While some Schoharie County officials are openly skeptical about the ability of Butternuts Brewing Co. to purchase the Guilford Mills industrial site in Cobleskill, a point man for the project said Thursday he’s optimistic the company can close on the deal by its Oct. 18 deadline.
“That is our absolute goal at this point,” said John Lorence, a representative of Butternuts and its spinoff company, Longhouse Holdings. “We’re going for it.”
The deal nearly collapsed this summer when the project developers — who want to take over the 460,000 square foot site to brew craft beer there — unsuccessfully asked the Schoharie County Board of Supervisors to have the county hold a second mortgage on the property because they were having difficulty lining up financing.
A majority of the supervisors said they found such an arrangement too risky for the county, and gave the company until one week from today to close on the purchase. If the deal is not completed, they said, the county would shop the property — one of the largest industrial sites in the region — to other businesses.
Schoharie County Planner Alicia Terry said she is working with Butternuts Brewing with an eye towards qualifying the company for the new Start-Up N.Y. program touted by Gov. Andrew Cuomo. Under the plan, the company would work with the State University of Cobleskill to develop programs that would be linked to the curriculum of the college. That could make the company eligible for the tax-free zones that Cuomo wants to set up at college campuses, Terry said.
However, no regulations or guidelines for Tax Free New York have yet to be issued by the Cuomo administration, Terry said.
The program has been knocked by the conservative Tax Foundation as a gimmick. The organization this week ranked New York’s business climate as the worst in the nation and suggested the state focus instead on broad-based tax reform.
Terry said if the tax-free zone status could be extended to the Guilford Mills complex, it would enhance the ability of Butternuts Brewing to attract more tenants to the site.
“We want to fill that building,” she said.
But whether it will ever be filled by Butternuts Brewing/Longhouse has become an increasingly remote possibility, in the view of County Treasurer William Cherry.
When the Board of Supervisors meets in one week from today, he said that he doubts the brewery company will be prepared to close on the property.
“Certainly, I don’t recommend extending that deadline any further,” Cherry said. “I think the county should list that property with a different realtor and get a new market analysis. I think it’s long past time that that property is put on the open market. Let’s see what the real value is on the open market.”
The Guilford Mills property has been appraised at nearly $4 million. The pending agreement calls for Longhouse to purchase it for $2.5 million. A significant amount of that — up to $1.5 million — would be returned to the company based on the number of workers it hires. The deal calls for the company to get $15,000 for each job it creates after the first 10. The cap for the total it could potentially receive has been set at $1.5 million.
Nearly two years ago, the Cuomo administration awarded a $175,000 economic development grant to the Cobleskill project and hailed it for its job-creating potential.
No jobs have been created there yet.