BATAVIA, NY – State officials announced a new start for a not very old yogurt plant.
And once again, it’s being given life with a generous dose of taxpayer assistance.
Governor Andrew Cuomo came to Genesee County to announce that the state will make another investment in the former Muller-Quaker plant, in hopes of restoring the jobs promised 5 years ago for a plant which was built, and then failed.
On August 2, 2012 the governor was at the same location where Muller-Quaker would build a massive yogurt plant, for $205, with $14 million from the state.
The plant opened in the spring of 2013 however, only 2-1/2 years later, it closed and 165 workers were laid off just before Christmas 2015.
The plant was purchased by Dairy Farmers of America, which did not much more than maintain it, before they sold it for $54 million Massachusetts based HP Hood, one of the largest dairy producers in the northeast.
HP Hood will receive tax breaks and state assistance totaling $7 million to bring the plant back to life as a milk processing center, and add a large warehouse, promising to create 250 jobs.
Swing And a Miss.
When asked by WGRZ-TV why he figures Hood will succeed where the previous operation failed, the governor used a baseball analogy to explain that there are no guarantees that it will.
“If you play baseball, when you get in the batter’s box, you should assume that not every pitch is going to be a strike," said Cuomo.
Nor, said the Governor, should taxpayers assume that every venture he is willing to risk their money in will pan out.
"That is the natural business cycle that happens if you want to bring businesses to New York,” insisted Cuomo. “If you want to start ten businesses here, then you better be ready in 5 years to see half of them fail and be ready to re-purpose those facilities etcetera, “he said.
That was not something the Governor expressed when announcing the construction of the plant five years ago, nor is it something critics might say is a very comforting when it comes to risking taxpayer money.
Hoping That if it’s Hood, it’s Good
Empire State Development Director Howard Zemsky noted that unlike the last venture which produced a type of yogurt which Muller Quaker hoped would hook on with consumers, the plant under Hood will now pretty much process milk---and that's about it.
“You know, we’re not figuring out if consumers like milk…we're not breaking new ground in producing milk,” said Zemsky. “So milk is a pretty low risk investment.”
Zemsky also opined that while the ill-fated, joint venture of 2012 Muller Quaker and Pepsi was a “new” venture, Hood is a more well established firm.
"It's not a new venture for this company. It's a very well established company, so I’d say if you were gonna bet on any dairy venture to succeed, this would be it, " Zemsky said. “All that said, of course, there are no guarantees.”
Meanwhile, the governor insisted the state’s gamble is hedged with safeguards.
"They get their tax credits and assistance only to the extent they perform,” said Cuomo. “And when you stop producing the job, or eliminate the job, the credit is terminated and that's the safety mechanism," he said.
At the same time, however, the safeguards Cuomo insists are there have been called into question by the NY State Comptroller’s office, which has roundly chastised the variety of taxpayer sponsored economic development programs under Cuomo as being far less than transparent.
Further, the comptroller has said many of the programs lack reporting benchmarks to even confirm the jobs promised have been delivered, and that in some cases –where benchmarks have been established-- the state has lowered the number of jobs required after the fact, and kept the incentives intact, even though promised jobs have failed to materialize.
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