UTICA — A local Ziebart franchise formally opened its new “superstore” at 1430 Oriskany St. West in Utica on Oct. 4, when the business held a ribbon-cutting event with the Greater Utica Chamber of Commerce.

The Lester family (Rich, Dave, and Max) have operated Ziebart franchise stores for 44 years and have locations in Syracuse, Cicero, Binghamton, and Albany, according to a news release from the Greater Utica Chamber. The owners relocated experienced operational and management staff from the Syracuse Ziebart store and also hired local talent from the Utica area to staff the new location.

The Utica store carries the full Ziebart product line, including ceramic z-gloss coatings, rust protection and undercoating services, paint protection film, auto detailing, and truck accessories.

Ziebart, founded in 1959, has a worldwide network of 950 service centers in 33 countries, including about 400 franchise locations, according to its corporate website.

HORSEHEADS — In September, Rick Searles, of the commercial real-estate company CBRE (Syracuse office), announced that Northeast Commercial Interiors, Inc. (NECI) had leased 58,000 square feet of industrial space at the Horseheads Sand and Transloading Terminal in Horseheads. NECI signed a seven-year lease with options to renew and expand the contracted square-footage.

“We’re moving our business from Colchester, Vermont (two miles north of Burlington) to Horseheads,” says Dave Smith, company president and a principal. “The timetable is very tight, because we have to be fully operational by Dec. 15. Eight of our 10 employees are moving with the company, and we need to hire 10 more by November to meet the growing demand.”

Smith launched NECI in 2014 and began operations in 2015, supplying kitchen and bath products to student-housing and assisted-living projects in the Northeast. 

“I started the business with Erik Heikel, reaching out to builders, developers, and maintenance companies to offer a turnkey delivery of interior finishes,” says Smith. “I spent days on the phone talking to industry buyers I had worked with in the past. The first year in business (2015), we sold nearly $1 million, and I knew the concept had great potential. In 2016, Frances McEwen joined the company as a project manager and our sales quadrupled. We incorporated NECI that year and formed Renova Cabinetry, Inc., a company that manufactures cabinets and countertops, but offers no installation.” 

McEwen is the president and a principal of Renova.

NECI generated most of its growth in 2016 in the Greater Syracuse area. “We really got traction in Syracuse,” recalls McEwen. “To meet the requirements of OCIDA (Onondaga County Industrial Development Agency), Dave formed another corporation called NCISource, Inc., which operates exclusively in the five-county area around Syracuse. NCISource has contracts to supply the ICON Tower on Warren Street in downtown Syracuse, a project that includes 89 market-rate apartments; Aspen Heights, a student-housing project on East Brighton Avenue; and The Landings at Meadowood, a 234-unit, luxury-apartment complex in Baldwinsville developed by Morgan Communities [of Rochester]. What we’re finding is that local suppliers are reluctant to undertake these large projects.”

NECI is on track to grow at least 100 percent this year. 

“We’re projecting to close out this year with sales in the $8 million to $9 million range,” notes Smith. “The company already has contracts for 2018 worth $9 million, which should top at least $15 million in sales by year-end. The secret to our explosive sales growth is that we listen to our customers … Looking back, we have already sold 2,500 apartment units and 35,000 cabinets in under three years.”

Smith and McEwen began listening when the two worked together at Rynone Manufacturing, a manufacturer of marble and granite tops, laminate countertops, and casework. The family-owned business is headquartered in Sayre, Pennsylvania and has manufacturing facilities in Waverly, New York as well as a retail kitchen-and-bath outlet. Rynone employs 250 people. 

“Every day I heard the same refrain from our customers: ‘In order to compete, I need lower prices. I also want one-stop shopping, so I don’t have to work with multiple vendors, and I want turnkey projects,’” avers Smith. “Frances and I made multiple presentations to the owners that we needed to change Rynone’s business model in order to respond to the market. The brothers, who are currently in their 60s, weren’t interested in disrupting what had worked for them since the company was founded [in 1945]. Frances and I both left Rynone in frustration.”

Responding to their customers meant changing the business model. “Offering the lowest price-point required sourcing our materials and products from around the world,” emphasizes Smith. “NECI has the experience and contacts to import from countries as widespread as China, Canada, and Brazil. In January [of this year], the company hired Lizhen Chen as a student-intern who was in the process of completing her Ph.D. requirements in nano-biochemistry. Lizhen quickly learned the opportunities for employment in her field were limited, so she joined our company in June as a full-time employee and returned to her native China. As an international buyer, she is now opening up new manufacturing sources for us in China and Vietnam.”

