The future of a New York-based candy manufacturer with Connecticut operations hangs in the balance as it awaits word on its request for a three-year, $14 million loan from New York State’s economic development arm. One thing, so far, is certain: either New York or Connecticut will come out a loser when all is said and done.
Richardson Brands, which acquired Branford-based Gravy Master in 2006, has given New York State a deadline of one to four weeks to come up with the loan, or else the company will consolidate its New York operations of 128 employees into its Connecticut location, said Chief Executive Officer Donald Butte.
“There seems to be sufficient space already in the Branford location,” Butte said. Gravy Master, a spice manufacturer, already has about 70 employees working in Branford. Butte said the company would add 50 to 60 employees to its Connecticut operations if it chooses to leave New York.
The case of the 115-year-old Richardson, which has been very public about its demands, is representative of how companies can use the threat of relocating out of state as leverage to secure hefty, low-interest government loans.
Butte said the company, which has annual sales of $25 million, wants to grow into a $100 million company through acquisitions within five years, but events out of its control have jeopardized Richardson’s growth plans in New York.
Richardson, based in Canajoharie — about 50 miles west of Albany — is losing a strategic partner earlier than expected when neighboring Beech-Nut will move operations to Florida next April. Richardson, which had been purchasing steam heat from the baby food company for almost 50 years, would now have to purchase a $1 million boiler in the coming weeks if it plans to stay in New York.
Butte said the $14 million state loan would be necessary for Richardson to recover from a major flood three years ago. The company’s growth plans have been jeopardized by the incident, Butte said.
“The flood made potential investors very nervous,” he said. “We couldn’t get investment funds because no one wanted to invest because they didn’t know whether the town was going to survive.”
So far, the state has offered $6 million, less than half what the company is requesting, Butte said. The Empire State Development Corp. did not respond to numerous requests for comment over the past two weeks.
Butte said he has not yet contacted Connecticut’s Department of Economic and Community Development regarding possible incentives the agency could offer Richardson.
“At this point, we don’t feel it’s appropriate,” Butte said.
DECD spokesman Jim Watson declined to comment specifically on Richardson. However, Watson said the DECD keeps a close eye on out-of-state companies seeking financial assistance.
“Generally, we reach out to companies we think might want to take advantage of some of the incentives or general benefits Connecticut has to offer,” Watson said
Butte did not commit to completely shutting down Connecticut operations should Richardson secure the $14 million loan.
“There’s a lot of conversation about it, but it’s a very complicated equation,” Butte said.
A poll of employees at Connecticut and New York locations made it seem unlikely any would be willing to relocate during any consolidation process, Butte said.
