PepsiCo

The Haskell Company, general contractor on Project Wave, and PepsiCo both pledged today to hire, whenever possible, local subcontractors, and say they've been following that practice from the beginning.

In fact, both companies say they have a non-binding agreement with the Genesee County Economic Development Center to hire local workers.

Union representatives from Rochester held a press conference today outside the building site at the Genesee Valley Agri-Business Park and insisted that Haskell is not awarding enough contracts to builders from Western New York.

Dave Young, president of the Rochester Building and Construction Trades Council, as well as business manager of IBEW Local 86, told reporters to just walk through the parking lot (if allowed) and check license plates on the trucks pulled up behind the construction trailers.

"Pepsi has hired an out-of-state general contractor who is bringing up employees from Texas, Florida, North Carolina and Virginia," Young said. "They're bringing them from everywhere but right in here New York State."

Young made his remarks flanked by union members -- Young said he represents 15,000 workers, 15 percent of whom are out of work -- and in front of a backdrop of earth movers grading the construction site.

The earth movers are owned and operated by Zoladz Construction, based in Alden.

Young (pictured) said the one solid piece of evidence his group has is a video he and some colleagues produced yesterday during their walk-through of the construction site parking lot.

When pressed to name out-of-state contractors who have been awarded contracts, Young named one, an electrical contractor out of Kentucky, but said he couldn't remember the names of the others.

He said the bid process for construction work such as this lacks transparency, which makes it hard to know for sure who is being hired for what jobs.

Yesterday, Steve Hyde told The Batavian that 50 percent of the contracts for the project have been awarded and 80 percent of those have gone to Western New York contractors.

Dave Balz, a VP with Haskell, said he didn't have the information in front of him to be able to confirm Hyde's numbers, but said Haskell is firmly committed to hiring local labor on all of its projects.

"In my experience, every community is concerned about the local work force and the local workers," Balz said. "We respect that concern. Local contractors with a good safety record are always welcome to bid on our projects."

Haskell signed a non-binding agreement with GCEDC to hire qualified subcontractors from the local area (which covers Genesee County as well as the surrounding counties), Balz said.

According to Scott Gilmore, a spokesman for Pepsi, the company signed a "local labor pledge" with GCEDC.

"Our pledge is to use a fair and competitive selection process for the construction of the new manufacturing facility, with a view to using as many New York State and local subcontractors and suppliers as reasonable," Gilmore said in a statement.

"As with any pledge of this nature, it is not legally binding, but it is a reflection of the goals and standards we seek to maintain as we proceed with development of the state-of-the-art dairy and yogurt production facility in Batavia, New York."

Gilmore also wrote, "We are committed to providing a measurable, positive impact to the Upstate local community and surrounding areas through the use of available, competitive local labor as we construct a state-of-the-art dairy and yogurt production facility in Batavia, New York."

Among Young's request is that GCEDC create a local labor requirement in its contacts with businesses, saying that the Monroe County IDA has such a requirement in its contracts.

The Batavian spoke briefly with a spokeswoman for COMIDA who said at first the claim was true, but when asked if such agreements were binding, she said she would need to double check. We've not yet heard back from her.

As for the video presented by the union, Balz said he would let it speak for itself, adding, "We are still early in a very long-term project to build a state-of-the-art yogurt plant. As things proceed on site, we intend and will take action on our pledge to do our very best to include local participation."

Previously: Union officials making waves over alleged out-of-state hiring practices of Wave Holding

The picture came a bit clearer today at the annual Genesee County Economic Development Center luncheon on how the agency landed a $206 million joint-venture Greek yogurt plant for Batavia.

Mark Koenig, director of engineering and technology at the PepsiCo Global Nutrition Group, said while there were a few reasons Pepsi and the Theo Muller Group picked the Genesee Valley Agri-Business Park for Project Wave, a key was getting site-grading permits within 15 days.

Koenig, who heads up similar projects for Pepsi all over the world, lost a bet with Chris Suozzi, VP of Business Development for GCEDC.

