Tax Breaks Approved For $452M Cummins Project

Sergio Hernandez, left, and Ryan Dernar with Cummins, Inc. talk about the proposed $452 million upgrade to the Busti plant at the Chautauqua County Industrial Development Agency meeting in Dunkirk. Cummins wants to invest in its facility to support its Destination Zero strategy in regards to eliminating greenhouse gases by 2050. P-J photo by Gregory Bacon

Chautauqua County is doing its part to help Cummins Inc. move forward with its proposed $452 million upgrade at its Busti plant by giving a requested break in sales taxes.

On Tuesday, Ryan Dernar with Cummins’ Finance Department discussed the project at the county Industrial Development Agency meeting at the SUNY Fredonia Technology Incubator in Dunkirk.

“We’re investing across our footprint to support our Destination Zero strategy, which Destination Zero is what we’re trying to get to with greenhouse gas reduction by 2050,” he said.

Looking to the future, Dernar said Cummins wants to invest in its south county plant. “The next generation engine portfolio is where our investment is and our Jamestown engine plant is a critical piece of this long-term strategy. We’re evaluating it for additional investment opportunities and as part of this process we’re working with the IDA to understand what’s available at this point in time,” he said. On its application to the county IDA, Cummins writes that “Investments in the Cummins Inc. Engine Jamestown Engine Plant of $452 million is required to have the necessary equipment in place to produce new engine platforms.

The new engine platforms are required to meet global emission standard regulations. The investments are required in order to make the plant financially viable and cost competitive compared to other Cummins locations globally. Assistance is required in order to preserve the current jobs and help the plant be the low cost producer.”

Dernar explained that they anticipate that over the next five years they will invest more than $450 million in that plant.

“Our facility is approaching 50 years old. It does need some infrastructure upgrades which are typically taxable, which is why we’re coming to the IDA to get that infrastructure sales tax exemption. A lot of our manufacturing investment is not typically taxable to begin with but it is a big important part to anchor the amount of jobs that we have there,” he said.

Dernar said they’re excited about their future project.

“We feel this is a very beneficial partnership and it’s something we can really land at the next level through this,” he said.

Cummins is seeking a $3 million sales tax exemption.

“We want to prepare for our next investment for our products and these products will essentially be our products that will produce in 2026,” Dernar said.

The county IDA unanimously approved the sales tax exemption.

After the vote IDA Chairman Gary Henry said the board is excited about what is happening at the local Cummins plant.

“This is very, very exciting. We know these are very competitive, across not just the United States, but the whole world, so we’re certainly excited that Jamestown is being considered for this. We will do whatever we can to help with incentives to make this as competitive as we can,” he said.

Henry noted how Cummins is the largest private employer in Chautauqua County. “We certainly appreciate all the work that you provide and look forward to expansion,” he said.

County Executive PJ Wendel attended the IDA meeting and thanked the board for its hard work.

“It’s exciting to see what opportunities have been afforded to the county,” he said.

The IDA, in its annual report, called last year a “banner year” for investments in the county and they’re already well on their way to match that.

“The county IDA had $500 million worth of investments last year. You’re looking at one company with $452 million in one project. That’s great news in Chautauqua County. Those things happen when we’re doing things right in Chautauqua County. We are making inroads, we have a solid workforce. Can we improve? Sure. We all know that you can improve, but I’m really excited to see what the IDA does every month. Hats off to what you do. Our industry is investing in the future of Chautauqua County,” Wendel said.


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