An Elmsford manufacturer that stood to be awarded more than $4 million in state tax credits to aid the company”™s move to Putnam County instead will relocate to Pennsylvania by early next year and close its Westchester plant, idling nearly 200 workers here.
San-Mar Laboratories Inc., a developer and manufacturer of personal care and over-the-counter health products, recently notified the state Labor Department that it will close its plant at 4 Warehouse Lane Dec. 31 and lay off 188 workers.
The company in 2010 was awarded a grant of up to $750,000 from Empire State Development (ESD), New York”™s chief economic development agency, for equipment purchases to keep the company in its 135,000-square-foot plant in the Elmsford Distribution Center, where owners agreed to invest about $1.9 million in improvements and create 115 additional jobs.
But those plans changed in 2011 when San-Mar was acquired by a financial holding company, SML Acquisition L.L.C. One of San-Mar”™s founding principals told the Business Journal last December that the company was looking at sites to build a new plant in Putnam County where it could expand its production line and modernize its technology.
Empire State Development this year approved a little more than $4 million in Excelsior tax credits for job creation and retention to assist the company in its move within the state. But a state official said San-Mar owners rejected the tax credits incentive and no contract was signed. State officials were told the San-Mar employee who completed the funding application was not authorized to do so and had been fired.
The company”™s new ownership remains largely a mystery to both state and Westchester County economic development officials. A former San-Mar chemicals supplier in New Jersey, who is suing the Elmsford company for about $150,000 in back payments, said its parent company is based in Massachusetts.
Starting late this year or in early 2013, San-Mar”™s products will be made and packaged in Pennsylvania, where a sister company, Process Technologies and Packaging Inc., is headquartered in Olyphant, a small community outside Scranton. The relocation was announced on the Process Technologies website.
An official at Process Technologies did not return calls for comment.
ESD spokesman Jason Conwall said the state disbursed $250,000 of the $750,000 grant to San-Mar. “No recapture (of those funds) has occurred because they maintained the required employment levels” in the contract, he said.
“If a company receiving funding from ESD fails to reach or maintain specific obligations that are a condition of its funding, ESD has a clawback provision in its contract with the company to recover benefits if job promises aren”™t met,” Conwall said. “These requirements ensure a more performance-driven approach where taxpayer money is only spent when there is a clear, definable and delivered benefit to the taxpayer.”
After the company relocates to Pennsylvania, the state can reclaim a portion of its grant disbursement. “We”™re not going to give a company a quarter-million dollars and have them relocate outside New York state,” the spokesman said.
Westchester County Economic Development Director Laurence P. Gottlieb said the county was never involved in negotiations with San-Mar. He said the company apparently was torn by internal disputes.
“It”™s a complicated story,” Gottlieb said. “It”™s not a clean business loss for New York state.”
“It seems like there are internal battles going on, lawsuits going on within the company, against the company. This is not your typical business loss for Westchester County. The circumstances are beyond the county intervening.”
With the Elmsford company”™s notice of closing to the state, Gottlieb said the Westchester-Putnam One-Stop Employment Center will gear up to assist San-Mar”™s laid-off workers.
