Madelaine puts Far Rock plant on the market

Madelaine puts Far Rock plant on the market
Photo by Steve Mosco
By Sarina Trangle

The Madelaine Chocolate Co. served up a bitter batch when it placed its 5.4-acre Rockaway Beach complex on the market this year.

Despite receiving some $20 million in assistance from government agencies while recovering from Superstorm Sandy, Madelaine CEO and co-owner Jorge Farber said the chocolatier had not recovered.

Farber said the company, once Rockaway’s largest employer, had only managed to rehabilitate about half of the plant since Sandy struck in October 2012. He said it was not economical for the chocolatier to own the entire property and therefore it was considering selling its four buildings, relocating anywhere or holding onto a portion of the plant.

“I live just 3 miles from here, so this has always been our neighborhood and it’s a painful decision to make,” Farber said. “The business is viable, but it’s not sufficient to support the facility.”

The candy company has enlisted the real estate firm CBRE in marketing its four lots, between Beach 98th Street, Cross Bay Parkway, Beach Channel Drive and the Rockaway Freeway. A brochure published by CBRE notes that the four buildings collectively offer 201,474 square feet that could be transformed into multi-family residences, retail space or a mixed-use development.

Sandy inundated manufacturer with 3 1/2-foot waves in October 2012. Madelaine temporarily shut down and estimated the storm left it with $50 million in damages, Farber said.

In October, the company partially reopened, running one of its 14 mold lines and gradually hiring back about 175 of its 450 employees, Farber said.

Several government agencies and a $250,000 check from National Grid contributed to the company’s comeback.

Empire State Development granted Madelaine $6.9 million in tax credits for working to keep jobs in the state, Cuomo announced last fall.

The New York City Industrial Development Agency gave the chocolatier a three-month reprieve in January 2013 on a $155,000 payment it owed the agency in lieu of taxes for the construction of its factory.

The IDA accepted Madelaine into its Industrial Incentive Program to prevent the growing company from leaving the city in 1997. Under the IDA initiative, Madelaine entered a long-term arrangement with the agency, where the chocolatier leased its property to the IDA, which in turn leased it back to the candy company so Madelaine could reap exemptions from sales, mortgage recording and property taxes.

As of Jan. 31, 2013 the IDA had offered Madelaine $442,000 in benefits under an agreement slated to end July 2027, according to the IDA’s most recent annual investment projects report.

But nothing in the deal obligates Madelaine to stay at the foot of the Cross Bay Bridge.

The U.S. Small Business Administration also stepped in last June, offering Madelaine a $12,901,700 loan. Part of the funding was expected to help pay the candy company’s mortgage with Gerber Finance Inc., according to property records.

Similarly, the loan does not bind the chocolate company to Rockaway, but if Madelaine sold its property, SBA spokeswoman Carol Chastang said proceeds from the transaction would have to go toward paying off the loan because it was secured with a lien on the buildings.

State Assemblyman Phillip Goldfeder (D-Rockaway Park) said the $20 million should compel Madelaine to remain in Rockaway, and that if the company relocated, it would not be for lack of assistance.

“It should have been enough to keep them in the neighborhood or looking in the neighborhood,” he said. “It would be a tragic loss if they left.”

Reach reporter Sarina Trangle at 718-260-4546 or by e-mail at strangle@cnglocal.com.

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