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NEW POLICY ON IDA AID HAS HOLES

There's a new policy for determining what kinds of projects qualify for tax breaks from Erie County's industrial development agencies -- but don't think it's ironclad.

The new policy, approved by the Erie County IDA but tabled by the Amherst IDA last week, narrows the eligibility requirements for the lucrative aid available through IDAs by more precisely identifying the types of businesses that qualify.

Says Andrew J. Rudnick, the Buffalo Niagara Partnership president who headed the panel that developed the new criteria: "They make it a little tougher for everyone to think they can get a sales or property tax break."

That's a step in the right direction, be-
cause every tax break an IDA hands out only increases the tax burden on everyone else. And a more detailed policy should lead to more consistency in how the county's six IDAs dole out those tax lucrative breaks.

Yet there's still plenty of wiggle room in the new policy. Think of the policy as a slice of Swiss cheese. Its still has holes, but they're a little smaller.

So golf courses generally don't qualify for aid -- except when they'd be so elaborate and fancy that they'd draw golfers from far and wide, not just from Erie County.

Hotels don't make the cut either, unless they're linked to a new convention center, conference center or a "major destination attraction" within the county. While Rudnick says that excludes places like the University at Buffalo, major league sports arenas or the Buffalo Niagara International Airport, there's still plenty of flexibility there.

Retail projects are out, except when they're in a neighborhood that's been designated by the state as a distressed area or are linked with a "destination" project, like Bass Pro. And there's still a loophole that allows aid for retail projects that enhance the area's quality of life -- provided that "a significant portion" of its customers come from outside the county. That's what could open the door for golf courses.

Medical facilities are out of luck too, unless they can show they offer back-office services to a regional clientele, use "cutting edge technology" or offer services that otherwise aren't available. That won't stop the controversy that erupted Friday over whether Buffalo Ultrasound deserves more than $70,000 in sales tax breaks from the Amherst IDA for new imaging equipment that it says will let it offer a unique service. A competitor says it's just a standard technology upgrade.

"Every time we have a medical project, it's controversial and political," says James J. Allen, the executive director of the Amherst IDA, which was deadlocked over the Ultrasound project and is expected to approve the new policy in May.

And the door is wide open for projects, including retail and medical facilities, in specially designated "neighborhood redevelopment areas" that are grappling with declining property values, high vacancy rates, blight and a lack of investment.

"It gets to be subjective," says Cheektowaga Supervisor Dennis H. Gabryszak, the lone ECIDA board member to vote against the new policy.

Even Rudnick admits the new policy, which also has been approved by the Hamburg IDA, won't end the controversy over who gets IDA incentives. But he thinks it will tone it down.

"We essentially have said to all of the IDAs that here are a list of sectors that are, without question, eligible and a list that require you to bore down deeper," he says.

County Executive Joel Giambra, a critic of IDA policies that have granted incentives to golf courses in Akron, stores in Amherst and businesses moving from one town to the next, backed the new policy because it clarifies a "complicated, chaotic and confusing process."

But he doesn't think it goes far enough. Giambra still thinks the ultimate solution is to create a single IDA for the entire county. "I think we're moving in the right direction," he says.

e-mail: drobinson@buffnews.com