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Firms that received ESD grants met job pledges, audit shows

The Canon Americas headquarters in Melville

The Canon Americas headquarters in Melville Credit: Barry Sloan

All of the Long Island companies and universities receiving state grants met their job promises in 2016, an improvement over the previous two years, according to a new audit.

Together the 22 recipients have created 1,624 jobs since winning support from Empire State Development, the state’s primary business-aid agency, in recent years. They added more than 400 employees between 2015 and 2016.

The 20 businesses and two universities, with a combined payroll of 5,403 in 2016, promised to maintain and create jobs in return for a total of nearly $15.6 million in grants to purchase equipment and make improvements to buildings.

Their 100 percent compliance rate is important because it boosts the region’s ability to attract more aid, local officials said. The Long Island Regional Economic Development Council touts the compliance rate in its annual pitch for state grants and tax credits, vying with councils representing the state’s other nine regions.

Besides the Island, only New York City and Syracuse had 100 percent compliance in 2016. The lowest compliance rate, 72 percent, was in the Mohawk Valley.

In the previous two audits, layoffs at Advanced Energy Systems Inc. lowered Long Island’s compliance rate. Medford-based Advanced Energy has since closed.

The ESD audit also measures the average cost of each job preserved or created. On the Island, the average was $2,885 of grant money per job, compared with $4,267 statewide.

ESD regional director Cara Longworth said the new audit “highlights our success in attracting and investing in industries and initiatives . . . that are committed to growth and job creation on Long Island.”

The top private sector job creators were camera and office machine seller Canon U.S.A. in Melville and drugmakers Contract Pharmacal Corp. in Hauppuage and Hi-Tech Pharmacal Co. Inc. in Amityville.

Canon has added 481 jobs in the past few years. The Japanese company opened a $500 million headquarters in Melville in 2013 for its Americas operation, where 1,591 people now work.

Canon has exceeded the 1,360 jobs that it promised to have in return for $2.6 million from the state. Much of the company’s hiring has been in customer service and support and in digital marketing, said N. Scott Millar, vice president of human resources.

Canon recently consolidated portions of its customer service and support department for office products “and located this function at our headquarters facility on Long Island. This has led to new jobs,” he said Thursday.

Canon’s entry into medical products and digital marketing also has “refocused our attention on hiring cutting edge talent,” Millar said, adding that more hiring is likely. He declined to specify a number.

Contract Pharmacal created the second-highest number of jobs at 450. The drugmaker had a workforce of 907 in 2016, far above the 625 people it pledged to employ in return for a $1 million grant.

Hi-Tech Pharmacal, which is known for its generic nasal sprays, has added 125 people in recent years to a payroll that totaled 415 in 2016. It received a $500,000 grant for plant improvements.

Five of the grant recipients secured state support through a program created by the Aerospace and Defense Diversification Alliance in Peacetime Transition, or ADDAPT. The Hauppauge-based group won $1 million to help small defense contractors purchase equipment and modernize factories.

The companies “didn’t qualify for existing state programs because they couldn’t meet the job commitments, they weren’t able to create large numbers of jobs,” said Jamie L. Moore, who established the grant program when he served as ADDAPT president. “This new program has helped these small and midsized companies to invest in new machinery, to remain competitive — and they are keeping their employment promises, as this audit shows.”

Still, the only company to shrink its payroll in recent years, Wal Machine Aerospace Machining, is a beneficiary of the ADDAPT program.

The company in West Babylon had 18 employees in 2016, three less than it pledged to have in return for $112,290 from the state.

An ESD spokesman said Wal Machine was in full compliance with state regulations because its 2016 job cuts fell short of the threshold for a penalty to be levied.

William Toscano, the company’s CEO, said, “The last year and a half has been on the downside, so I had to scale back the company” because of fewer orders from aircraft manufacturers. “But we are looking good for this year, and we are actually rehiring now.”


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