He continues, “In addition to sourcing low-cost products, we also have the experienced staff to oversee our subcontractors and to guarantee the installation of what we sell. When we say NECI is a turnkey operation, we stand behind that term. Listening to our customers also means adding to our current, limited offerings. They want us to expand the concept of one-stop shopping by offering more products, such as toilets, lighting, flooring, sinks, and so on. There doesn’t seem to be an end to the list of requests. There really is a lot of pressure on us to expand what we offer.”

McEwen was the driving force behind changing the business model and moving to Horseheads. “Frances understood that we couldn’t operate conventionally and still compete,” acknowledges Smith. “She convinced me that NECI was not just another company dealing in wood, plastics, and furnishings; rather, we were a logistics company whose role was to make the sale, source the materials, inventory and ship product to the worksites, and oversee the installations. The concept, which requires a staff with multiple levels of skill-sets and experience, is scalable well beyond just the Northeast. Our model also limits the variety of styles and colors for easier inventory management and more product turns. (NECI already inventories more than 7,000 stock-keeping units.) Having bought into the idea of a logistics company, the move to Horseheads made sense, because the area is a major distribution center and shipping is a major cost.”

Amid the relocation to Horseheads, the corporate ownership is changing. Heikel, a 50 percent owner of NECI, is leaving the company by year’s end and plans to sell his shares back. The management triumvirate of Smith, McEwen, and Nate Dutil, the company’s chief estimator, comprise the management team going forward. While sales thus far have been largely in the Northeast and in upstate New York, new sales are popping up along the East Coast. Because the model is so easily scalable, management is already considering Atlanta as another distribution center to handle the growing sales volume in the Southeast. Also, the Northeast Commercial Interiors’ expanding geographical reach is rapidly outgrowing its current name, necessitating changing the company moniker in 2018.

Key executives’ backgrounds

Smith earned his bachelor’s degree in business administration and began his career in building products working in commercial flooring with Milliken and Mohawk Industries in Toronto. In 2005, he transitioned from flooring to custom-millwork fabrication and also became an owner of a millwork company in Ireland. In 2008, he was a sales manager at a millwork company in New England before joining Rynone in 2011 as director of business development with responsibility for national-account management and product development. Smith is a stockholder in NECI, Renova, and NCISource.

McEwen grew up in Waverly and studied accounting at Corning Community College. She joined Rynone in 2003 starting in the accounting and contract-management department, before transitioning 10 years later to sales-and-marketing management. One of her primary functions included product-line development where she created and launched three product lines. McEwen joined NECI/Renova in 2016 where she has been instrumental in developing the cabinetry company and its marketing strategy. She serves as Renova’s president and is a stockholder in the corporation.

Dutil grew up in Champlain, a small town in Northern New York located near the Canadian border, and earned his bachelor’s degree in mining-and-materials engineering at Virginia Tech. He worked for 10 years in the construction-materials division of a multinational mining company before joining NECI. Dutil is the VP of estimating for NECI/Renova and is a stockholder in Renova.

The multifamily market

The timing to launch NECI was propitious. Economic growth following the recession that ended in 2009 “… continues to support strong multifamily fundamentals,” states a July 26 report from FreddieMac titled “Multifamily 2017 Mid-Year Outlook.” The report cites the national labor market which has created on average 180,000 net-jobs monthly, a low unemployment rate, increasing household formations, and a preference by millennials for rental housing. Annual demand for new apartments hovers near the 300,000-unit level, rents are growing at 3 percent annually, and the Federal Reserve has been slow to raise interest rates — three factors that have attracted Wall Street investors. The origination volume of multifamily housing is projected to grow at an annual rate of 3 to 5 percent, a value of $270 billion to $280 billion.

Changing lifestyles and demographics suggest that the U.S. multifamily-housing industry will continue to grow well into the future. The principals of NECI/Renova have positioned the companies to enjoy meteoric growth by listening to their customers and reinventing the business model. 

“The only limit to our growth is finding the right people,” concludes McEwen. “Our profile of a great employee is someone who is passionate about our mission and willing to work hard. The ideal member of our team should be curious and eager to learn and grow. The challenge is finding just the right talent and skill-sets.”           

SYRACUSE — City Electric Company, Inc. announced it has relocated its sales counter and corporate headquarters in Syracuse to 450 Tracy St. 

This facility is just a few blocks away from its prior home on West Genesee St. and will nearly double the available warehouse space in Syracuse to help better serve the firm’s growing customer base throughout the state, the company said in a news release.

