Firm Picks South Buffalo Site for $100 Million Steel Mill Project

A start-up Dubai-based firm has chosen a South Buffalo brownfield site as the location of a new $102 million steel factory that will employ 172 workers.  The project by Alita USA Holdings is receiving a host of public incentives totaling $10 million along with property and sale tax breaks and low-cost power.  The sale of unutilized hydropower from the Niagara Hydroelectric Power Plant is expected to provide $2 million in funding.  The WNY Power Proceeds Allocation Board recommended the project’s approval this afternoon. 

From The Buffalo News

Plans call for Alita to build a 340,000-square-foot pipe mill on a brownfield site – vacant lot on Rittling Boulevard. The site also will include a separate 16,000-square-foot building that will be used as a laboratory, office space and for storage.

Alita began looking at Buffalo as a potential site for the plant about a year ago, when it contacted the Buffalo Niagara Enterprise business development and marketing group for assistance. The BNE worked with Alita officials to select a potential site for the plant, as well as helping the company determine the type of financial incentives it might receive.

Buffalo was competing with Houston for the new plant.  It is expected to open in 2015 and jobs are expected to average $72,500 a year in salary. 

Rittling Boulevard is located on the north side of Tifft Street west of Hopkins Street.  The project will be adjacent to where Hydro-Air Components constructed a 152,000 sq.ft. facility that opened in 2007.   That company was purchased by the Zehnder Group and renamed Zehnder Rittling.

About the author  ⁄ WCPerspective

Buffalo and development junkie currently exiled in California.

37 comments
c_mon_really
c_mon_really

Alita USA Holdings. "A Dubai-based company wants to spend $102 million building a plant in South Buffalo near the old Republic Steel plant site to make steel and turn it into large lengths of pipe for oil and gas production".  = Fracking

MrKotterImsoconfused
MrKotterImsoconfused

I agree. As a resident of Lackawanna I applaud South Buffalo getting a new Steel Mill but it is also fatal condemnation that Lackawanna will ever be able to handle the Bethlehem Steel site brownfield clean up or its redevelopment.

If Lackawanna cant do it then I vote to merge with Buffalo so that Buffalo can get it done.

Nickel City Nick
Nickel City Nick

I think I heard on the radio this morning that they're expecting 172 jobs.  Can anybody confirm that?

Seydlitz
Seydlitz

Awesome. Anyone keeping track of the number of investments over $100 million in the past year or so?

oscar_da_grouch westsd
oscar_da_grouch westsd

There is another poster whom I forget mentioned SUNY@Buffalo's growing R&D in the material sciences. Particularly nanomaterials and nanotechnology.

It would be nice if this new company could join with the many other local companies in ceramics, gases, chemicals, metals, plastics, etc in partnership with UB.

Help that research find a home in local companies wanting to diversity and expand their markets.

Granted is a wish but its also a smart use of local resources for future job growth.

oscar_da_grouch westsd
oscar_da_grouch westsd

When it gets built, it will not be the steel mill or pipe mill that we have known in the past. Technology has changed. Its still the same basic process but with much more technology, much less pollution and much higher productivity. We will have a resurgence in ships carrying raw materials and ships picking up cargo. Great for our port, rail and truck infrastructure.

I also confirms an opinion I have held for decades. Why didn't this company go to Lackawanna? Lackawanna has said for decades that they should not merge with Buffalo or West Seneca because they can offer less government and lower taxes. Now if that were true then this steel mill would have chosen Lackawanna.

I think the bigger truth is that Buffalo has more political power to offer (city, county, state and federal) aid and low cost power as the 2nd biggest city in NYS than Lackawanna.

This proves to me with great certainty that Lackawanna shouldn't exist. Its time is up. It cant clean or develop the legacy brownfields and West Seneca has no experience what-so-ever which Lackawanna's legacy brownfields.

Id say 2 things:

1) this is a prime opportunity to hold this over Lackawanna and demand a merger with Buffalo and extend our waterfront to Blasdell.

2) who cares if this is temporary because of a natural gas boom. Attract the business and the talent that comes, try to make it efficient enough to diversify into other products if the downturn comes and use the time that we have them to attract other businesses and spin off operations.

grad94
grad94

OMG!

 so, what will they be manufacturing here?

buffalorr
buffalorr

I'd be happy if Buffalo were to become a center of heavy industry once again. As helpful as they are, we need more than Dollar Stores, Walmart's, service industry jobs, call centers etc. If what they're saying is true, average salaries of $72,500 then this may be one of he most important new employers to hit Buffalo in decades.

Jtown
Jtown

Great news! The jobs will be very welcome. 

A couple considerations regarding pipe mills. One question is the sustainability of this business venture. I'm assuming this pipe is being manufactured for the sole purpose of supplying the natural gas boom. So once the boom ends will this business still be around. You might argue that they wouldn't invest 100 million if they didn't have a solid business plan/forecasts...to that I'd argue that they are based in $Dubai$. Second consideration and this is more of a local one for the immediate area is noise mitigation. Someone should warn the residents with houses in the post's picture that these places can be especially loud...pipes banging at all hours of the day. It could be a major quality of life issue as it is in the town that I work in that has numerous new facilities like this. 

Still great news as far as the jobs go. Go Buffalo!

