Cost overruns and unexpected environmental cleanup expenses sent costs soaring for Moog's planned headquarters expansion in Elma, prompting the aerospace company to ask the Erie County Industrial Development Agency for another $500,000 in tax breaks to aid the project.
Moog wants the ECIDA to increase the sales tax exemption to $2.1 million, up from $1.575 million in its original application. That's an increase of one-third, which matches the increase in the total project cost.
The scope of the project – adding 95,000 square feet of space to the campus at 400 Jamison Road – hasn't changed, but officials are projecting the expenses will jump by $11.7 million – or 36%– to $44.3 million.
That includes an increase in "soft costs" – for architectural, construction management and interior design work – from $500,000 originally to $4.2 million. The company said it had alerted the ECIDA of that change previously.
The rest of the increase, however, was "unforeseen." The company said the proposed project site has contaminated groundwater that is collected in stormwater sewer pipes and then treated, but the source of the solvent-based pollution has not been determined, despite numerous attempts. That's complicated the project.
Total expenses also include $29.25 million for construction, $8.85 million for renovation, $1.5 million for furniture and fixtures and $500,000 for manufacturing equipment.
The company said it's already created 69 new jobs – significantly higher than the 42 it had originally projected and promised for the first two years.
Moog has been expanding for the past few years after winning contracts in the military, commercial and aerospace fields. The company announced plans in February 2017 to spend $32.6 million on the expansion to support the U.S. military's Joint Strike Fighter project.
Moog also said it would spend another $26 million to upgrade its Wheatfield plant – home to its Space and Defense Group – by renovating the 10-acre, 87,000 square foot facility to construct two new buildings and add vacuum chambers that simulate conditions in space.
With the twin expansions and a previous $12 million renovation project, the company was eligible to receive $4 million in Excelsior Jobs tax credits from the state and $3.6 million in ECIDA tax breaks for Elma, along with another $4.5 million from the state and a 15-year property tax break from the Niagara County Industrial Development Agency for Wheatfield. It also got a low-cost hydropower allocation from the New York Power Authority.
At the Elma campus, about 75% to 80% of the expansion space would be used for mechanical and electronic assembly, as well as test facilities for products used for military and commercial aircraft flight control. That would support significant research and development in pump and motor technology for aerospace. The rest of the area would be for mixed office space for engineering, manufacturing support and administrative functions.
Ultimately, officials projected, the company would add 90 to 110 new jobs over five years, paying an average salary of $83,900.
The company said it will pay for the project using existing bank financing. But it noted that it had considered expanding its aircraft facility in Salt Lake City instead – and even talked with Utah officials about tax credits and other financing – if it hadn't gotten incentives in New York to offset some of the cost.
Moog hopes to complete the work by the end of 2020.