PERTH — Medical marijuana manufacturer Vireo Health at the Tryon Technology Park is undergoing a major $55 million expansion, building a new 324,000-square-foot building for a project looking to create 180 new full-time jobs.
Vireo Health currently operates a pharmaceutical manufacturing business in the Tryon Technology Park. Contractually, the expansion project is due to be completed by April 1, 2022.
The project was the subject of action and discussion at the Fulton County Industrial Development Agency board meeting last week at the Fort Johnstown Annex. The Perth Town Planning Board is currently also reviewing the project.
Making presentations to the IDA were: Cliff Bedar, vice president and chief operations officer for Cordos Construction of Chicago; and Peter Lilholt, division manager for Civil Engineering and Land Services for C.T. Male Associates Engineering, Surveying, Architecture, Landscape Architecture and Geology, D.P.C.
Officials said steel will start going up for the project by the end of this September.
In response to the state Legislature’s recent passage of legislation legalizing the adult use of cannabis and expanding options for the use of medical cannabis, Vireo Health is proposing a major expansion of its operations in the Tryon Technology Park. Vireo Health is proposing to construct a new 323,982-square-foot facility on Lots 1 and 2. The proposed project is expected to create up to 180 new full-time and 10 part-time jobs within two years.
Construction alone for the project is expected to create 250 jobs.
The IDA owns the park land, where Vireo currently does business for New York state, as well as some adjacent land.
“An appraisal has been completed,” IDA Executive Director James Mraz said of the proposed Vireo expansion site — 336 acres, which consists of 76 acres at Tryon and 260 acres adjacent to the park. The project will include demolition of an existing building.
The IDA voted to authorize the sale of land to Vireo for $1.23 million.
Mraz discussed distribution of lot sale revenues — total payments of $153,998 — associated with the Vireo Health project. The IDA has an agreement with Cushman Wakefield to market the Tryon Technology Park. The agreement calls for Cushman Wakefield to receive 7 percent of lot sales on property sold within the Tryon park. He said that since Cushman Wakefield didn’t bring the Vireo Health expansion project to the IDA, the firm has agreed to accept less.
“They have offered to accept a fee of 5 percent in this transaction,” Mraz said.
Mraz recounted how the IDA board previously agreed to provide Fulton County and the Fulton County Center for Regional Growth 1 percentage point less than the 7 percent to be paid to Cushman Wakefield. The IDA board agreed to provide Fulton County and the CRG up to 6 percent of the sale of lands within Tryon. It was recommended that the revenues from the sale of the 43.1 acres in the Tryon Technology Park be distributed as follows: Cushman Wakefield — $59,230; Fulton County — $ 47,384; and the CRG — $ 47,384.
Payments would be issued at the closing.
The IDA board also authorize the Chairman Joseph Semione to execute an easement agreement with the Gloversville Board of Water Commissioners.
“At present, the lines run across IDA land,” Mraz said.
The Gloversville Water Department owns, operates and maintains the water supply and distribution system at the Tryon Technology Park including: A 12-inch water main that runs along County Highway 117.
Mraz indicated that Vireo Health has requested financial incentives through the IDA for its expansion. The firm filed a project application for incentives.
The project application requests four financial incentives: Payment in Lieu of Tax Agreement (PILOT); sales tax exemptions — $2.3 million; mortgage recording tax exemption — $560,000; and taxable bond financing Real property tax exemptions are estimated at $820,000.
The IDA is scheduled to hold a public hearing on benefits requested for 10 a.m. July 1 at the Senior Citizen Center, town of Perth Municipal Complex.
Vireo will likely partner with a Real Estate Investment Trust (REIT) to finance this project. The likely REIT is Innovative Industrial Properties (IIP). IIP is the current owner of the facility Vireo now occupies at Tryon. If so, Vireo would enter into a ground lease with the REIT. The IDA and Vireo would then enter into a lease and leaseback arrangement with Vireo Health.