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CVS Distribution Center

Southern Tier Economic Growth, Inc.

Construction of a 751,000 sq.ft. , $100 million, 600 employee distribution center on 150 acres in the Town of Chemung, NY. 18 month site search, “Project Avalon”, led by The Staubach Group, later Jones Lang LaSalle. Over 800 sites submitted from 8 northeastern states. The “White Wagon Road Site” was pre-permitted with assistance from Empire State Development”s “Build NOW NY” Program. Bergmann Associates, the project engineer, coordinated Generic Environmental Impact Study to have the rural property re-zoned industrial.

Project Need(s)
The site, located immediately off Exit 59A of Interstate 86 did not have any utilities other than phase 1 electric. All available industrial utilities (water, sewer, electric, natural gas) were only available in neighboring Bradford County, Pennsylvania. During the GEIS, the various utility companies in Pennsylvania provided “Will Serve Letters” to serve the site, should a project occur. Cost estimate $ 9 million to upgrade and construct infrastructure to the site.

Project Solution
The development of the site always planned on utilizing “PILOT Increment Financing” to utilize a portion of the property tax proceeds to finance infrastructure bonds to install utilities. The project had to have a large enough real estate value to support such financing. It was determined that the CVS Distribution Center would have an assessed value of of approximately $ 50 million, and would generate an estimated $ 1.5 million in new property tax revenues. The School District, Town, and County passed PILOT resolutions authorizing 35% of these new revenues to the Chemung County Industrial Development Agency to pay for infrastructure bonds over 16 years. NYSEG agreed to accept redundant 3-phase electric from Pennsylvania and sell the electric to CVS, and provided financial assistance to the project reducing the bond requirements . The NYS Public Service Commission approved natural gas and electric service connections from Pennsylvania in to New York. Empire State Development approved the application by the City of Elmira Empire Zone to include the project as a “Regionally Significant Project”, which concluded incentive negotiations with CVS. The NYS Office of Community Renewal provided a $750,000 grant to offset machinery costs.