Buffalo, N.Y. (WBEN) - The sudden closure of the Sumitomo Rubber plant in Tonawanda caught several in the Western New York community by complete surprise. This includes the folks with the Erie County Industrial Development Agency (ECIDA).
"Our thoughts and hearts go out to the more than 1,500 employees and families that are going to be impacted by this. A pretty shocking decision, and something I think we're all trying to get our heads around at the moment," said John Cappellino, president and CEO of ECIDA.
Over the last several years, the ECIDA has helped local plant management at Sumitomo finance job creation and production expansion at the Tonawanda site. The ECIDA recently approved incentives for two major expansion projects at Sumitomo.
"The IDA offered some incentives to projects in 2017 and also, again, in 2021, both for renovations and expansions of that facility. To date, those expansions and investments had happened, and they were living up to the requirements, as far as their employment and following through," Cappellino detailed. "From that perspective, we were happy to provide those incentives to try and work with the company to secure those new investments at the plant."
Related
Thursday's announcement to cease operations in Tonawanda places Sumitomo in default of their agreements with the ECIDA, and Cappellino will be notifying the company of that default, and an intent to terminate any ongoing benefits.
"Part of the agreement is the plant has to continue to operate. In this case, if they are closing the facility, then those agreements would be voided, and we would take legal actions to terminate those benefits as they move forward," Cappellino noted.
"The way IDA incentives work is, obviously, there's property tax incentives that occur over time. Those benefits would get canceled. Even though the company was approved to receive those, they wouldn't be able to receive those if we terminated those. And then there were some incentives that were provided as part of the build out that we'd be looking at, and what our options are to potentially recapture those payments. That would be a discussion and an action of the Board."
Cappellino adds he knows there are ongoing efforts from local officials to try and convince Sumitomo Rubber to reconsider its decision to close.
"I know the county executive, and I'm sure the governor and others have been involved. We have had some conversations with folks about what potentially could be done, so we're going to be reaching out to see if there are any options to talk to the company, to see if there'd be something that could be done," he added.