GinghamQuaker
GinghamQuaker

We need as many jobs in this salary range as we can get. Very good news.

buffdude
buffdude

Great news. Hope other companies see this and expand in Buffalo.

flexme
flexme

Awesome news. things are looking up more with each passing day.

schetm
schetm

I think this type of industrial development is exactly what Buffalo needs, but I think the site would be better served as the home of a new football stadium.

BeardedBuffalonian
BeardedBuffalonian

Nice project. You never know this could be a part of something a lot larger.

No_Illusions
No_Illusions

It also has the potential to really turn around that section of South Buffalo.

No_Illusions
No_Illusions

@oscar_da_grouch westsd 


The main reason is that the ECID actually has a comprehensive master plan for the site.

Lackawanna has no plans at all for the massive former Bethleham steel site.

If Lackawanna got their act together, then maybe they could draw some investment in small increments.

No_Illusions
No_Illusions

@grad94 

Most of those employees will be engineers. A lot of modern manufacturing is automated nowadays.

There will be very few actual workers.

buffaloroam
buffaloroam

@buffalorr  

The actual article said 72,500 in total compensation. When you take into account health insurance, life insurance, FICA tax, disability, and unemployment, your probably looking at a job that starts at half that. But still pretty nice. 

 

grad94
grad94

@Jtown 

"I'm assuming this pipe is being manufactured for the sole purpose of supplying the natural gas boom. So once the boom ends will this business still be around."

are we sure about the fracking connection?  pipes are a basic need everywhere.  

No_Illusions
No_Illusions

@Jtown 

Depends. The economic impact of those jobs plus the property tax when its finally levied will have to equal at least 12 million.

Considering the payroll of this place is already at 12 million per annum, that alone ensures that this is a viable endeavor for the city...even if the company does fold in the near future...though considering the natural gas and fracking boom, it could be 2 decades before the company has to rethink its business strategy.

greenca
greenca

@schetm 

It is very unlikely that there will be a new football stadium.  


oscar_da_grouch westsd
oscar_da_grouch westsd

@No_Illusions @oscar_da_grouch westsd 

My point exactly. Lackawanna doesn't have the people or resources for the size and scope of plan needed nor does it have the political power to apply the resources.

In short, it doesn't have a reason to exist as a separate entity. It cant do what is really needed.

grad94
grad94

@No_Illusions

understood, but a steel plant makes stuff out of steel.  what exactly will they be making?

oscar_da_grouch westsd
oscar_da_grouch westsd

@No_Illusions @grad94 

This wont be anything reminiscent of Bethlehem Steel. That was 1900s technology.

Today energy consumption, raw material, pollution and all forms of waste are considered as a cost to be eliminated. There will be laborers but most of the jobs will involve some form of interaction with technology.

PLC's or programmable logic controllers will monitor and execute most of the processes, robotics will handle most of the dangerous activities, the furnaces will be high efficiency for small or large batches.

Very different so even if manufacturing does come back...it wont be the manufacturing we remember 50-100 years ago. It will be very tech savvy, efficient and value added. Buffalo is going to have to raise the average tech skill level of its population if it wants more of these industries.

buffalorr
buffalorr

buffaloroam, yes agree. The fact that the company could be offering those benefits places these jobs way ahead of the Walmart type slave wage retail and service jobs that have become the norm in much of the country.

tjhorner1
tjhorner1

@greenca you doubt that there will be no new football stadium in this location, or no new stadium, period.  

I'd say that the odds of a new stadium for the Bills in WNY within the next 12 years, are way better than 50/50....   As far as this location goes...probably not a top 10 choice.

This announcement is more great news.  Just need more of it.

Spock1
Spock1

@oscar_da_grouch westsd There's no way to know for sure, so if you say you aren't CL, you deserve the benefit of the doubt.  

It's just an interesting coincidence that the oscar name was created around the same time the "abbyr" handle was called our for Christie-louishness.  That and the fact that the content and style of the comments for Oscar-Abby-CL are remarkably similar.  Same applies to the 'Kotter name which seems to have been created at the same time the comments from oscar stopped.

The biggest question now is does Bini get the pin the tail on the Christy-Lou prize for mentioning the Kotter connection in a reply to oscar, or does he have to respond to Kotter directly.    

oscar_da_grouch westsd
oscar_da_grouch westsd

@grad94 @Spock1 

Nope, sorry to disappoint your thrilling pin the tail on the donkey

there is no candy in this piniatta.  Moved here from went to school at UB left and moved back from Cleveland.

buffalorr
buffalorr

I wouldn't say they have no skills, working with the public giving customer service is something to be valued. How well it's done has to evaluated on a per person basis. Value should also be placed on the time they put in from their own lives by working there. They are still putting millions worth of profits into Walmart's etc. profits. These profits wouldn't be possible without them. Whenever I come into contact with a person in a low wage job, I think "but for the grace of God, there go I ".

GinghamQuaker
GinghamQuaker

@buffalorr Yes, paying people to do something that requires no skills is indicative of "slave wage". Regardless, it's definitely important for the city to bring in more high paying jobs.

greenca
greenca

@tjhorner1 

I am doubting that the Bills will stay in WNY after Wilson dies.  Chances are he won't be alive in year 7 of the current contract, and whoever owns the team will take advantange of the escape clause.

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