Product testing firm faces potential clawback of tax breaks from Amherst IDA

A global consumer product testing, inspection and certification company may have to repay more than $175,000 in sales tax relief for failing to maintain a locally specified minimum number of jobs under an agreement of 2017 with the Amherst Industrial Development Agency – even after its review in 2021.

Bureau Veritas Consumer Product Services division officials attribute the lack of more than 60 jobs to the lingering effects of the Covid-19 pandemic and the “big quit,” which prompted the company to cut jobs early in the year. the pandemic, and then running out when he was ready to hire again.

“They are non-compliant and we are reviewing the project in accordance with our clawback policy,” said Amherst IDA executive director David Mingoia.

Bureau Veritas sought to make its case — and secure a lower work commitment — in an Oct. 21 letter to the Amherst IDA, which was reviewed by the agency’s executive committee late last week.

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“We have certainly experienced significant decreases in our workforce over the past few years following the onset of the pandemic,” wrote Kelle Nuzillat, Buffalo’s general manager of operations for the French company, citing a 2020 furlough and a reduction in on-site employment thereafter “as directed by the state.”

“Secondly, we encountered significant problems finding labor to work on site in a very difficult labor market throughout 2021,” she added. “And this year we continue to struggle to retain and find talent, even though we have increased our average salary by around 19% since 2019.”

Mingoia said no decision had been made by IDA, “because the board would like more information”, and could discuss it on December 16 or in January.

Five years ago, Bureau Veritas requested help from Amherst’s IDA to support an improvement in its testing capabilities by consolidating multiple sites in the Aubudon Industrial Park into a single, expanded building at 100 Northpointe Parkway. The goal was to increase operations by 20% to 30%, while attracting more work from across its parent company’s global network, including flammability, bulky product and chemical testing.

As part of the project, Zaepfel Development Co. pledged to spend $7 million on the construction and renovation of the building, which it owned, while Bureau Veritas pledged to invest $2.14 million in the purchase of equipment. Those promises were kept, and Zaepfel received $1.14 million in tax breaks on property, sales, and mortgage registration.

However, for its tax benefits, Bureau Veritas has also pledged to retain 266 full-time and part-time jobs, while creating five new jobs within two years of project completion. Instead, the pandemic hit, sending the company’s local job numbers plunging. As of Aug. 31, 2022, its Buffalo lab had 203 employees and nine temporary workers, according to the letter.

The Amherst Industrial Development Agency on Friday approved $1.3 million in tax relief for a $9.1 million computer product testing lab expansion project. The project will see Bureau Veritas Consumer Products Services consolidate three locations in the city into an expanded building at 100 Northpointe Parkway in Zaepfel Development Co.’s Northpointe Commerce Park. The company said the

The company also employs other workers nationwide who are “paid from our office in Buffalo, but some of whom reside in other states,” including account managers, business development staff and employees. techniques working at customer sites. A few employees are now also working remotely. That would bring the total to 347, Nuzillat said, but “our number of employees is a continuously fluctuating number.”

She also cited the division’s reliance on the retail industry, “which has suffered significant losses and reductions” that affect Bureau Veritas testing and inspections. In turn, she wrote, revenues fell nearly 15% from 2018 to 2022.

Nuzillat requested “a new installment agreement”, with a commitment of 202 employees – combining open positions and full-time equivalents – but as measured in early August, during the company’s peak season. The Amherst IDA typically surveys employment in January to assess compliance.

“We appreciate and enjoy being in Amherst and appreciate the partnership we have received from the city,” Nuzillat concluded. “We really want to stay in Amherst, as we have for 20 years.”

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