The Fox Run at Orchard Park life care community was granted tax and financing incentives Monday from the Erie County Industrial Development Agency, but not without an extended debate over whether senior housing for mid-to-upper income residents should be entitled to taxpayer subsidies.
While the IDA previously had approved tax and financing breaks for the Canterbury Woods life care community in Amherst, both in 1998 and again this June, some board members questioned whether the agency should aid this type of project.
"Pretty much, we're subsidizing, or helping, a housing development," said Cheektowaga Supervisor Dennis Gabryszak. "Maybe this is becoming the ECIDA/Erie County Housing Authority."
Gabryszak said he was leery of aiding a complex with 180 independent living apartments and another 101 units for residents requiring some assistance or skilled nursing care aimed at mid-to-upper income senior citizens.
"These are people of financial means," said Gabryszak, who also raised objections in June when the IDA approved property and mortgage tax breaks worth nearly $1.28 million for a 40-unit expansion of the Canterbury Woods retirement community in Amherst. "It gives a financial advantage to people who are able to bear the full load."
But Charles Webb, the IDA's executive director said aiding life care communities is a way to help keep New York's senior citizens in the area, rather than seeing them move to states such as Florida, which has no state income tax. "Why would we kick out that group from New York state?" Webb said. "They'll stay here and spend. Sure they'll go to Florida for two months, but they'll come back."
The incentives approved by the agency will save Fox Run $705,000 in mortgage taxes and make it eligible for tax-exempt financing that typically reduces its interest rate by two percentage points. Richard Dopkins, a Fox Run attorney, said the interest savings would be far less than that because of state taxes that would add to the project's financing costs.
Webb noted that aid for life care communities has been authorized by state lawmakers and that there are fewer than 10 comparable facilities in New York. He also said the project, which Fox Run officials said would cost about $80 million, would provide a big boost to Erie County's construction industry and would create an estimated 118 full-time jobs.
"Growth has to be encouraged," Webb said. "The battle is to retain what we have."
Board member Frank Mesiah said he didn't see how the IDA could reject Fox Run after approving similar incentives for Canterbury Woods. "They have a legal right to do it and we're not structured here with our policy to deny it," he said.
Board member Andrew J. Rudnick said he was "a little troubled" by the Fox Run project since he had wanted the IDA's policy committee to review the life care community issue and make a recommendation to the board on how those projects should be handled before any new projects were considered by the agency.
The board, after a 10-minute executive session to discuss what Webb described as "quorum requirements and the action we'd like to take today," approved the Fox Run incentives without any further discussion and agreed not to consider any new life care community projects until the policy committee conducts a review and makes its recommendation.
Fox Run already has negotiated agreements with the Orchard Park School District, the Town of Orchard Park and Erie County that will result in it paying $17.9 million to those entities over the next 30 years. The residential units, which are expected to sell for about $150,000, will be fully assessed, although the agreement caps the subsequent annual increases in assessment at 3 percent.