An Enterprise Zone with a view (and other benefits)

Relocating to an Enterprise Zone does not necessarily conjure up an image of a mountain-range view from the plant windows. But for Tessy Plastics Corp., Elbridge, NY, the Blue Ridge Mountains in the distance were a part of the deal when it expanded its operations to Lynchburg, VA.

Tessy Plastics is a family-owned business begun in 1973 by Henry Beck, president, who at the time was in machine tool sales. Beck had sons who were interested in the plastics side of the business the senior Beck had just founded with two partners, so Beck bought out his partners and sent sons Roland and Ken off to study plastics at the college level. Ken Beck subsequently took a two-year apprenticeship in Germany with a company near Munich, and today all three of Henry Beck's sons are active in running Tessy's operations.

A high-volume, precision custom molder, Tessy Plastics specializes in small to medium parts. At founding, the Elbridge facility was 6000 sq ft; today it covers 95,000 sq ft and houses 50 machines ranging from 40 to 400 tons. The company's first main customer was medical product manufacturer Welch Allyn, a relationship that continues today. Over the years, clients have been added in the automotive industry, with remote keyless entry systems; business machines, with parts for copiers; appliances; and telecommunications.

"A target market now is telecommunications, and one of our largest customers is Ericsson, near Lynchburg, which makes cell phones," says Ken Beck, vice president and general manager of Tessy's new Lynchburg facility. "Ericsson thought it would be a very good idea to have a molder in the area; plus, approximately 15 percent of our moldings already go to the south, so it made sense to expand there." Beck, who led Tessy's expansion project, contacted the Economic Development Agency of Virginia, which put him in touch with Lee Cobb, director of economic development for the city of Lynchburg, and marketing director of Region 2000, a consortium of seven municipalities formed to market that region of the state.

Although Beck looked at other locations, primarily in North Carolina, he settled on Lynchburg as the locale that offered the most advantages. The site Tessy chose is located in a new industrial park in a state-designated Enterprise Zone. "Enterprise Zones qualify as such based on the number of low- and moderate-income people who live in the immediate area," says Cobb. "And this is not an inner-city location; it's an old, old residential community that just happened to have been overlooked by urban and suburban development as it went by."

At the state level, the designation provides tax credits and employment grants; at the local level, there is extension of water, sewer, and streets to the site at no cost to the occupant. There is also a rebate on the plant's machinery and tool tax - 100 percent for three years, then 50 percent for two years.

Tessy is the second company to locate in the Enterprise Zone's new industrial park; Frito Lay has just completed a $150 million plant there. At opening on August 1, 1997, there were 14 machines in operation in the 43,000-sq-ft, $4.5 million Tessy plant, with capacity for 32; and 80 employees, with 200 forecast for the end of 1998.

"It's unbelievable how nice the location is," says Beck. "We have a beautiful view of the Blue Ridge Mountains; that's part of what turned us toward this industrial park. Plus, Lynchburg was just rated by Reader's Digest as number 47 in the country for best places to raise a family."

A major incentive was offered on utilities. Lynchburg is in the American Electric Power system, according to Cobb. "Its electricity is in the low-cost 5 percent in the country." He also comments that "plastics is one of our target industries," and says that the area has a good basis for a plastics industry, thanks to the presence of several other molders and suppliers of machinery to the plastics industry.

The state agreed to conduct all pre-employment testing for Tessy, administering tests to determine reading and writing skills, as well as skills such as mechanical aptitude. Tessy relocated 15 employees, and is hiring 65 new workers. "There's definitely a good labor force available," says Beck.

Anything he'd do differently? "Probably I'd start a little sooner." He foresees substantial cost savings thanks to less taxes, lower utility rates, a decreased cost of living, and "having to pay less worker's comp than we pay in New York. Our people are very excited about our move - we're all looking forward to it."