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Advanced furnace manufacturer to move from California to Buffalo

by Jonathan Epstein
Wed, Jan 29th 2020 08:00 am
The Buffalo News  [ View Original Article ]

Coming soon to the Northland campus: The return of the furnaces.

But these will be advanced versions, clean and high-tech, and they're viewed as part of Buffalo's future, not its past.

A Northern California company that makes specialized furnaces to melt titanium and titanium alloy is relocating virtually its entire operation – including its corporate headquarters – to Buffalo's East Side. It will bring three dozen jobs now with plans to grow to 80, including researchers, engineers, machine operators, finance and administrative personnel.

The company, Retech Systems, will occupy 48,934 square feet on the first and fourth floors of the main building at the Northland campus, at 683 Northland Ave., under a lease with an affiliate of the Buffalo Urban Development Corp. The agency's board approved the 10.5-year lease on Tuesday.

"This is a very big deal for BUDC and for Buffalo, and for the East Side. We have a business that’s actually relocating from California to Buffalo," said Buffalo Mayor Byron W. Brown, who chairs the BUDC board. "This is further affirmation that Buffalo is a great place to invest."

In exchange for the jobs, Retech will qualify for up to $500,000 in Excelsior Jobs tax credits from Empire State Development Corp.

Retech will use two areas of the ground floor in the 1981 portion of the building, totaling 40,397 square feet, for research and development, and for its manufacturing operations. That includes an open-span area with a 200-ton crane. It will also take up 8,537 square feet of office space upstairs in the 1911 building, where President Earl Good and his executive team will be located.

"We’re excited to be here," Good said. "We think Buffalo is a good area for us to expand. We look forward to growing that business and adding parts as we move forward."

The lease also means that the Northland Central building is now more than 93% leased, including the Northland Workforce Training Center, Buffalo Manufacturing Works and other tenants. Only a small amount of space – including the small third floor – remains vacant, and BUDC officials are working to market it to other potential tenants.

"This is certainly the kind of company that we were hoping for, that we expected," Brown said. "Retech's investment certainly will encourage other companies across the country to take a harder look at what’s going on here in Buffalo."

Founded in 1963 and based in Ukiah, Calif., Retech says it's the world's leading provider of vacuum and cold-hearth melting furnaces used primarily in the aerospace, defense and medical industries. The furnaces – which vary in size and dimensions – use electron beam, plasma and cold wall induction technology, unlike old steel mills.

Clients use Retech's technology and systems to melt, refine and cast titanium, nickel, alloys, "super alloys" and rare earth metals to manufacture parts that are in turn used by other companies, such as Boeing and Airbus. The company is also getting into metal powders that are used in 3D printing.

In 2011, the advanced manufacturing firm was acquired by Poland's SECO/Warwick Group, a global manufacturer of heat treatment, thermal processing, heat exchange and vacuum metallurgy technologies. The conglomerate operates 10 companies on three continents, with customers in almost 70 countries and production facilities in Poland, the United States, India and China, plus sales and service offices in other countries.

In November 2018, Retech announced that it would move much of its manufacturing and assembly work that was done in California to facilities in Swiebodzin, Poland.

The new operation in Buffalo will supplant that, while a sales and service office will remain in California. Retech has had a sales and service office at 6309 Main St. in Williamsville for the past two years, with 12 employees.

"Our company has many customers on the East Coast, and being in the Western New York area gives us the ability to provide excellent regional support to those customers,” said Good, also managing director of the company. "This location also gives us the ability to build our staff with additional quality employees from the engineering and technology schools in the area.”

Good and Retech were already familiar with Western New York prior to the lease. Retech already has customers in central and eastern New York, as well as at least one smaller client in Western New York, and it also has customers in Pennsylvania and Ohio, as well as "through the Rust Belt corridor," Good said. That makes Buffalo a central location – as well as being closer to Poland.

Additionally, Good is a Penn State graduate who lived for 28 years in Hershey, Pa., and his two daughters attended and played soccer for Canisius College, so he and his wife came to Buffalo many times, and saw the reinvestment in the city first-hand. That led to the opening of the sales office, and eventually the relocation. Good and his wife bought a house in East Amherst in November.

"There were certain things that stood out about Buffalo," Good said. "We saw all the development taking place in Buffalo and from different people we’ve talked to over the years, we understood Buffalo was growing and investing quite a bit in the entire community. We were interested in someplace that was putting an investment in and trying to bring in outside companies. This just happened to be a good fit. We looked at a number of different locations, and we found everything we were looking for in this area."

Terms of the lease call for a base rent of $282,000 in the first three years, rising to $335,872 by the 10th year. There are two five-year options to renew, extending the lease another 10 years, with the rent escalating to $400,020 by the end.

BUDC agreed to allocate another $537,524 for landlord improvements to the space, including a new concrete floor, electrical upgrades and restrooms on the first floor, and a conference room, electrical upgrades, bathrooms, flooring and an HVAC system for the office area. "Retech will be a heavy electrical user, so we want to provide them a space that will meet their needs," said BUDC Executive Vice President David Stebbins.

BUDC President Peter Cammarata said the agency expects to turn over the space to Retech by April 1, at which point Retech will invest funds for its own build-out. The company expects to be operational by early summer, Cammarata said.

"We will continue to invest in our business and company as we see fit as we move forward," Good said. "We’re coming here with the idea of growing and expanding our presence and looking at other options."

Brown and other city officials noted that the lease is a vote of confidence in the redevelopment of Northland into a major training and advanced manufacturing hub that is not only gaining attention locally and across the state but also nationally. More than $120 million in government funds have been invested into the transformation, with about 96 percent coming from the state. "It's as unique as anything I've seen Buffalo do," said BUDC board member Dennis Penman.

It also follows on the heels of the opening of the new Albright-Knox-Gundlach satellite art facility at 612 Northland, which drew more than 1,200 visitors in its first week.

"We continue to build out Northland," Brown said. "This investment and lease is very good for what we’re doing on the east side of Buffalo, but certainly also for what we’re doing throughout the city of Buffalo."