City Electric Company says it is a wholesale electrical distributor that has been serving the residential, commercial, and industrial markets of New York state with electrical, solar, and voice data and video products since 1919. 

ENDICOTT — A consortium of businesses, led by three Southern Tier companies, plans to establish research and development and production operations at the Huron Campus in Endicott. 

The group, called Imperium3 New York, Inc. (Imperium3NY), will spend more than $130 million and create at least 230 new jobs over the next five years, the office of Gov. Andrew Cuomo said in a news release issued Oct. 4. Cuomo visited Endicott to make the announcement. 

Imperium3 New York plans to launch a lithium-ion battery production giga-plant, “ultimately ramping to 15 giga-watts of production and hundreds more jobs,” Cuomo’s office said. 

To encourage this effort, Empire State Development has offered performance-based incentives totaling $7.5 million, including a $4 million Upstate Revitalization Initiative grant and $3.5 million in Excelsior Jobs Program tax credits. 

Additionally, Imperium3NY is expected to qualify for an estimated $5.75 million in New York investment tax credits.

“This consortium of local businesses is choosing to stay and invest their next generation technology right here in the Southern Tier, breathing new life into vacant facilities and creating hundreds of good jobs for New Yorkers,” Cuomo said in the news release. “Our investments to improve the business climate and spur economic development across Upstate New York are paying off, and this innovative project is yet another example of how the Southern Tier is soaring.”

The work, those involved

Imperium3NY will commercialize a technology for making “more efficient and less expensive” lithium-ion batteries while operating the state’s first giga-factory. It’ll make lithium-ion batteries, producing three gigawatts of batteries by the fourth quarter of 2019 and growing to 15 gigawatts.

Nearly 10 companies formed the Imperium3NY consortium, which includes three Southern Tier companies that serve “as its backbone.” 

Those firms include C4V of Binghamton, which will provide the core intellectual property; C&D Assembly of Groton, which is supplying electronic board assembly and battery testing; and Primet Precision Materials of Ithaca, which is offering advanced processing of materials

Other New York state companies involved include Rochester–based Kodak (NYSE: KODK) and the Binghamton location of Chateauguay, Quebec–based CMP Advanced Mechanical Solutions. 

The general market for lithium-ion batteries “continues to grow daily” and serves multiple industries, including renewable-energy projects, electric-vehicle manufacturers, cell phone and other electronic-product makers, among many others. Industry experts consider C4V’s batteries to be “more efficient and less costly” than other lithium-ion batteries on the market today, according to Cuomo’s office. 

C4V in 2016 won $500,000 in New York State’s first 76West clean-energy competition, recognized for its “innovative” battery-storage technology. Administered by the New York State Energy Research and Development Authority, 76West is “one of the largest” competitions in the country that focuses on “supporting and growing” clean-energy businesses and expanding “innovative” entrepreneurship in the Southern Tier, as described in the news release. 

Additional consortium participants include Magnis Resources, Ltd., a publicly traded Australian company. It will provide anode materials needed for the consortium to make the lithium-ion batteries. 

Boston Energy and Innovation, another Australian business specializing in clean energy, will provide international sales and marketing opportunities. 

More than 20 international companies have been qualified by C4V as “strategic suppliers of high-quality” lithium, electrolyte, separator, and other “critical” raw ingredients to Imperium3 New York. 

TYRE  — Del Lago Resort & Casino has generated $100.4 million in gross gaming revenue since opening on Feb. 1, according to the latest numbers posted by the New York State Gaming Commission.

The $440 million casino, located just off exit 41 (Waterloo–Clyde exit) of the New York State Thruway in the town of Tyre in Seneca County, has been steadily producing $12 million to $13.5 million in gross gaming revenue in seven of its first eight months — the only exception was June with $11.1 million in gaming revenue.

The casino — which has 1,956 slot machines and 99 gaming tables, including 14 poker tables — has paid more than $30 million in gaming taxes to New York State and local governments since opening, according to the Gaming Commission.

Del Lago Resort & Casino opened its 205-room hotel and the Spa del Lago on July 1. The hotel and spa opened two weeks ahead of schedule. 

The resort says its strategy from the start has been to position itself as “a gateway to the Finger Lakes region.” That includes partnering with area wineries, breweries, cheesemakers, and local shops in the region. To that end, del Lago announced in September that it was “celebrating the fall grape harvest” by buying 3,000 bottles of wine (250 cases) each from Thirsty Owl Wine Company on Cayuga Lake and Glenora Wine Cellars on Seneca Lake. The purchases are the largest single sales that the wineries have received, according to a del Lago news release. It said that the it gave the wine as “gifts” to the resort and casino’s “top guests” that month.

