AUBURN - An upstart cheese company will build a factory in Cayuga County, local, state and company officials announced Thursday.

Representatives from the Saratoga Cheese Corporation said during a press conference that they are committed to building a 64,000 square-foot production facility at the business park in Aurelius off of Routes 5 and 20.

Along with company executives, a number of elected officials discussed state funding and financial incentives that will go toward the factory.

State Sen. Michael Nozzolio announced he has secured a $400,000 state grant that will go toward site design and development. And the city of Auburn and Cayuga County are finalizing an agreement that should extend state development benefits to the business park, according to officials.

While discussions have taken place for more than a year about the possible project, this is the first commitment that has been made in public. According to the company's proposal, the factory should create 77 direct and 180 indirect jobs and generate $3.6 million in dairy producer revenues per year.

At the factory, specialty cheeses will be made such as feta, fresh mozzarella, muenster, havarti and other varieties using kosher Cholov Yisroel milk from local farmers.

William Teator, a representative of Saratoga Cheese and Capital Advocates - a communications firm representing the company - said in a perfect world, the factory will be operational by this time in 2010.

During the press conference, Teator said Saratoga Cheese has been impressed with the how the city and county have worked together.

“The cooperation has been incredible,” he said. “That's one of the reasons why we're moving here.”

That cooperation is still taking place as city and county officials work out an agreement to extend Auburn's Empire Zone to include the Aurelius business park. If the city agrees to extend the zone, the factory will be eligible for millions of dollars in tax breaks and exemptions, refunds and capital credits from the state.

City and county officials have reported that water and sewer rates have been a major focus of discussion, as Auburn would provide those services. Nozzolio, who has been involved in the process since the beginning of this year, said aspects of an agreement need to be finalized. Both parties are committed to working the details out, he said.

An area state Senate candidate wasn't quite as optimistic when hearing the news, however. And Paloma Capanna, a Democrat challenging Nozzolio for the 54th Senate District seat, also said Thursday that it is unlikely a coincidence that this announcement was made so close to Election Day.

“I can't help but question whether this announcement is premature or designed because the election is in the next two weeks,” Capanna said.

While she said she hopes the taxpayer money going into this project will result in the predicted amount of jobs, she also said the Empire Zone projects don't always work out that way. A 2007 study showed fewer than half of the companies receiving the benefits had achieved the results promised on their applications, Capanna said.

Because of this, she said she is “a little bit nervous” about the idea of giving $400,000 and promising tax breaks to a new corporation with no track record.

“We need to think more about public money with a watchdog attitude,” Capanna said. “There are questions I think we should be discussing as citizens and taxpayers.”

But the Empire Zone benefits are a crucial part of bringing the factory to the county, Nozzolio said. The county's only zone exists entirely within Auburn.

“(The Empire Zone) is a critically important job development tool, and all too often, the region hasn't been able to take advantage of it,” he said.

New York state is not the only possible source of public money for the factory. U.S. Rep. Michael Arcuri's office stated in August that the congressman was seeking $1.7 million from two federal bills, which would include $200,000 for developing the business park.

A representative from Arcuri's office said Thursday that the funding was not finalized this year, but Arcuri will continue to work on acquiring it when Congress reconvenes in January.

Bringing businesses such as Saratoga Cheese factory to the area is important to help the local and regional economies grow, Auburn Mayor Michael Quill said. All levels of government have to work together to make things happen in Cayuga County, he said.

“Together we can accomplish some great things,” Quill said. “Cayuga County is on the way back, so stand back and watch us.”

Staff writer Christopher Caskey can be reached at 253-5311 ext. 282 or christopher.caskey@lee.net.