November, 2001
  Incentives Deal of the Month
   from Site Selection's exclusive New Plant database

Empire State ED Strikes Back

New York Gov. Pataki
400-Employee Best Buy
Center Headed Upstate

By JACK LYNESite Selection Executive Editor
of Interactive Publishing

Owego, N.Y. -- Striking back from Sept. 11, Empire State economic development forces successfully parlayed incentives as part of New York's successful strategy in landing Best Buy's ( 400-employee distribution center.

Empire State Development Chairman Charles Gargano attributed New York's landing of Best Buy
to Gov. George Pataki (pictured above). "The governor's leadership on Empire Zones, the
Build Now initiative and . . . I-86 helped make today's announcement possible," Gargano said.

        The Best Buy facility will be built on a 150-acre (60-hectare) site in Nichols, N.Y., located between Binghamton and Elmira near the Pennsylvania line. The Nichols location won out over more than 100 sites in five states, according to Best Buy officials. The 650,000-sq.-ft. (58,500-sq.-m.) facility, which will serve stores in 10 Northeast U.S. states, is the eighth distribution center established by Best Buy, the No. 1 U.S. specialty retailer of consumer electronics.
        "As we rebuild in New York City, we will continue to show the world that major corporations like Best Buy know that the Empire State is an ideal business location," said Gov. George Pataki, who announced the project at Tioga County's Business 2001 show, "Helping America Get Back to Business."
        "Choosing Tioga County for this significant US$40 million, 400-job investment provides tremendous confidence for the upstate economy and sends a strong nationwide message for businesses to invest here," Pataki added.
        Construction of the facility is scheduled to begin in the spring of 2002, with completion projected for early 2003, according to Best Buy officials. The company will transfer approximately 15 managers to the facility. The remaining hires, however, will be local, according to company officials.

Tioga County's Largest Job-Generator in Seven Years

Best Buy retail storeThe Best Buy facility will provide a major economic bounce for the area, according to local and state officials.
        State Senator Thomas Libous (R - Binghamton) called the project "a landmark achievement . . . the single largest creation of new jobs in Tioga County within the last seven years. In light of the current economic climate in the United States, this partnership with Best Buy demonstrates Gov. Pataki's continued commitment to building a stronger economy in upstate New York. With his leadership, New York will show its resilience as we restore our citizens' confidence in the economy."

Best Buy is adding between 60 to 65 new stores annually, most of them spanning 45,000 sq. ft. (4,050 sq. m.).
The distribution center in Nichols will reflect that expansion: Initially serving 59 stores in 10 Northeastern U.S. states, the New York center will eventually serve 140 stores, according to Best Buy officials.

        Ron Dougherty, acting director of Tioga County Economic Development and Planning (, called the announcement "an economic development home run for Tioga County."
        Tioga County had spent 13 years marketing the 150-acre tract, located just off Route 17 (which will become part of I-86). Campbell Soup Co. considered the property for a manufacturing plant in the late 1980s. Subsequently, during the 1990s, a number of other major firms - including DaimlerChrysler, Gap, Lowe's, Micron Technology and Target - investigated the acreage as a possible manufacturing or distribution location.
        Best Buy, however, is the first of the property's many prospective suitors to commit to tying the knot.

'Shovel-Ready' Site Helped Seal Deal

"The pro-business attitude of New York and Tioga County officials was a deciding factor in locating here," said Chas Scheiderer, Best Buy senior vice president for logistics. The wide range of incentives for which Best Buy will qualify underscored the state's pro-business stance.
        "Thanks to a number of the governor's key initiatives, we are able to announce this terrific economic news for the Southern Tier region," said Charles Gargano, chairman of Empire State Development ( "The governor's leadership on Empire Zones, the Build Now initiative and his leadership on I-86 helped make today's announcement possible."
        Scheiderer particularly singled out the Nichols property's pluses as one of the state's "Build Now" sites.
        Created in September of 1998, the Build Now program extends the pre-permitted sites that have been a linchpin in the state's successful "Semi-NY" program to attract semi-conductor plants. The Nichols site's "shovel-ready" status "was a big factor, reducing the risk in building," Scheiderer said.
        Best Buy, state officials said, is also eligible for incentives that include:
  • $500,000 in training assistance;
  • $500,000 for equipment purchases;
  • $400,000 from the New York State Energy Research and Development Authority (NYSERDA at to "help Best Buy construct its new facility in a more energy-efficient and environmentally responsible manner," said NYSERDA President William Flynn, and
  • Funding from the state Dept. of Transportation's ( Industrial Access Program to provide access roads to the new facility.

Empire Zone Benefits
Part of 'Substantial' Incentives

In addition, Best Buy's incentives, which Scheiderer described as "substantial," will include numerous benefits stemming from the site's location within one of New York's 56 Empire Zones. Empire Zone incentives include wage tax credits, investment tax credits, employment incentive credits, capital tax credits, sales tax refunds, tax reduction tax credits, real property tax credits and sales tax exemptions. The incentives allow companies locating in an Empire Zone to operate largely tax-free for their first 10 years. Thereafter, benefits gradually decrease during the 11th through 15th years of operating within an Empire Zone.
        Empire State incentives also include discounts from local energy and communication providers. Best Buy will receive utility discounts from New York State Electric and Gas (NYSEG at
        "NYSEG is delighted to have played a role in bringing this project to the Southern Tier. This is another example of what can happen when we are all pulling in the same direction for the good of our communities," explained William Von Iderstein, NYSEG manager for economic development.
        The area's labor force and quality of life, Scheiderer added, were also major location concerns for the Best Buy project team, which included Deloitte & Touche/Fantus Corporate Real Estate (
        As the site selection team flew home from Tioga County to Best Buy's headquarters in Eden Prairie, Minn., "We said, 'Would you want to live there?' " explained Scheiderer, who wore a "Tioga County Loves You" lapel button at the project announcement. "The answer was, 'Absolutely, yes.' "
Best Buy logo

Best Buy's Aggressive Expansion Plans
Call for Opening 60-65 Stores During 2001

The Northeastern distribution center is part of Best Buy's aggressive expansion plans. The company during 2001 plans to open between 60 to 65 new stores, most of them spanning 45,000 sq. ft. (4,050 sq. m.).
        Best Buy also plans to considerably expand its presence in the New York/New Jersey area, which it entered in the fall of 2000 by opening 15 stores. The company plans to have 40 stores in the New York/New Jersey market by 2004, according to Best Buy officials.
        The company's expansion also includes bulking up its nationwide distribution network. Best Buy, for example, recently announced a 400,000-sq.-ft. (36,000-sq.-m.), $22.5 million expansion of its distribution center in Dinuba, Calif., which will add 115 new jobs.
        Best Buy, which operates 1,700 U.S. stores under six brand names (Best Buy, Magnolia HiFi, Media Play, Sam Goody, On Cue and Suncoast), recorded sales of more than $7.86 billion in the first six months of 2001, a 28 percent upsurge from 2000.
        Despite an overall downturn in U.S. consumer spending since Sept. 11's terrorist attacks, Best Buy has reported continuing strong demand. Company officials attribute the performance to the company's success in selling home entertainment and Internet-based communications devices.



©2001 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.