"I bet him my house, my wife and my salary that he couldn't get us permitted in 15 days," Koenig said. "I've never seen a greenfield site get permitted in 15 days. I said, 'there's no way.'"

He added, "This team delivered."

The 15-day permitting process allowed Wave Holding LLC to fast-track its development plans, which Suozzi agreed after the meeting was absolutely critical in bringing the project to Batavia.

Without the 15-day permitting, Pepsi and Muller would have been looking at a 30-month process to get its new Greek yogurt products to market. The current timeline is 18 months, all because Town of Batavia officials were able to move the permitting process along quickly.

Earlier this week, GCEDC CEO Steve Hyde told county legislators that Souzzi was instrumental in getting Batavia from the B-list for the project to the final four possible sites.

Koenig also said of critical importance to Pepsi and Muller was the world-class dairy industry in Western New York.

"This is an ag area that is the best in class and that's why we're here," Koenig said. "You have a good milk supply and your milk is the best in its class."

It also helps that from Batavia, Wave Holding can easily reach a third of the potential market in the U.S. for its new Greek yogurt.

Pepsi partnered with Germany-based Muller, Koenig said, because Muller has proprietary recipes and world-class technology for producing yogurt.

The incentive package put together by NYS and GCEDC was also important, Koenig said, but Pepsi was also impressed by the warm welcome the company has received from the community.

"The community support has been fantastic," Koenig said. "All signs say this is going to be a success with the community for years to come and in future growth."

Top: Koenig; bottom, Hanno Lehmann, a senior project manager from the Muller Group.

PepsiCo and the Theo Muller Group -- partnering on Project Wave in Batavia -- will receive more than $11 million in tax relief for the planned yogurt plant in the Genesee Valley Agri-Business Park.

The incentive package was approved by the Genesee County Economic Development Center Board on Monday.

The PILOT on the project -- relief from taxes on the increased value of the assessment -- is 100 percent for the first six years and 50 percent in years seven through 10.

The total PILOT abatement is estimated at $5.6 million over 10 years.

The companies will also receive $5.4 million in sales tax abatement on materials and supplies for construction of the facility.

The project will add 186 new jobs to the local economy, and early planning for the plant projected as many as 600 jobs by 2033.

Wave Holding, LLC (the company formed by Pepsi and Muller for the project) will spend $206 million on construction of a 363,000-square-foot facility.

Construction on the project began in November.

The agreement calls for the first 186 jobs to be filled within three years of Wave Holding receiving a certificate of occupancy.

GCEDC competed with shovel-ready sites in Avon and Pennsylvania.

According to a GCEDC press release, for every $1 invested by Waving Holding the local economy will benefit by $14.47.

The governor's office is announcing today that PepsiCo along with a German dairy company, is building a Greek yogurt plant at the Genesee Valley Agri-Business Park.

The announcement confirms reports first published exclusively by The Batavian in November on the name of the company behind the once-secretive Project Wave.

The facility will employ 186 people in the first three years, according to Steve Hyde, CEO of the Genesee County Economic Development Center.

"This validates our strategy of building shovel-ready sites and validates that our community and our region are well positioned for companies to locate here," Hyde said. "For a Fortune 50 company to validate our strategy -- I'm tickled pink to have a company like that commit to come here."

The plant is a joint venture between PepsiCo and the Theo Muller Group.

GCEDC helped spearhead negotiations that involved Empire State Development  providing PepsiCo with a $5.7 million PILOT tax abatement over 10 years and relief from $5.4 million in sales tax on construction materials and office equipment.

Hyde said Project Wave is the biggest new manufacturing operation to come to Batavia since Sylvania opened its plant here in 1953.

We've heard for some time that while PepsiCo is paying for grading for a possible construction of a food processing plant in Batavia, the same work is "being done in three other locations."

One of those locations is in Avon, and as WHAM13's Sean Carroll discovered yesterday, no site work is taking place in Avon at all.

At the same time, however, the economic development directer in Livingston County says the site is much closer to being "shovel ready" than the Genesee Valley Agri-Business Park. His park, he said, doesn't need a USDA grant for sewer and water because it already has all the infrastructure in place.

