Citing 'astronomical' impact, Hornell IDA OKs support for Alstom expansion project

Construction of a new 135,000 square feet rail car manufacturing facility is expected to get underway within weeks

Chris Potter
The Evening Tribune

A new 135,000 square foot rail car manufacturing facility — and the future of several hundred jobs in the City of Hornell — remained on track Wednesday.

The City of Hornell Industrial Development Agency approved moving forward with a financial assistance package for Alstom that will help the city’s largest employer expand its footprint with a new factory at 3 Shawmut Park Dr.

The facility will house construction of stainless steel rail cars. Alstom won a bid in January to supply Metra, the commuter rail system in the Chicago metropolitan area, with up to 500 commuter rail cars. In March, Alstom formally received the initial $769 million order for the first 200 cars.

“It really sets the table for future growth as well. Having the capacity and ability to make those cars right here in the city is a huge feather in the city’s cap,” said Mayor John Buckley. “If you look at the landscape of car shell manufacturing, there’s not a whole lot of places that actually do that part. To be able to do that right here is going to position Alstom well in the future when these future contracts come up.”

MORE: It's official: Alstom receives initial order from Metra for 200 rail cars

The new facility will feature 105,000 square feet of manufacturing space, along with 18,000 square feet for warehouse space and 12,000 for office space. The facility will be an extension of Alstom's presence on Shawmut, complementing Plant 2. The IDA estimates the construction will cost $27 million, while housing another $9 million in manufacturing equipment.

Anticipating the Metra contract last year, the IDA approved nearly $500,000 in Shawmut Park site work to make the land just north of Plant 2 “shovel ready” for development.

That day has arrived.

Project benefit 'almost astronomical' for Hornell 

Plans are underway for the manufacture of a new factory building just north of Alstom's Plant 2 in Hornell to support the Metra project.

The IDA and Alstom will now negotiate a PILOT agreement, which is expected to span 20 years. It will likely include a property tax exemption and a sales tax exemption on construction materials, estimated between $1.7 and $1.8 million.

IDA Executive Director and CEO Jim Griffin said the cost benefit analysis on the project weighed financial incentives versus the impact on the community in sales tax, salary and wages. The analysis came in at a ratio of 112:1, “almost unheard of” for IDA-supported projects, according to Griffin.

“That’s such a benefit to the community. Some of them are three, four, five to one,” said Griffin. “The amount this is going to do for the community over the next 10 years is almost astronomical.”

MORE: Alstom lands Metra contract, 250 jobs for Hornell

The project is expected to generate over $40 million in new payroll in Hornell and create 258 new jobs at the new facility, with most created in the first one to two years of operation. A good chunk of the highly skilled workforce will consist of certified welders.

“We’ll be working with Alfred State and other educational institutions to promote training programs and also hire graduates,” said IDA Executive Consultant Shawn Hogan. “You're talking about an average hourly wage of $25-plus an hour. It’s a great project for our community, our region.”

Griffin expects the PILOT to come together quickly and residents should expect to see construction work underway at Shawmut "within weeks."

Security for the Hornell workforce

The City of Hornell Industrial Development Agency has made the land just north of Alstom's Plant 2 at the Shawmut Industrial Park, seen here over the winter, shovel-ready for future development. That day has arrived with construction work on a new Alstom manufacturing facility expected to begin within weeks.

The Metra contract will also retain around 400 existing jobs in Hornell, a key detail for a city that has experienced boom and bust periods corresponding with the contracts awarded to its primary employer.

Hornell's Alstom operation began a renaissance in recent years after the company won a contract from Amtrak to supply America's first fleet of high speed rail cars. The Metra contract should provide the Hornell workforce with additional security for much of the decade.

“Without this contract Alstom has indicated there was nothing else in the pipeline, which would have resulted in a reduction of their current workforce of about 300-plus jobs,” said Hogan. “It can be job retention as well as job creation.”

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Buckley said Alstom’s Hornell team has been “dynamite” during the process. Griffin also credited Alstom for its work on securing the longterm future of the Hornell workforce.

“The local Alstom people, their team down there worked with us the last 1.5 years to secure this contract. It was not without heavy competition from other places in the state and out of the state,” said Griffin. “It was a joint effort between the IDA, the city and Alstom’s Hornell people. They insisted on the plant being built in Hornell instead of someplace else.”

Chris Potter can be reached at cpotter@gannett.com or on Twitter @ChrisPotter413. To get unlimited access to the latest news, please subscribe or activate your digital account today.