WATERTOWN — A $20.6 million meat-processing plant that seeks to serve farmers in the region is being planned for construction in the town of Watertown. The project is expected to create about 100 total jobs once it reaches full capacity. The proposed plant was made public in late June by project stakeholders, which currently […]
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WATERTOWN — A $20.6 million meat-processing plant that seeks to serve farmers in the region is being planned for construction in the town of Watertown. The project is expected to create about 100 total jobs once it reaches full capacity.
The proposed plant was made public in late June by project stakeholders, which currently include developer Michael Lundy — owner of the industrial park in which the plant will be built — and three farmers, according to Jefferson County Agricultural Coordinator Jay Matteson, who is helping facilitate the project.
The three farmers — Ronald Porter, Stephen Winkler, and Ronald Robbins — comprise a steering committee that was formed in September, 2014, for the project, says Matteson.
The developers intend to create a new company, likely called New York Meat Company, to manage the facility, according to Lundy. They’ll also create a retail entity, to be called Thousand Islands Meat Products, he adds.
The intended location of the plant has no physical address, Lundy says. He describes it as an undeveloped, 10-acre plot near the intersection of Route 12F and Towne Center Drive.
When the plant is at full capacity, it is expected to process about 200 cattle a day, in addition to between 200 and 300 smaller animals, such as sheep, pigs, and goats, say Lundy and Matteson. It will not handle poultry.
Regional benefits
The purpose of the meat-processing plant is to serve farmers within a 100-mile radius of its location, many of whom currently ship their livestock — about 150,000 cows — long distances to facilities in New Jersey, Pennsylvania, or others that are even farther away, says Lundy.
“Our intent is to start acquiring a percentage of those to process here,” he says.
Having a local processor saves the farmers money on transportation costs, and helps limit the losses that accrue from physical issues cows often endure on such long trips, such as weight loss and injuries, says Lundy.
A large percentage of the cows that are shipped out of the state are known as cull cows — dairy cows that no longer produce enough milk to be profitable. They are typically used for ground beef, the product that Lundy says will comprise the bulk of New York Beef Company’s sales, at least in the early going.
The developers are hopeful that the presence of the facility will help grow the beef-processing industry in northern New York considerably. An expected processing capacity of 200 cattle each business day equates to 52,000 cows per year, well short of the roughly 150,000 that are shipped out of the region.
People that don’t raise beef cows in the region because of the limited supply of local processing facilities, can now expand into that industry, says Lundy. There are only three plants in the area (in Rome, Croghan, and Winthrop) that are certified and inspected by the USDA, according to Matteson.
“In Northern New York, we have tremendous access to good land,” he says. The region’s abundant rain and good PH levels in the soil are beneficial to growing organic grass, says Lundy, who expects the organic, grass-fed beef industry to grow significantly in the area.
New York Meat is expected to take advantage of such an expansion by increasing the percentage of its products that are prime cuts, such as prime rib and whole tenderloin, says Lundy.
The facility
The meat-processing facility is being planned in three phases. The first constitutes the construction of a 42,000-square-foot facility with harvest and production areas that would process about 100 cattle and between 200 and 300 sheep, goats, and pigs (combined) each day.
Groundbreaking for the phase one facility would ideally happen in April, 2016, with it up and running by the spring of 2017, says Matteson. It is projected to produce around 60 jobs, Lundy adds.
Phase two would see a 22,000-square-foot addition be built, with areas for shipping, packaging, value-added processing, and chill-down coolers to store meat at the proper temperatures overnight — meat freezes at 28 degrees — in preparation for further processing, according to Lundy. It would also provide harvest and production space for about another 100 cattle, says Matteson.
Phase two would add another 30 to 40 jobs, according to Lundy.
Phase three constitutes the construction of a refrigerated warehouse that would provide about another 10 jobs, says Lundy. There are a few refrigeration storage spaces available for rent until phase three is complete, he adds. The project is still in its preliminary stages, so no contract for refrigeration space has been signed.
There is no timeline yet for phases two or three, says Matteson, but he expects phase two would be completed no more than three years after phase one.
The types of jobs that the facility will offer include maintenance, different classes of meat cutters, packaging, and administrative.
After phase one is complete, Lundy estimates that the company’s first year in production will generate about $28 million in revenue. Once phase three is complete and the facility is operating at full capacity, that estimate jumps to between $80 million and $100 million, he says.
A Nebraska–based general contractor, called Mid City Design, has been hired by the project developers as a consultant to assist with equipment layout and design, to help maximize the facility’s efficiency, according to Lundy. He says the firm has a lot of experience in this area and has helped meat-processing companies throughout the country.
Lundy emphasizes that all operations at the facility take place indoors, saying that passersby won’t be able to tell that the building is a meat-processing plant.
“I know that some of the media call this a slaughterhouse. It’s not the slaughterhouses of the 1960s and 70s,” he says. The stock pen area will have heated floors so that the animals are warm, he says, a constant supply of fresh water will be provided them, and music will be piped in as well.
Company structure and funding
The developers envision creating a shareholder group — Lundy would like to see at least 100 investors — that will be responsible for securing the necessary funding and selecting the management team of New York Meat Company. The management team would hire the rest of the company employees, says Matteson.
Lundy, who will be a shareholder himself, wants a large portion of the shareholder group to be comprised of farmers. “We want the farmers to be a very large, integral part of this process,” he says.
The project is still so early in its development that the selection process of the company’s management isn’t fully determined, he adds. There will be national search for the top management positions, which are currently envisioned by Matteson as being one plant manager, one sales director, and a person whose job will be to ensure the facility’s compliance with state and federal regulations.
About $17 million of the total project’s $20 million cost is expected to be covered by private funding, says Lundy. About one-third of that will be cash and two-thirds debt, he estimates, adding that it isn’t yet known which bank will provide financial support.
The remaining expenses — between $4 million and $5 million — developers hope to get through federal or state grants, specifically for the facility’s equipment, according to Lundy.
The developers intend to apply to the Jefferson County Industrial Development Agency for a payment-in-lieu-of-taxes (PILOT) program, says Matteson. They also have yet to officially present the project to the town’s planning board, which Lundy says will happen later this summer. The proposal was announced in advance of that presentation so the community wouldn’t hear about it from the planning board first, he says.
Though the end of the year, the developers will be working on getting in place the entity, the partners, the investors, the funding, and proper approvals.
A contingency plan is in place should the necessary shareholders or funding not be attained, says Lundy. Several outside companies would be interested in purchasing the company, a route that project stakeholders will explore if the current plans fall through, but Lundy is very confident that the project will move forward as planned.
Project history
The idea to construct a meat-processing facility in the area was first pitched to Lundy by an out-of-state company. Lundy says he can’t disclose which company, or its state of origin.
That company identified the industrial park — which Lundy owns — as an ideal location, and wanted his company, Lunco Corporation, to be its builder, he says.
The project was to be put on hold, however, when the person who the unnamed company wanted as the plant’s general manager said he didn’t want to move to the area, according to Lundy.
“We didn’t to want see it die, and we didn’t want to see it go to another community,” says Lundy, regarding the idea for a meat-processing plant. Recognizing the economic benefit that the facility could provide the region, he and the other project stakeholders decided to move forward with the project without the unnamed company, which is no longer involved in any way, he says.
Lunco Corporation is the design-build general contractor for the project.