“The sale of 250 cases of Lot 99 to del Lago Resort & Casino is the single largest one time drop we have made to one single account in the history of Thirsty Owl Wine Company,” Jon Cupp, president, said in the release. “We look forward to the synergies between Finger Lakes wineries and del Lago Resort & Casino as we believe it will drive many more visitors to our region.”

Rochester–based Wilmorite, Inc. owns and operates del Lago Resort & Casino.       

The casino-gaming industry supports 50,000 small-business jobs nationwide and “thousands” of them are in New York, the Washington, D.C.–based American Gaming Association (AGA) said during a recent appearance at the Rivers Casino & Resort Schenectady as part of the American Gaming small-business jobs tour.

The event was part of AGA’s “Get to Know Gaming” tour, which aims to educate communities about gaming’s role as a “community partner” in 40 states across the country, AGA said in a news release issued Sept. 19.

“Casino gaming is a strong community partner in New York and across the country where hundreds of thousands of small-business jobs are supported,” Geoff Freeman, president and CEO of AGA, said. “We are particularly proud of our support for minority and women-owned businesses and the unique opportunities that our industry makes possible.”

The casino industry is a $240 billion-a-year industry that supports 1.7 million jobs nationwide, according to the AGA. In New York, gaming employs 14,000 people, supports $827 million in wages and generates $3.6 billion in economic impact, the trade group said.

“Rivers Casino has fast become an important part of our community,” Schenectady Mayor Gary McCarthy said in the release. “Not only does the casino provide jobs, but the entire facility enhances the hard work we’ve put in to making downtown Schenectady a fun place to be and a great place to do business.

Report on small-business impact

Gaming’s “widespread” impact is felt in markets across the country, but has larger impacts in small- to mid-sized communities where local businesses work to “integrate” into gaming operations.

That’s according to a report that the AGA released in February.

In the report, entitled “The Gaming Industry’s Impact on Small Business Development in the United States,” researchers examined nearly a dozen U.S. gaming markets and assessed casino gaming’s direct and indirect impact on local, small businesses.

None of the markets were in New York, and the closest was in Plainville, Massachusetts.

Nationwide, the report concluded that the casino-gaming industry generates $52 billion in annual revenues for American small businesses and supports $13 billion in small-business employee wages. 

In addition, $52 billion in annual small-business revenues target real estate, finance, health care, STEM, manufacturing, information technology, and other industries. STEM is short for science, technology, engineering, and mathematics.

The AGA says its members include commercial and tribal-casino operators, suppliers, and other entities affiliated with the gaming industry.          

NICHOLS — The owner of Tioga Downs says he plans to open the 161-room hotel that’s under construction in early November.

The venue will open Nov. 3 “most likely for just our … top customers,” says Jeff Gural, chairman of American Racing and Entertainment. “And then we’ll probably begin taking reservations … a few days after that.” Gural spoke to CNYBJ on Oct. 10.

Tioga Downs, an entertainment complex offering live harness racing, casino gaming and live entertainment, is located in Nichols in Tioga County. 

Gural indicated the hotel will be known as the Tioga Downs Hotel.

P.J. Clarke’s, the venue’s newest eatery; the events center, and the new spa will open at the end of November, according to Gural. The event center is part of the hotel, he added.

The entire complex will employ between 800 and 900 people, including seasonal employees, says Gural.

Buffalo–based LPCiminelli is handling the construction work on the hotel, while Toronto, Ontario–based Climans Green Liang Architects Inc. completed the design work.

Those same firms are also involved in the construction of the new clubhouse at Tioga Golf Club.

Tioga Downs on April 12 announced it signed a 99-year lease with Tioga Recreation Association for the Tioga Country Club. The facility is located at 151 Roki Boulevard in Nichols, not far from Tioga Downs.

Tioga Downs signed the lease for the facility, so it can add golf to the menu of options it offers customers of its gaming, racing, and entertainment businesses.

 The new clubhouse will include a new dining location, a pro shop, locker rooms, and banquet space. 

Gural wants Tioga Downs to partner with other entertainment outlets in the Southern Tier, including wineries, the Corning Museum of Glass, and Watkins Glen International raceway.

“We’re looking to try to attract people who would be coming up from Philadelphia or New York City to visit these places,” says Gural.