By Joshua Burd
State officials have offered nearly $30 million in tax credits over 10 years to encourage a maker of Mediterranean flatbreads and other foods to expand its footprint in Paterson.
The Economic Development Authority on Thursday approved the incentive package for the firm, Kontos Foods Inc., in connection with a proposal to build a 25,000-square-foot, standalone cold storage unit at 132-142 Peel St. in Paterson. The 30-year-old manufacturer would purchase a roughly two-acre lot for the facility, which would sit about a block away from its existing buildings on 6th Avenue and Wait Street.
Kontos currently occupies a combined 117,000 square feet in those two buildings. According to an EDA board memo, it has also said it would add new machinery and make updates to its current space to increase production, as part of a plan to add 46 employees to handle the expanded operation.
The firm has told the EDA it was choosing between expanding in Paterson and opening a 123,140-square-foot facility in Bethlehem, Pennsylvania, as an alternative. The proposal for Paterson would also result in the retention of 166 jobs, but is the more expensive option.
Kontos was founded in Paterson in 1987 as a manufacturer of Mediterranean flatbread and has since expanded its product line to some 50 varieties, according to the EDA. The products, which include bread for gyros, Asian nans and paninis, are distributed to restaurants, hospitality operators, cafeterias and retailers.
Improvements to existing buildings would include a new floor for the current production facility, parking lot resurfacing and stucco of buildings, according to the board memo. New equipment will include upgrades to a pita bread line.
The expansion would result in a net benefit to the state of $3.9 million over 30 years, the EDA said. Kontos’ capital investment for the project would total around $8.5 million.
The $2.97 million annual award was among five tax credit packages approved under the EDA’s Grow New Jersey program on Thursday. Kuehne + Nagel Inc., an international logistics provider, has proposed extending its current 70,531-square-foot lease at 10 Exchange Place in Jersey City in connection with a 10-year, $14.2 million tax credit offering.
The Switzerland-based firm, which maintains its North American headquarters and Northeast branch office in Jersey City, is also considering a location in Atlanta. It has told the EDA that staying in New Jersey would result in the retention of 227 employees and the creation of another 50.
The EDA, in turn, estimates keeping Kuehne + Nagel would have a net benefit of $64 million over 20 years.
Another applicant at Thursday’s meeting, Tumi Inc., was approved for about $2.9 million over 10 years in connection with a plan to move its headquarters from South Plainfield to Edison. The well-known luggage maker, now a unit of Samsonite International, has identified space at 499 Thornall St. in the Metropark submarket and would make an investment of $4.3 million.
Tumi is also considering an alternative site in Mansfeld, Massachusetts, the EDA said. The company has told state officials it would relocate 110 jobs if it moved out of New Jersey.
The EDA estimates a net benefit of $22.1 million over 20 years.