"If they chose this site, and we made it very clear, literally they could plug in and all the utilities are in the ground and there's no infrastructure needed here or at the sewage treatment plant," Rountree explained

While Genesee County clearly has the lead in the race to land the project, Livingstone County isn't giving up.

The support of a U.S. Senator and the fact that dirt is actually being moved at the Batavia site appears to indicate Project Wave’s final destination may only be a formality at this point in the process. Yet Rountree and his team are staying optimistic after an aggressive pitch that included top representatives from Barilla.

Either way, regional dairy farmers will be pleased with either outcome.

"I think for the dairy industry in this area specifically it spells a good feeling about long-term stability," Coyne explained. "To have end-product manufacturing this close, it just adds to the confidence that we can invest in our own farms long-term and be able to be in business."

The other two supposedly competitive sites are in Pennsylvania. A contractor familiar with the project told me some time ago that those sites are graded and have infrastructure in place, but we currently have no way to confirm that assertion.

Press release:

Today, Senator Charles E. Schumer called on the U.S. Department of Agriculture to provide several hundred thousand dollars in federal funds for sewer and water infrastructure work to prepare a Genesee County site to host a massive food processing plant.

Build out of the new plant will occur in two phases and could bring hundreds of jobs to Genesee County over the next several years. The Genesee County Economic Development Center is currently preparing a site to host a 363,000-square-foot manufacturing facility, capable of hosting 300 to 400 jobs just three years after it is completed.

The GCEDC is currently finalizing a contract with a food producer for the site, and is seeking federal funding to cover part of the costs of infrastructure improvements to ensure that the site is compatible with the needs of the food company. Today, Schumer called on Secretary of Agriculture Tom Vilsack to provide $300,000 to $500,000 in USDA funds for several projects that will ensure the site is ready to serve as a major job creator in Western New York.

“This massive plant could be a game-changer for Genesee County and Western New York,” Schumer said. “We can’t let inadequate sewer systems and wastewater lines, stand in the way of jobs. The USDA should realize the massive potential this project has and provide the seed funding that will help grow jobs and economic prosperity in the county.

"The funds are there to spur development and USDA would be hard-pressed to find a better return on their investment than this new plant. Secretary Vilsack should do the right thing and help us make these infrastructure improvements as quickly as possible to ensure that we don’t miss out on a chance to bring hundreds of good-paying jobs to Upstate New York.”

To ensure the site is ready to host the manufacturing plant, GCEDC must complete $1.8 million in infrastructure upgrades to the site. These upgrades include the construction of a second access road into the park, the addition of a new turning lane and road re-striping at the site’s main entrance as well as up to $500,000 for wastewater and sewer pump station upgrades. The GCEDC is seeking $300,000 to $500,000 in USDA rural development funds to complete these upgrades.

With Schumer’s encouragement and support, GCEDC plans to apply for funding through the USDA Rural Business Enterprise Grant Program. The application is due to USDA in April and funding would be awarded in June. Schumer noted that in 2010, Genesee County applied for and won over $200,000 under this program to build out sewer infrastructure to land the Alpina Yogurt Plant, which will serve as another major job creator for the county.

Schumer is pushing the USDA to help Genesee County build on this success by providing funding that will help the county ensure that the site is prepared to host a major food manufacturer in the months ahead.

In his letter, Schumer wrote, “Simply stated, securing USDA funding to complete these new upgrades will bring this $247 million project and its associated 300 jobs to Batavia, NY. As such, and with my full support and encouragement, GCEDC is submitting an application for Rural Development funding by the April 2012 application deadline.

“Funding this upgrade will create an enormous return on investment. Already New York’s rural and agricultural regions are quickly becoming centers of tremendous job growth due to the rise in yogurt and other food processing. This new food processor will join the ranks of the 900-employee Chobani Greek Yogurt manufacturing facility in New Berlin, NY, the 240-employee Fage plant in Jamestown, NY, and the 50-employee Alpina yogurt facility in Batavia, NY.”

