Otsego gets state funds to open plant

http://www.thedailystar.com/local/local_story_261040035.html

By Denise Richardson
Staff Writer


ONEONTA _ Otsego County was granted $750,000 to help open a manufacturing plant that will produce super-capacitors and create 124 new jobs in three years, state officials said Tuesday.

The announcement was exciting news, officials with the Renewable Energy Development Inc. project said, and the first piece of equipment is to be delivered to the Oneonta facility today.

The Division of Housing and Community Renewal in Albany on Tuesday approved more than $3.1 million in grants in the Community Development Block Grants program. The awards will be used to create and retain more than 445 jobs and revitalize communities in Yates, Herkimer, Cattaraugus, Livingston, Cortland, Orleans and Otsego counties, according to a media release.

"The grants approved by DHCR today and funded through the federal CDBG program will allow us to make significant investments in upstate communities," Gov. David Paterson said in the release.

DHCR Commissioner Deborah VanAmerongen said the grants will help leverage millions of dollars in additional equity, promote economic growth and generate jobs for low- and moderate-income individuals. The program provides assistance to eligible cities, towns, and villages with populations of not more than 50,000 and counties with a population of fewer than 200,000. Projects aim to develop viable communities by providing decent, affordable housing and expanding economic opportunities.

Otsego County will assist with the start up of Renewable Energy Development Inc., a subsidiary of Custom Electronics Inc. on Browne Street in Oneonta. The firm will produce double-layer electric devices for the energy industry, and company officials have said the firm could have 180 or 185 employees within five years. Initial applications of the super-capacitors will be in forklifts and electric vehicles, according to REDI plans.

The Otsego County Board of Representatives reviewed the project and hearings were held before the application was submitted.

``We're thrilled that it's approved,'' Carolyn Lewis, Otsego County economic developer, said Tuesday. ``The company just continues to move forward.''

Of the $750,000 grant, $500,000 would be loaned to REDI and $234,000 would be granted to the firm, with $16,000 going to the county to cover administrative costs, Lewis said previously, and an important benefit of the project and funding structure is that the borrower's repayments will increase money in a revolving loan fund. REDI will repay the $500,000 to the Otsego County Development Corp. at about $70,000 annually, she said, and job creation is a stipulation of the funding.

Of the 124 jobs, about 80 would be for low- to moderate-income people, said Michael Pentaris, chief executive officer of REDI, and the manufacturing jobs will be technicians, assemblers and inspectors. Average wages would be $10.40 an hour, the REDI plan said.

Pentaris said the CBDG grant is an ``extremely significant'' part of the funding plan. Of projected costs of $3.1 million, $2.5 million would be to buy equipment and $600,000 would be working capital.

The Otsego County Industrial Development Agency also has approved a $200,000 loan. The project also is supported with private venture capital, and officials said grants to the REDI project are expected to generate more than $1 million in equity.

Lewis said details are being finalized for a $1 million loan from the Empire State Development Corp. to support the project.

In August, the Oneonta town Zoning Board of Appeals approved a variance that allows REDI to use the building at 118 Winney Hill Road, which is in a general business district, for light manufacturing, officials said.

Delivery of the first piece of equipment is expected today, Pentaris said, and hiring could begin in late October in preparation for product output in spring.

In 2007, the New York State Energy Research and Development Authority entered into a $200,000 contract with Custom Electronics for expansion into the super-capacitor market, and the company spun off REDI.

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