Schenectady International (SI) Group, Inc. has decided to go green, and they’ve decided to do it in Rotterdam.
The Rotterdam Industrial Development Agency (RIDA) voted unanimously to accept an SI Group application that would authorize the installation of a bio-mass boiler and add seven jobs to the company’s Rotterdam workforce. The financially struggling SI Group currently employs 175 people at its Rotterdam Junction location.
According to the SI Group’s application, a large part of its financial burden stems from the cost of real property taxes. The company paid approximately $800,000 in taxes in 2006.
The SI Group pointed to an increase in the prices of raw materials and fuel costs, coupled with increased property taxes as the reason for its recent financial difficulties.
The cost of the proposed project renovations, which include the installation of a wood-fired boiler, an electrical generator, and other control technologies that will lessen air emissions, will cost approximately $12 million, including local labor and supply purchases.
The boiler could eventually generate electricity for sale on the state grid or by the town, said SI Group officials.
Green energy is really taking off, said Angelo Santabarbara, chairman of the RIDA. `We’re very interested in green energy sources and green building projects. This is a great project for Rotterdam.`
With the agreement, the RIDA moved one step closer to the authorization of a payment in lieu of property tax (PILOT) agreement with the company, which the SI Group said would allow them to remain in business in the town of Rotterdam.
The PILOT would be set for 15 years and would come with a sales and mortgage tax exemption.
The SI Group is located in the Schalmont School District. The PILOT agreement would remove the facility from the tax rolls, but the school would still receive a negotiated amount from the company.
Town Attorney Gerard Parisi, who also provides council to the RIDA, said negotiations with the SI Group have been ongoing with both the RIDA and the Schalmont School District.
Officials for the company said that the green fuel boiler project would help keep costs low, increase jobs and allow the group to continue their contribution to Rotterdam by creating tax revenue without being bogged down by real property taxes. Real property taxes currently cost the SI Group 5 percent of their operating expenses.
The company also has plants in Tennessee, where the real property tax rate is 0.6 percent of operating expenses, and Texas where the rate is 0.2 percent of operating expenses.
The move by the RIDA toward granting the PILOT is the culmination of ongoing discussion between the SI Group and the town. The company gave a presentation about the new technology to the RIDA in early December of last year.
By accepting the SI Group’s application, the RIDA must hold a public hearing, said Parisi. The agency set the public hearing date for Tuesday, Feb. 26. According to Parisi, the RIDA could approve the PILOT after the public hearing, allowing the SI Group to break ground on the project.
The bestowal of benefits by the RIDA will be the last hurdle for the SI Group as the town planning board approved the project last year.
The SI Group is a global producer of alkylphenols, electronic chemicals and phenolic resins. Their products are used to make automotive components, adhesives, plastics, photo-imaging products, paints and other specialty coatings. The company has more than 20 operations in 13 countries.
The Town of Rotterdam Industrial Development Agency is a nonprofit benefit corporation committed to attracting new businesses and expanding existing businesses in the town of Rotterdam.“