SKF’s Al-Tech Loan Paid 15 Years Early
FALCONER — A loan issued years ago to a major Chautauqua County employer was paid off last month and earlier than originally anticipated.
As a result, around $812,000 in loans are available for more business expansion and investment locally.
Chautauqua County Industrial Development Agency officials recently announced that SKF Aeroengine in Falconer paid off an Al-Tech Loan they were issued 15 years early. The loan totaled $1 million for a 20-year period.
“It was paid off after five years, which is way earlier than expected,” said Rich Dixon, IDA chief financial officer.
The Al-Tech Loan issued by the IDA provides companies that are investing and creating new jobs with the ability to secure financing at below-market, fixed-interest rates. IDA officials say it allows companies to grow faster or plan larger expansions that need investment to retain or grow jobs.
Along with other incentives, the Al Tech Loan was issued to the developer who bought 96,000-square-feet of property and built a new world-class heat treatment facility for SKF five years ago. SKF, a lead bearing and seal company, leases the facility.
New hardening and carburizing furnaces were placed in the facility to suit the low volume, high precision aerospace product manufactured in Falconer.
IDA officials say the original developer sold the facility to a new developer who didn’t need the Al-Tech Loan. Officials say the conclusion of the project brings increased economic opportunity for new loan availability through the loan fund.
With SKF’s situation, Kevin Sanvidge, IDA chief executive officer, said it’s a perfect example of why the Al Tech Loan was created. For SKF, the choice at the time was either build the facility in Falconer or South Carolina where the tax burden is much lighter.
“It’s a revolving fund where we loan money out to create and maintain jobs,” he said. “The success that they have with their new furnace, they were able to hire people and maintain jobs and pay it off early so we can loan it out to somebody. It’s just a win-win situation for everyone.”
State, city and county officials also helped to provide various incentives including sales tax abatements and a payment in lieu of tax agreement. Incentives through Empire State Development were also allocated.
Around 500 jobs were retained as a result of SKF staying locally.
“We appreciate the teamwork and the cooperation between all parties,” said Bob Massaro, plant manager for SKF. “The result speaks for itself. Thank you from the SKF team in Falconer.”
According to Dixon, the IDA today has 47 loans outstanding for a total of $10.5 million. The IDA gets back $125,000 a month from principal. Dixon said that means they’re able to issue a normal $500,000 loan every fourth months, if needed.
“(The loan fund) turns over pretty good,” Dixon said.
Funds are disbursed after the project is complete and a certificate of occupancy is secured. Loans have received IDA approval for companies small and large from Bailey Manufacturing Co. in Forestville to Hamister Group’s DoubleTree by Hilton project in the city of Jamestown.
Types of businesses considered for the loan include technology, manufacturing, tourism, agriculture and private developers who have identifiable tenants who are unable to assume or handle real estate obligations.