Thursday, June 30, 2011

What Does It Take to Get a $430 million Manufacturing Investment

A Lot of Government Help, What Conservatives Call “Job Killing” Government Spending

Niagara Falls, NY is known for three things.  One is the Falls, another is the Love Canal environmental disaster and  the thirdr is a moribund economy that has been depressed since, well, probably since the Depression.  The Buffalo News reports the city getting a new paper mill that will cost its owners $430 million to construct.  Of interest here is what it takes in government assistance to get such an investment.

The Greenpac Mill project, . . .  will receive extensive government incentives, which Cascades executives valued at more than $100 million over a 10-year period.


More than half of the incentives will come from $60 million in brownfield tax credits over a 10-year period. The project also will receive $5 million in Empire Zone tax credits. The Niagara County Industrial Development Agency in December approved property tax breaks for up to 20 years


The project also will receive extensive energy subsidies. A 10-megawatt grant of low-cost hydropower from the New York Power Authority will cover about half of the mill's electricity needs


The project also will receive $3.5 million from the New York State Energy and Research Development Authority

And how many jobs will be created, a little over 100. 

The point: government assistance is an integral part of manufacturing investment, and it takes a lot of it to create jobs. In this case, about $1 million in public assistance per job.   Or as Conservatives would say, about $1 million of job killing government spending per job created. 

1 comment:

  1. whereas jobs can be created downstate for a government outlay of $0 per job created. I don't know, maybe New York State is back to having an infinite amount of money, but if not, this was a dumb idea.