CLARIFICATION: Rachael J. Tabelski, with GCEDC, said the USDA grant is intended to fund sewer improvements. Needed upgrades at the site include a secondary roadway and aquifer water.

Previously:

• Likely buyer for 'Project Wave' plant is PepsiCo
• Expert: Batavia poised to become yogurt capital of Northeast

The possible "yogurt cluster" in Batavia is part of a statewide trend in the manufacture and distribution of Greek yogurt, according to a story just published by the The New York Times.

Alpina Foods, the United States arm of a major South American dairy company, is building a $20 million plant in Batavia to make Greek yogurt topped with granola. And state economic development officials are negotiating with another major food maker to set up a dairy products plant in the same area, creating the possibility for what one executive called a “yogurt cluster.”

Of course, readers of The Batavian (and no other local source in this case) know the "major food maker" is PepsiCo.

However, I spoke to some dairy product insiders recently who don't believe yogurt is what PepsiCo is planning. They said they expect Pepsi to announce a dairy-based nutrition drink.

More from the Times:

National retail sales of the thicker style of yogurt more than doubled last year, jumping to $821 million for a 52-week period ending in October ...

New York’s dairy farmers are among the biggest beneficiaries of the public’s love affair with Greek yogurt, since it typically takes three times as much milk to make a pound of Greek yogurt as it does for regular yogurt. “This is a ‘once every two or three generations’ situation,” said Bruce Krupke, executive vice president of the Northeast Dairy Foods Association. “All of the right forces have come together to make it very attractive to build in New York state.”

Data compiled by the New York State Department of Agriculture and Markets shows that the state produced 368 million pounds of yogurt in 2010, nearly 40 percent more than the previous year. Over five years, production rose almost 60 percent. Much of that increase is for Greek yogurt production. ...

The Greek yogurt boom has translated into jobs in rural areas of New York that badly need them. Chobani (a brand of Greek yogurt) said it currently employed about 900 people in New York and expected to add about 100 more. Fage said it had about 240 full-time employees and expected to add about 150. The new Alpina plant in Batavia will employ about 50 people.

We're still in a wait-and-see mode about Pepsi and how the rest of the ag park will fill out, but this was some interesting information from the NYT.

Read the whole article here.

The Town of Batavia is set to award a $300,000 grant to Genesee Economic Development Center for further infrastructure development at the Genesee Valley Agri-Business Park.

The town board approved a resolution in a special meeting Wednesday night setting a public hearing for 7 p.m., Dec. 21, which is a precursor to formerly approving the grant.

The funds will be used to construct a water line for the park. 

Part of the funds, $100,000, were granted to GCEDC in January 2010 for construction of electric transmission lines, but those funds have not be spent, so GCEDC requested that the $100,000 be combined with another $200,000 for the water line project.

"Without infrastructure, we cannot continue to attract business to that park," Supervisor Greg Post said. "It gets us and our partners in a much better position for that construction. I don't think anybody anticipated how quickly this project (Project Wave, or the possible PepsiCo yogurt plant) has moved forward. I am happy to be in this position to utilize money like this."

I went out to the Genesee Valley Agri-Business Park this morning to meet WHAM13's Sean Carroll and the amount of progress that has been made by construction crews since Tuesday was noticeable.

It was impressive seeing more than a half-dozen pieces of heavy machinery moving around the 81-acre parcel at breakneck speed. There is a clear sense of urgency to complete phase one of construction before the worst of winter sets in.

And seeing the sewer lines being installed felt like another piece of the puzzle falling into place. The Cedar Street sewer line connecting Main Street and the ag park was only finished last week.

PepsiCo started construction as soon as the sewer line project was complete, even though not too many major construction projects in WNY begin in the middle of November. Somebody is pretty serious about being ready to begin physical plant construction in the spring.

Carroll's report tonight on Rochester's Channel 13 will be not just about Project Wave, but the scope of the uptick in activity at the ag park and what it means for Genesee County.