Finlay Extracts and Ingredients USA, Inc. (Finlay) is the American operator of Finlays, a global leader in tea and coffee extracts producing flavors for the food, beverage, and dairy industry. Founded in 1750, Finlays is wholly owned by the Swire Group, a highly diversified global business group, which has been in operation for 200 years. In 2014, Finlays purchased Autocrat LLC of Lincoln, Rhode Island. With this acquisition, Finlays expanded its tea and extracts business to include Autocrat’s business lines. Since this acquisition, Finlays has specifically identified growth opportunities in the ready-to-drink market. This growth can now be captured by the American operations of Finlays, which is considering the launch of a two-phased manufacturing project proximate to Autocrat’s existing operations in Lincoln.
Finlay is proposing a two-phased project totaling 93,800 square feet in the Quonset Business Park. Phase I would consist of a 28,800 square foot flagship research and development facility with a pilot plant, with Phase II as a follow-on 65,000-square-foot full-scale manufacturing and distribution plant. As part of this project, the Company has committed to hiring 73 new full-time employees at a median salary of $56,056 by 2019. The new facility will require an estimated $54.3 million investment for construction and fitout. The Corporation awarded the Company an incentive package consisting of tax credits under the Qualified Jobs Incentive Tax Credit Program and the Rebuild Rhode Island Tax Credit Program.
Finlay has negotiated a letter of intent to lease a 15.7-acre site in the Quonset Business
The Company estimates a Project Financing Gap of $1.9 million.
In response, the Corporation has negotiated an incentive package to the Company valued at approximately $1.9 million, consisting of Qualified Jobs Incentive Tax Credits and Rebuild Rhode Island Tax Credits.
Based on current salary estimates, Finlay would be eligible for annual Qualified Jobs Incentive Tax Credits of approximately $153,075 by year 2020, when all 73 full-time positions are projected to be filled. The recommended term of the tax incentive agreement is ten years, and Finlay has indicated that it will commit to maintaining the new jobs in Rhode Island for at least the twelve years required. The total credits are anticipated to be approximately $1.4 million based on the projected hiring schedule.
Based on current project estimates, Phase I of the proposed project would be eligible for Rebuild Rhode Island Tax Credits of up to $176,972 over five disbursements. This amount would be reduced on a dollar for dollar basis by the value of the sales tax reimbursement.
Phase II of the proposed project would be eligible for incentives totaling up to $395,028, consisting of up to $100,000 in Rebuild Rhode Island Tax Credits plus a rebate of sales taxes on building materials related to Phase II of the project in an amount not to exceed $395,028. Sales taxes rebated in excess of $295,028 would reduce tax credits on a dollar for dollar basis.
Based on a third-party analysis, over the twelve-year period, Rhode Island is projected to realize a net increase of approximately $4.2 million in personal, sales, and business corporation tax revenues directly and indirectly generated by the project during construction and the twelve-year commitment period. The analysis also projects an increase of $15.3 million in Rhode Island’s annual GDP after the completion of Phase II attributed to Finlay’s full project and operations over the period.