MASSENA — A plastics manufacturer is selling its production facilities here as part of a $5.7 million venture that will initially create 175 jobs over three years.
"They're in the process of closing on purchasing the Michelex Plastics operations," said Thomas G. Gramuglia, president of Michelex Corp., a 36-year-old company that primarily manufactures and distributes CD and DVD packaging. Michelex Plastics has been operating out of the industrial Park on South Main Street.
Under the venture, Mr. Gramuglia will have a 25 percent share of the new company being formed: Source Bio-Plastics.
"It's a great thing for Massena," he said.
While Michelex Plastics will no longer exist, Michelex's subsidiary, Michele Audio, will continue operating out of its Willow Street building, Mr. Gramuglia said.
The company expects to be in operation later this year, said Robert F. Rood, president of Source Bio-Plastics.
"We're going to convert it over to biodegradable plastics from the traditional plastics they've been making for years," Mr. Rood said. He also is chief executive officer of Kore Holdings, an alternative energy and financial services marketer in Bethesda, Md., which will have a minor stake in the venture.
While the company has committed to creating 175 jobs, the number could increase significantly, Mr. Rood said.
"We'll eventually be running three shifts a day, seven days a week, so we have the potential for many more jobs," he said.
As part of a $4.48 million incentives package being put together for the project, Empire State Development Corp. will be providing a $1 million Job Development Authority loan, contingent on a pledge of 175 jobs, to purchase the property and equipment.
Terms of the loan have not been finalized, said Patricia U. Pitts, ESD director of state communications.
A portion of the loan will cover the real estate involved and the rest will be for machinery and equipment, Ms. Pitts said. She did not have a breakdown of the amounts.
The real estate portion will have a 20-year term and the machinery and equipment part a seven-year term, she said.
The package also includes possible inclusion in the village of Potsdam's Empire Zone.
ESD asked Potsdam to sponsor a regionally significant manufacturer application on behalf of Source Bio-Plastics, said village planning and development director Frederick J. Hanss, who also serves as Empire Zone coordinator. Potsdam's Empire Zone administrative board will consider the request at its April 2 meeting.
"I've talked to some of the members and they're very interested in this project," Mr. Hanss said.
Status as a regionally significant manufacturer would qualify Source Bio-Plastics for inclusion in the Empire Zone, which would provide wage and investment tax credits. Those credits could be worth an estimated $2.63 million.
The county Industrial Development Agency is sponsoring a $200,000 loan through the Greater Massena Economic Development Loan Fund and is selling the company a building in the industrial park for $600,000, said Raymond H. Fountain, IDA chief executive officer.
"We would normally carry a mortgage on that," he said about the building sale.
However, Mr. Fountain said all of this is still very early in the process.
"We don't have applications yet," he said. "We haven't checked credit yet."
