Canajoharie prepares to sue over loss of Beech-Nut

By KERRY McAVOY, The Leader-Herald

CANAJOHARIE - The Village Board has decided to pursue a possible lawsuit over the departure of the local Beech-Nut factory.

Mayor Leigh Fuller said village officials voted last week to pursue an Article 78 action - a legal challenge to action, or inaction, by agencies and officers of state and local government.

The major concern is how the village will pay its $2.8 million debt for its water system without the tax revenue from the baby food-processing plant that has long been the main engine of the village economy.

Fuller said once Beech-Nut consolidates its operations in the town of Florida, Canajoharie property owners will face a tax-rate increase of $7 to $8 per $1,000 of assessed property value. He said the village already has one of the highest property tax rates in the region - $18 per $1,000 of assessed value.

He said many taxpayers in the village are retired and live on fixed incomes. He said they can't afford to pay high taxes to cover the water bond debt.

"All we're trying to do is to protect the taxpayers of this very small village, who will be devastated by this," Fuller said.

Fuller said Beech-Nut now pays about $1.7 million in village taxes per year.

Village officials are concerned that no buyer or tenant for the factory has been secured yet.

"We have $1.7 million going out the door, and nothing coming in the door," Fuller said.

Village Trustee Jeffrey Baker said the community also will lose $180,000 per year in school district property taxes.

"We feel [legal action] is the only way we can recoup anticipated losses," Baker said.

The village has not yet decided who would be named as defendants in the lawsuit. Fuller said the village attorney is working on the Article 78 filing and deciding who would be named in the lawsuit.

Baker said the Village Board has several weeks to gather data before filing the action.

"A lot of people are upset about this," Baker said.

Village officials said they had received no written commitment of aid from state or federal agencies until late last week, when state Sen. Hugh T. Farley, R-Niskayuna, announced the village will receive $500,000 in state funding to help diversify the local economy after Beech-Nut's move.

"This is a step in the right direction," Village Trustee Tom Grainer said Friday of the grant announcement. He was the only board member who did not vote on the resolution earlier in the week; he was absent from the meeting due to illness.

Fuller said by pursuing legal action, officials are doing the right thing for the village.

"All I'm doing is putting out our plight," Fuller said. "It may be the wrong decision and it may be the right one. There is certainly no way of knowing down the road which one it will turn out to be."

Baker said although the matter isn't on the board's agenda for its meeting Tuesday, he expects it will come up in discussion.

The board will meet Tuesday at 7 p.m. in the village offices.

General Assignment reporter Richard Nilsen contributed to this story.