Loans By County IDA Mostly Successful

Brick City Market and Deli, and its correlating spirits store, is no longer open at 101 W. Fourth St., Jamestown. The business closed in September after opening in July 2015. P-J photo by Dennis Phillips

If something is done right a vast majority of the time, it’s considered a success.

However, when the failure garners more attention than the successes, sometimes the positive achievements are forgotten.

One could argue this is the case when it comes to loans given out by the Chautauqua County Industrial Development Agency.

Those directly involved with the successes of loans given by the IDA will sing their praises. For example, Rob White, Dahlstrom Roll Form president, spoke during the IDA board’s January meeting about how a loan 10 years ago from the development agency helped his company expand from 10 employees to 35.

White was at the IDA meeting in January because once again his company was asking IDA officials for economic development incentives to assist his company move into a larger facility in Falconer.

The Castelli American factory in Blockville closed its doors in December. P-J photo by Jordan W. Patterson

However, when a business closes that the IDA loaned money to, like in the case of Castelli America cheese in Blockville in December, it was big news because 67 jobs were lost.


According to a report provided to The Post-Journal by the IDA, 94% of the time. Between 2006 and 2016, only nine of 118 loans failed.

These loans were provided to businesses to retain or increase employment. The loans also helped county companies expand or purchase new equipment.

“If we had not stepped in, there would have been plenty of businesses that would have been boarded up,” said Rich Dixon, IDA chief financial officer. “At the end of the day, there are a lot of guys working in factories still. That is our job. We take it seriously. We are careful. We’ve done a good job. We’re able to save a lot of businesses and help a lot of businesses.”

The success rate of the IDA loans has led to them having a high loan rating.

“We’re rated at a level of A, which is the highest we can get,” Dixon said.

What makes the IDA’s success even more impressive is the loans they provided are considered “riskier” than similar loans a bank would provide.

“Typically we are not the only the lender in the deal. Typically we don’t have first position. Typically we’re not in the driver seat,” Dixon said.

Because the IDA is usually in the second position of a loan, the development agency has to wait until the first position lender is made whole before recouping any money from its loan when a business has failed.

“The nature of these loans funds is to be risky because a lot of the time we’re in the second position behind the bank,” Dixon said. “Sometimes the collateral isn’t that good, but if it’s for a lot of jobs, that is why we are here. It’s a little more risky than for a bank.”

The IDA’s loan success is rated so high, the U.S. Department of Commerce has reduced how often county officials have to report its status.

“We used to fill out the form every six months, but now we only have to do it once a year,” Dixon said.


One failed loan the IDA is still working to recoup money from is the Castelli America factory. The Italian cheese maker closed its Blockville plant in December, costing 67 employees their jobs.

Dixon said trying to acquire IDA loan funding back from Castelli is different than most cases. He said the first position lien holder is the state Empire State Development. He added that the IDA has to wait until the state is made whole from its loans, around $5.5 million, before the county IDA can try to recoup its funding.

“They are in bankruptcy court now. We’re working with the state and the (bankruptcy) trustee. They’ve hired an auctioneer and they will advertise (Castelli’s) equipment. There has been interest from other cheese companies,” he said. “It takes time. Nothing is fast about this process, especially in bankruptcy court. We’re going to try to recoup every penny we can.”

Dixon said the Castelli America case is an example of how the IDA is placed in a riskier position when loaning money than other organizations.

“It’s not that we do riskier loans. It’s that our position is riskier at the second position,” he said. “The main thing we look at is this going to create jobs or fix a building.”

Castelli America received a $600,000 grant from New York state after announcing that they’d be moving to the former AFA Foods facility. The grant filtered down to the county, which was issued to the cheese company in the form of a $300,000 loan and a $300,000 deferred loan.

Another failed loan is the one provided to the former Brick City Markets in downtown Jamestown. Dixon said the IDA was in the co-equal first position with Southern Tier West Regional Planning and Development Board’s Southern Tier Enterprise Development Organization, also known as STEDO.

“They are in the process of foreclosing on the loan. They will go through and liquidate the equipment. If not all of the money (is recouped) on the equipment, they will foreclose on the property, if need be,” he said. “(STEDO) will work with us. It’s legally spelled out what we have to do. We’re in the middle of foreclosure with Brick City.”

The IDA loaned Brick City Markets $283,445.


Overall between 2006 and 2016, the IDA loaned $33,135,765 through 118 loans. Of those loans, nine loans for a total of $2,432,231 were written off, or not repaid. Dixon said of the $2,42,231 in unpaid loans, the IDA was able to recoup around $438,135, for a total of $1,994,096 in lost loan funding during a 10-year period.

The total number of active IDA loans is 54 for $15,928,903. Of those 54 loans, only two are in default for a total of $995,000.

According to information Dixon provided The Post-Journal, the IDA’s loan success rate lands in between two other state county development organizations. The Albany County Business Development Corporation had a loan failure rate of 2%, with only a loss of $779,881 on a total of $44,104,194 in loans. The Erie County IDA had a 14% failure rate, with $15,516,364 lost on a total of $114,868,217 in loans.


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