CFM again requests price reduction

Another year, another iteration of the financial package from the Jefferson County Industrial Development Agency to CFM Food Distributors Inc.

Company officials returned to the JCIDA loan review committee to request a lower purchase price on property in the Jefferson County Corporate Park and reaffirmation of a $375,000 loan and $200,000 grant that were approved in April.

"We touch product now five or six times when we would touch it two to three times if we had more space," Vice President Peter J. Levos said. "Frozen and refrigerated space is really what is needed."

Similar loan and grant packages were approved by JCIDA in 2006 and 2007. They asked for a price reduction price from about $322,600 to $105,000 because of unexpected site preparation costs.

"The earth work has been $900,000," CFM attorney Alfred W. Popkess of Mackenzie Hughes LLP, Syracuse, said. "Our experience far exceeded any expectation of what it would take to prepare the site for the building."

He also cited the economic downturn, which has hurt the company's ability to find financing to build a nearly 80,000-square-foot warehouse and headquarters on the site, and has likely deflated the value of property.

The site work is almost complete and, if the financial package for the project comes together, construction would begin in 2010.

Despite the weak economy, the company has grown consistently over the last few years.

"We still serve the mom-and-pop restaurants," Mr. Levos said. "But we've sought more franchise systems because of their stability. To a certain degree, they're very recession-proof."

Brother and fellow Vice President Paul N. Levos said, "The trucks go out full and come in full, so we have had a huge advantage."

The two described the need for more space than the company has now. It leases cold storage in Syracuse, uses storage trailers at its headquarters at 580 W. Main St. and operates another storage facility in Tifton, Ga.

The brothers said the company is preparing to bid for school contracts again if it can construct the additional space.

"We have a distinct advantage when bidding against other companies in the local area," Mr. Levos said.

The Watertown-based company was founded in 1924 and is in the third generation of family owners. CFM, formerly known as California Fruit Markets Inc., has more than 2,000 customers in 19 states and Puerto Rico, according to company literature.

The committee members felt a tension between being fair to all past and future property buyers in the corporate park and the desire to retain 90 jobs and add 90 more for a local company. All other purchases in the park have been at $20,000 per acre.

"The price per acre is the sale price or what it took to prepare the land in the park," member John Doldo Jr. said. "We're not making a big scoop here."

But, he repeated, he wants to see the 90 jobs stay local.

Committee Chairman David J. Converse said, "Even if we were a private entity, we would negotiate the cost of the lot based on the development price."

Mr. Converse suggested a compromise which would charge the firm $17,500 per acre for the 16.13 acres, a reduction of about $40,000 in price. The committee agreed the parcel was unique in having a steep slope which required blasting and fill.

Then the JCIDA and its local development corporation would give the distribution company a $110,000 grant, which would be converted to a loan if employment fell below a certain level.

The committee charged JCIDA CEO Donald C. Alexander and legal counsel with discussing the proposal with CFM representatives. Mr. Alexander said the agency is looking for operational incentives for CFM if construction is completed, including possible Empire Development Zone benefits.

The full JCIDA board will consider the package at its meeting at 8 a.m. Nov. 5 at 800 Starbuck Ave.