By Roger Gavan

— Plans to build a factory at Warwick Corporate Park have been canceled.

Last December New York State awarded $20.2 million in grants to businesses and governments for economic development projects in Orange, Ulster and Sullivan counties.

And one of the beneficiaries of two awards for manufacturing expansion totaling $2.6 million was Star Kay White, Inc., a privately owned firm in Congers, which manufactures syrups and flavorings for ice cream.

The 126-year old company had planned to build a new manufacturing facility in the Warwick Valley Office and Technology Park in what was formerly part of the Mid-Orange Correctional Facility.

And it was under contract to purchase five of the nine lots off John Hicks Drive, that were still available in the Office and Technology Park, owned by the Warwick Valley Land Development Corporation.

On Friday, Jan. 27, Ben Katzenstein, a Warwick resident and president of Star Kay White, announced that he had decided to cancel those plans. The disposition of the original $2.6 million grant to the company will be decided by the state.

Town of Warwick Supervisor Michael Sweeton reported that several weeks ago Katzenstein called him to say he would not be moving forward.

Design team recommends plan twice firm's budget He had met with the design team from the national engineering firm he hired and their estimate to build what he felt he needed was $40 million.

Katzenstein's budget was $20 million and as much as he wanted to come to Warwick, he felt he would put his company at risk at that cost.

"He loved the site," said Sweeton, "and said our efforts on his behalf were outstanding but the risk was too high. Our team offered to explore options but Mr. Katzenstein felt confident in his decision.

"While disappointed," Sweeton added, "I certainly, as a small business owner myself, understood his need to make the best decision for his company."

'This is a journey'Sweeton explained that the property remains the only true shovel ready site with municipal water and sewer as well as being serviced with natural gas and fiber optic cable.

The lots, he added, are aggressively priced and are being marketed by Rand Commercial, which has already brought two new prospective companies to view the property.

And one has already submitted an offer, which is under consideration.

"This journey," said Sweeton, "has taught the town and its Land Development Corporation the ups and downs of the competitive commercial real estate business. However, we remain confident that the uniqueness of this site nestled within 700 acres of the pristine Warwick Valley will attract quality businesses in the near future."