NYCIDA Approves Assistance for Businesses Impacted by Hurricane Sandy
The Madelaine Chocolate Company, the Largest Employer in the Rockaways, Was Significantly Damaged By Sandy – NYCIDA Approves Extension of Payments for Company to Help Put Employees Back to Work
NYCIDA Also Approves Assistance for Fairway to Open New Production Facility in the Bronx – Fairway’s Red Hook Location Experienced Significant Damage From Sandy; Project Will Help This New York Business Get Back On Its Feet
NYCIDA Extends Deadline for Businesses Damaged by Sandy to Apply for the Hurricane Emergency Sales Tax Exemption Program to April 1st – Businesses Can Receive Up to $100,000 in Sales Tax Exemptions for Reconstruction Costs
New York City Industrial Development Agency (NYCIDA) today approved assistance for two New York businesses that suffered significant damage as a result of Hurricane Sandy. NYCIDA today postponed payments in lieu of taxes (PILOT) owed by The Madelaine Chocolate Company in connection with the prior construction of their current building. The company was devastated by Hurricane Sandy and forced to shut down completely, but expects to reopen in the coming months. By delaying this payment they will be able to focus on repairs needed to put its 450 employees back to work. Additionally, NYCIDA today approved a project for Fairway Bakery, a subsidiary of Fairway Market, to open a new 237,000 square food production facility in the Bronx that will help consolidate the company’s various bakery outlets under one roof. Fairway’s Red Hook facility sustained significant damage as a result of Hurricane Sandy, and the store remains closed. Fairway expects to create 86 new jobs as a result of the project. Last week, the NYCIDA also approved Fairway’s Hurricane Emergency Sales Tax Exemption Program (HESTEP) benefits to provide more financial relief to the business to help them recover from Hurricane Sandy. In an additional step to assist other impacted businesses, today NYCIDA also extended the deadline for other businesses to apply to HESTEP from February 1st to April 1st.
“Today we are helping two major New York City businesses impacted by Hurricane Sandy to get back on their feet and return stronger than ever,” said NYCIDA Chairman Seth W. Pinsky. “The damage sustained across the City requires us to do everything we can to help businesses and their employees to recover and expand. To this end, we are pleased to have offered Madelaine Chocolate assistance that will allow this critical company, the largest employer in the Rockaways, to get their operations up and running again. Meanwhile, we are also pleased to be helping Fairway, a major facility of which was severely damaged by Sandy, to consolidate and expand its operations.”
Madelaine Chocolate Novelties, Inc. is a chocolatier company which produces quality chocolate products for worldwide distribution. In 1997, NYCIDA entered into a straight-lease transaction with Madelaine for the construction of a 55,000 square foot building and for improvements and consolidation of its existing facilities into one complex for use in their manufacturing, warehousing, and distribution operations. In October 2012, the tidal surge produced by Hurricane Sandy inundated their facilities, destroying the majority of manufacturing equipment and nearly all of the company’s inventory. It took over a month for electrical power to be restored to the facilities, and the company has only recently completed an extensive clean-up as required by food production regulations.
At Madelaine’s request, NYCIDA today granted a postponement of its January 1, 2013 PILOT payment for $154,681.15 to April 1, 2013 in order to avoid a detrimental impact to its financial health and its ability to rehire and retain its 450 employees, most of which have been out of work since the facilities were damaged. The Company anticipates resuming business operations in March or April of 2013 and expects to be able to make future PILOT payments once business operations have resumed.
Fairway Bakery LLC is a subsidiary of Fairway Market, a food retailer founded in New York City in the 1930s. Now with nine stores, Fairway has approximately 3,500 employees, and offers a large selection of fresh, natural and organic products, prepared foods and specialty and gourmet options, along with a full assortment of conventional groceries. Hurricane Sandy, however, devastated its Red Hook location and that location has been closed since then. While Fairway has been expanding rapidly prior to the storm, its lack of a central produce and bakery operation to supply its stores across the city is inefficient. Currently, produce and bakery operations, including baking and food preparation functions, are disaggregated and occur at certain retail stores that have the capacity to provide these functions.
Today, NYCIDA approved an inducement and authorizing resolution for an industrial incentive program transaction to allow Fairway to lease and renovate a production facility in the Bronx for a centralized bakery, produce processing and prepared foods facility, as well as for warehousing and distribution in support of Fairway’s retail markets. Fairway estimates the project will create 86 jobs within three years. The Company had previously received inducement approval for a project that consisted of leasing and renovating 88,000 square feet in a nearby building, but opted to instead pursue a larger, higher-impact, long-term project at this nearly 240,000 square foot location.
As a result of the devastation Hurricane Sandy inflicted on many New York businesses, NYCIDA established the HESTEP program in November 2012 to provide emergency assistance to impacted businesses by providing sales tax exemptions of up to $100,000 for purchases related to replacement of equipment or reconstruction of facilities impacted by the storm. So far, over 50 businesses have been approved to receive the benefit, and more are expected to be approved. The extension approved today allows for more impacted businesses to submit their applications for HESTEP assistance on or before April 1, 2013.
The NYCIDA also approved a number of other projects today, including projects involving Y Picture Frames Corp, the College of Mount Saint Vincent, and Krinos Foods LLC.
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