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Lancaster Company Employing 36 Opts to Stay Here
By David Robinson
January 28, 2010
A Lancaster electronics manufacturer that had been courted by development officials in Michigan and the South is poised to remain in the Buffalo Niagara region with the promise of nearly $70,000 in tax savings.
Polyfusion Electronics, a 36-employee company that makes specialized electronic assemblies at a plant on Ward Road, will reject the offers to move out of the Buffalo Niagara region if the Lancaster Industrial Development Agency approves the aid as expected, said Ron Folkman, the firm’s owner.
“We’re glad to stay here,” Folkman said. “I want to stay here, and this will clinch it.”
Folkman said he contacted the Lancaster IDA about possible aid after being approached by economic development officials in Michigan and the Southern U. S. about moving the company there.
Polyfusion Electronics, which had begun to rebound from business it had lost to low-cost competition from China before the recession further weakened its markets, has been trying to reduce its costs but needed relief on its $27,000 annual property tax bill, Folkman said. The tax bill ate up about half of the company’s retained earnings.
The Bank of Akron also has agreed to provide the company financing that will improve the company’s liquidity and its cash flow, said Robert Giza, the Town of Lancaster supervisor who also serves as chairman of the town’s IDA.
“They’re going to stay in business and stay in Western New York,” Giza said. “It’s important to save every job we can because you can’t measure the ripple effect” from Polyfusion’s annual payroll of nearly $1.1 million.
The IDA in mid-February is expected to approve incentives that include a 50 percent reduction in the assessment on the company’s factory at 30 Ward Road for the next five years, along with a sales tax exemption on machinery, equipment, furniture and fixture purchases during that time. The property tax break is expected to save the company about $60,000 over the next five years. The sales tax abatement likely will not exceed $10,000, IDA officials said.
Polyfusion currently has 33 full-time employees and three part-time workers. The incentive agreement includes a provision that would revoke the tax breaks if Polyfusion fails to maintain all of the existing jobs at its Lancaster plant.
Polyfusion officials, however, are hopeful that their business will pick up to the point where they will be able to add six full-time workers and one part time.
The company also is seeking energy efficiency incentives through the New York State Energy Research and Development Authority, Folkman said.