Manufacturer eyes in-state move
At San-Mar Laboratories Inc. in Elmsford, co-owner and executive vice president Frank V. Penna heard the news belatedly from a colleague after returning from travel. San-Mar, a contract manufacturer of over-the-counter drugs and health and beauty treatment products on Warehouse Lane in the Elmsford Distribution Center, had been awarded a $5 million grant in this first year of regionally apportioned project funding recently announced by Gov. Cuomo”™s office.
The grant from Empire State Development Corp. will facilitate the private manufacturer”™s proposed relocation from its 135,000-square-foot plant in Westchester to an undetermined site in Putnam County, where it is looking to technologically modernize and expand its operations.
San-Mar”™s was the second-largest award among the 61 private and municipal projects approved this month for a total of $67 million in state funding in the seven-county mid-Hudson Valley region. It topped the $4 million grant awarded the Mid-Hudson Regional Economic Development Council”™s top-ranked priority project, a biotechnology business incubator at New York Medical College in Valhalla.
Yet as the awards were announced, the manufacturer”™s relocation project was a largely unknown entity to some members of the regional council. San-Mar”™s funding application was one of about 300 funneled rapidly through council work groups for ranking and sent to Albany in tandem with the council”™s five-year strategic plan for economic development in the region. The regional submissions marked the debut of a consolidated funding application system designed by the Cuomo administration to streamline agencies”™ reviews of projects statewide.
Having recapitalized the 36-year-old business, “We”™re looking to relocate our facility and modernize it considerably,” said Penna. The company, which also matches holders of intellectual property with marketing partners, employs some 220 workers at its Elmsford manufacturing and warehouse facility. It has averaged about $30 million in annual revenue, Penna said last year.
Penna said the company was considering several sites in Putnam County where it could build a new, energy-efficient plant. San-Mar owners looked at taking over a drug manufacturing facility, “but we would be better starting up from scratch,” he said.
The private business plans to expand “as a technology-driven company,” he said. “We”™re looking for acquisitions. We”™re definitely going to be looking to grow the business.”
“It”™s all kind of being whipped up in the omelet and we haven”™t poured it into the frying pan yet,” he said.
San-Mar Laboratories in 2010 was awarded a grant of up to $750,000 by Empire State Development to buy a new computer system and machinery and equipment used in the production of high-alcohol products. The grant was made to keep the company in Elmsford and from leaving New York or from being sold to a competitor, state officials said last year.
The Jobs Now grant required San-Mar to invest about $1.9 million in improvements and create 115 new jobs over three years. Penna said the company, which had been seeking a low-interest line of credit from Empire State Development rather than a grant, has received part of the $750,000 maximum award.
Aimee Vargas, mid-Hudson regional director for Empire State Development, said San-Mar”™s relocation plans followed an ownership change at the company. The recently announced award is for a different project than the improvements project assisted by ESD in 2010.
Vargas said the 2010 grant contract included a clawback provision ”“ requiring the company to return a portion of funds if job-creation numbers are not met ”“ “which the new ownership will abide by.”
“This is an example of the state investing taxpayer dollars prudently ”“ working with a company to recoup money when obligations aren”™t being met and investing in business growth for the new project,” Vargas said.