From his perch above the baking operation, Michael
Petrucelli narrated the unrelenting march of banana nut muffins, as thousands
of the bumpy brown spheres emerged in a steadily moving phalanx from imposing
"It's like going from the steam room to the shower," Petrucelli said,
referring to the muffins' passage from the ovens, through cooling chambers and
then the spiral freezer. "These muffins do a lot of traveling."
As chief financial officer of Uncle Wally's, the Shirley-based muffin
company, Petrucelli is effusive about the company's beloved muffins and its
recent successes. Uncle Wally's story - it's baked hundreds of millions of
muffins - runs contrary, at least for now, to the usual fate of manufacturers
pressured off Long Island by high energy and transportation expenses.
This week, Uncle Wally's will celebrate a $3-million expansion of its
Shirley bakery from 44,000 to 60,000 square feet and the introduction of yet
another product the company says is a first - muffin dough in a tube, called
Uncle Wally's Oven Luv'n Muffins. And although Entenmann's, now owned by
conglomerate George Weston Bakeries Inc., recently announced that its Bay Shore
plant will stop baking crumb cake and cookies and cut 350 of its almost 1,100
employees in an 18-month period, Uncle Wally's said it plans to hire between 20
and 30 workers this year and add a total of 100 in the next two to three years.
Benefits of Empire Zone
Uncle Wally's - whose co-founder is Wally Amos, formerly of Famous Amos
Cookies - faces many of the same hurdles other manufacturers on Long Island do,
said Lou Avignone, Uncle Wally's chief executive and co-founder. But Avignone
noted that the company's size and culture allow for a nimbleness and an
innovative approach that get lost in the bulk of larger corporations.
Designation as a qualified Empire Zone enterprise, as well as working with the
town, county and utility companies to reduce costs, have helped it thrive and
remain on Long Island.
Certain businesses that are within an area the state has designated as an
Empire Zone can apply to the program, which offers various tax credits for 10
years. It was designed to attract new businesses and enable existing ones to
expand and create more jobs.
"We are very efficient and can produce a tremendous amount of product in a
very small footprint," Avignone said. "And we have significant benefits being a
part of an economic development zone."
But he added that high energy costs remain a challenge.
"Even with credits, we are significantly higher than the rest of the
country," he said.
For the recent expansion, the state's Empire State Development Corp. has
provided the company with $1.5 million, including a $250,000 grant for this
expansion and a $1.08-million loan for machinery and equipment. These funds are
tied to goals, including the creation and retention of jobs, the company must
The Shirley bakery, built in 2001, has received discounted rates from Long
Island Power Authority and the addition will get rate discounts because the
company expanded within the Empire Zone, according to LIPA. The company also
received rebates from LIPA for installing high-efficiency lighting and a
high-efficiency freezer in which the muffins are frozen during a 40-minute
journey up and down a spiral path. KeySpan has discounted 35 percent of the
transportation charges on Uncle Wally's gas bill, saving the company $20,406 in
2006, said Robert Wong, KeySpan's regional director of economic development.
Working past obstacles
Suffolk County Executive Steve Levy said the county worked out a creative
deal when Uncle Wally's encountered an unexpected and particularly onerous
expense that probably would have forced the growing company to look beyond the
Island to expand.
The company had planned on hooking into a sewage treatment system that was
to be completed when it built the Shirley facility in 2001, Levy said. But the
treatment system was delayed and isn't expected to be completed for another two
years, so under the county's requirements, Uncle Wally's would have had to buy
two acres of undeveloped land worth about $250,000 to offset the amount of
sewage that would have exceeded set limits.
Instead, under a deal with the county, the company is renting the two
undeveloped parcels of land for $10,000 a year.
"They felt they needed this expansion and if we weren't innovative in
working with them, they would have packed their bags and jobs and moved off the
Island," Levy said. "We're trying to show that we're a business-friendly
county, accommodating business growth while still maintaining our environmental
The company's designation as an Empire Zone enterprise expires in 2011, as
will many of the benefits that come with the classification. When that time
comes and the company needs to expand, Avignone said he and the company will
have to consider their options.
"As we continue to look at expanding and growing the business, we would
obviously consider options that might be out of state or Long Island," he said.
Rebates and discounts, however, can take a company only so far, some
observers have noted.
"Our incentives are important, but I frankly think they don't give
themselves enough credit," said Ray Donnelly, Brookhaven's director of economic
development. "They're pretty clever guys."
Uncle Wally's early history, like many new companies', was bumpy. The
company has its roots in Uncle Noname Cookies, which Amos created in 1992 after
he was pushed out of the Famous Amos Cookie Co.
Avignone joined him in 1994. They had little success in the cookie market
after two years, ran up significant debt and eventually were forced into
bankruptcy by one of their backers. But Avignone and Amos already had begun
exploring fat-free muffins, a niche that would prove successful. They
eventually named their company Uncle Noname Gourmet Muffins and then, in 1999,
Uncle Wally's Muffin Co.
"We came out of bankruptcy unassisted," said Amos, who lives in Hawaii. "We
grew the business and two years later financed the construction of a new
bakery. The mere fact that we were able to do that is a testament to a great
team of people who were dedicated, skilled and worked their butts off to grow
and prosper [the business]."
JoAnn O'Hagen, Chase president of the Long Island and Queens Middle Market
and a lender to Uncle Wally's, said the company was savvy about its focus on
muffins and the development of its subsequent product lines.
"Identifying a niche is the key to success," said O'Hagen, who said Chase
has been working with the company since the 1990s. "They just expanded and
altered the product line to reflect the world around them. It's that kind of
flexibility to see things that others don't and capitalize on them quickly that
makes this business successful."
Uncle Wally's now has a fat-free line of gourmet muffins, sugar-free
muffins, its regular muffins or its Rich and Moist line and an All Natural
line, free of artificial flavors, colorings and preservatives. The company
recently has added a "smart portions" whole grain muffin as well. And this week
Amos will be touting the company's latest Oven Luv'n muffins - dough in a tube
designed to be baked at home without the mess of batter.
The newest product will "revolutionize the whole baking industry," Amos
said. Or, at the very least, he promises it will be delicious.
The Empire Zone edge
Companies such as Uncle Wally's, with Empire Zone designations, can benefit
from the following:
Sales tax exemptions: An exemption from the state portion of the sales tax
at the point of purchase is available for most goods and services used in the
zone. An exemption from local sales tax may also be available. The exemptions
last for 10 years, provided the business continues to meet the employment test
Real property tax credit: A credit for real property taxes paid based on a
formula that considers job creation, wages and benefits or investments made in
the zone. This credit is also available for 10 years.
Tax reduction credit: A credit against tax equal to a percentage of income
taxes attributable to the zone enterprise. This credit, based on the business'
employment growth in the zone, is also available for 10 years and can reduce a
company's tax liability to zero.
Local benefits: Municipalities designated as Empire Zones may offer sales
tax refunds and tax abatements for property improvements. Many utility
companies (including gas, electric and telephone services) also offer rate
reductions to certified Empire Zone businesses.
SOURCE: EMPIRE STATE DEVELOPMENT CORP.