees" at Derby, its central location within the territory, its proximity to factory suppliers to reduce freight costs, its extra space for building on land already zoned for light-industrial use, the lower cost of construction and its position close to Canada to support future business expansion.
Nevertheless, the company says its budget for expansion is small and insists that the tax breaks are necessary, or else the addition would be built in New Jersey. If that happens, "there is a good likelihood that the Derby facility will be closed and operations moved to the main operation in New Jersey," the company wrote.
The project costs include $1.25 million for the addition, $18,000 for infrastructure work, $49,500 for furniture and other non-manufacturing equipment and $14,500 for professional fees.
The company plans to fund the project entirely from its own money, but is asking for $57,641 in sales tax breaks, plus a payment-in-lieu-of-taxes on the property. The project would create one full-time job, paying $35,000, and one part-time job, paying $16,000.
If approved by the ECIDA and local officials, work would start in July and finish by October, with occupancy as of Nov. 1.