Sage Parts Plus Inc., a Melville-based distributor of replacement parts for cargo loaders, baggage tractors and other aviation ground support equipment, has been given preliminary approval for tax breaks from Suffolk County on its planned $1 million renovation of its headquarters.
Sage Parts, which has leased space at its current headquarters since 2008, plans to renovate, renew its lease and purchase new equipment — such as new racking and forklifts — for the building, at 30 Hub Dr. in Melville. The company occupies 55,000 square feet of the 73,127-square-foot property and employs almost 100 people on Long Island.
The company said in its application to the Suffolk County Industrial Development Agency that increased competition in the airline industry has led to smaller profit margins and that operating costs would have to be lowered. To lower costs, the company was considering a relocation of its local operations to lower-cost locations such as Atlanta, Dallas, Memphis or Miami.
The company also said it considered relocating to Windsor, Connecticut, where its sister company TLD, a manufacturer of aviation ground support equipment, operates a 22-acre campus.
“To compete in today’s global marketplace, it is imperative that Sage continue to lower its operating cost,” Mark Pollack, president and chief executive of Sage Parts, said in a statement. “Unfortunately, the costs of doing business here outpaced other locations both domestically and internationally.
“The assistance provided by the Suffolk IDA is essential to ensuring we can improve our distribution center’s capacity, remain competitive in the marketplace, and allow us to retain our valued employees.”
As part of the tax break deal with the IDA, the company will retain its workforce of 96 employees, who earn an average salary of $76,111. Sage Parts has a total of 275 employees across 24 locations in 14 countries.
“It’s almost 100 jobs that we’re keeping here, and they’re well-paying jobs,” said Anthony Catapano, executive director of the IDA. Catapano also pointed to the company’s connection to aviation and the region’s “aviation heritage” as another motivation behind the deal. “This is the kind of company that we want to keep on Long Island.”
The IDA granted preliminary approval for a sales tax exemption of up to $72,450 on renovation costs for the project, including the cost of new fixtures and equipment for the project. The deal also includes a 10-year deal on property taxes, resulting in an estimated $272,250 in savings over the decadelong deal.
In addition to distributing replacement parts, the company provides research and development, product testing, and engineering services. Sage Parts customers include major airlines, aviation maintenance companies and freight businesses such as FedEx.
Sage Parts was created in 1998 when Pollack and executive vice president Michael Bloomfield purchased S.A.G.E Corporation, a Lynbrook aviation equipment company originally founded in 1969.