NORWICH – A recently renewed agreement that exempts Outsourcing Services Group from nearly $50,000 in local property taxes each year would have to be re-authorized if the company were sold, a county Industrial Development Agency official said last week.
At its monthly meeting June 27, IDA Attorney James Downey said potential buyers of the New Jersey-based OSG, who haven’t been named, have asked if the pharmacal company’s current Payment in Lieu of Taxes agreement (PILOT) for its North Norwich plant would automatically carry over to the new owners. He said it would not. However, if the new ownership planned to keep the operation as is, Downey doesn’t see why the board would not approve to continue the PILOT.
“I conveyed that if they planned to take over ownership, loot the company, lay-off the workers and leave Dodge,” Downey said, “that the board would not be inclined (to continue the PILOT).”
PILOTs are administered by the IDA, a state-sanctioned economic development arm. The program gives tax breaks to start-up companies or large employers to help create jobs or retain them.
The current tax break, granted in December, saves OSG-Norwich approximately $47,000 a year in property taxes, President Christopher Calhoun said. The company pays nearly $250,000 in property and school taxes annually.
Calhoun did not return a message seeking comment about the sale.
In June, Calhoun announced he had “strong confidence” the New Jersey-based company would be sold sometime this summer.
“Since its acquisition by OSG, Norwich Pharmaceuticals has met with substantial business success, growing new business opportunities, growing its full-time employee numbers and adding new customers to the business portfolio,” Calhoun said in a written statement. “All of this success has led to significant interest in the business community in acquiring the business.”
OSG-Norwich makes solid dose, non sterile liquid, non sterile semi-solid pharmacal products, along with hydrophilic polyurethane sponges, a popular contraceptive also known as the “Today Sponge.” It currently employs 400.
There have been four 10-year PILOT agreements at the North Norwich site since the 1970s, first under the Norwich Pharmacal company and then Procter & Gamble. OSG bought it from P&G in 2001.
Also at last week’s IDA meeting:
• The board is considering several design concepts for its Earl B. Clark Industrial Park in North Norwich, and voted to have five to ten acre land parcels on the site individually appraised. The park was donated by P&G in mid 1990s. IDA officials say an updated value will help the board better market the little-used site located across from Rea-D-Pack foods.
“If we had a plan we could market it,” said IDA chairman Hugh Kearney. “It’s not going to take care of itself. Let’s get it done.”
The park offers IDA benefits, such as below-market lease rates, sales tax exemption, and is located in the Greater Norwich Empire Zone.
• Clean-up efforts for Trichloroethylene (TCE) ground contamination on Lee Avenue are nearing completion, Commerce Chenango President and CEO Maureen Carpenter said. The Department Environmental Conservation and URS Engineering Corp. have been involved in the clean-up and installation of home filter systems that prevent the toxic cleaning solvent – dumped in the 1990s by past manufacturers in the area – from leaking into peoples’ houses. Most of the work has been funded through state grant money. The nearby Northeast Classic Car Museum on Rexford Street will undergo a similar effort, which should start in the next few months.