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City attracts firms -- for a change In a switch from the usual job drain, some suburban companies are moving into Buffalo for the tax breaks

It used to be people and businesses fled Buffalo for the suburbs.

Today, suburban companies -- and several-hundred jobs -- are moving into the city.

The Empire Zone and tax incentives it offers have lured five firms from Cheektowaga, three from Amherst and one from Clarence since 2002. Cheektowaga and Clarence will hold public hearings this month on three firms that want to shift to the city.

If an official tally were kept, the suburbs still would have a huge net gain in jobs and businesses lured from Buffalo.

Nonetheless, the city shift is irritating some suburban leaders.

"It's difficult for towns to compete with that Empire Zone. We cannot," Clarence Supervisor Kathleen Hallock said.

Clarence is losing the headquarters of Cobey Inc., which manufactures compressor assemblies, and its 52 jobs.

The company wants to expand and add 45 jobs.

Robinson Home Products moved its plant from Walden Avenue in Cheektowaga to a Buffalo location with more space.

The WorldWebDex publishing family moved from Amherst to Buffalo because it wanted to have its work space reflect its corporate personality, said Managing Director Kelly Fermoyle.

Every potential space the company looked at was in the Empire Zone, she said.

The incentives have been a boon to the publishing company, which has added four employees since moving to Main Street.

"We were an emerging company. It married nicely," she said. "We found most of our employees moved downtown and were doing a reverse commute."

It's the incentives that companies receive when they locate to the zones that make moving from one municipality to another a good business decision, company officials say.

There are property tax abatements and refunds, sales tax refunds and exemptions, investment tax credits and wage tax credits.

"Something really needs to be done to level the playing field," said Cheektowaga Supervisor Dennis H. Gabryszak.

"One company told us, 'Even if we got free rent we couldn't afford to stay,' " Gabryszak said.

>City couldn't compete

Buffalo officials say Empire Zones are leveling the playing field for Buffalo, which for years has been complaining it couldn't compete with suburban greenfields offering large, modern office buildings with lots of parking, often with tax breaks from industrial development agencies. The city, in fact, successfully sued the Amherst IDA in the past for illegally "pirating" businesses from Buffalo with its tax abatements.

Empire Zones were established by the state in 2000 to attract and retain businesses in struggling areas. A successor to enterprise zones set up in 1986, the Empire Zones were established by New York State to stimulate private business development and job creation.

There are 72 zones statewide, including two in Buffalo and one each in the Town of Tonawanda, Lackawanna, Niagara Falls, Jamestown, Dunkirk and Olean.

While the number of firms moving within Erie County is small, Gabryszak and Hallock are hoping it is not the start of a trend of companies shifting from one community to another.

"At no point do we want to be competing with them for companies that stay here," Timothy E. Wanamaker, Buffalo's strategic planning executive director, said of the suburbs.

State officials said the Empire Zones were not designed to move jobs around within an area but to retain jobs and attract new ones to the area.

"This is not anybody's intention in terms of what the Empire Zone should be doing. They should be bringing in jobs from outside the area and not just moving the chairs around on the deck," said Assembly Majority Leader Paul A. Tokasz, D-Cheektowaga.

"You can't fault the company because it's a good business decision," said Paul Leone, the economic development consultant for Cheektowaga and for several area industrial development agencies.

Robert B. Skerker, president of Robinson Home Products, said he would have kept his kitchen utensil supply business in Cheektowaga, but he needs more room than the 100,000 square feet in its building on Walden. He said he has looked at space in Buffalo, Georgia and Virginia. He decided on the old Buffalo China building, which offers the Empire Zone incentives.

"Otherwise I would move farther south," said Skerker, the third generation of his family to run the company.

Under the legislation setting up the Empire Zones, municipalities in New York State that face the loss of a company to an Empire Zone must hold a public hearing and vote on the move.

"If Cheektowaga prevents us from leaving, we would reactivate discussions with the State of Georgia," Skerker added.

Something like that happened to Network Task Group, a small technology firm that moved from Cheektowaga to the Seneca Industrial Center in 2002. Company partner Duncan Smith said that despite repeated requests, Cheektowaga did not supply him the necessary paperwork approving the move.

"We spent two years down in an Empire Zone not being able to take advantage of an Empire Zone," he said. "Unfortunately, it would have been a lot of money I would have used to put back into the community."

He moved his company, which had added eight positions in that time, from Buffalo to West Seneca two years ago. Gabryszak said he couldn't remember the company.

"I don't know what happened. We had the public hearing and nothing happened after that," the supervisor said.

John Krytus III said he wasn't looking for the Empire Zone to move Construction Personnel Group, his employment agency. He's buying a building on Niagara Street.

"It's perfect for us. It's close to my other business. It makes sense for me," he said. "The Empire Zone benefits, it doesn't hurt, but that's not why we're moving."

>Towns can't compete

After Buffalo suffered the loss of firms to the suburbs for many years, some may see the return to the city as poetic justice.

But several of the towns left behind say even industrial development agency incentives aren't enough to compete.

"I have an arsenal through the IDA," Leone said. "I don't have as many guns as the Empire Zone."

Cheektowaga and other towns could get an Empire Zone if other zones allocated their unused acres, such as Tonawanda did for Amherst to land GEICO Direct. And under new legislation, if a regionally significant project creating more than 50 jobs wanted to move to a town without a zone, the state could designate a zone. The state also could designate all of Erie County as an Empire Zone.

Tokasz said the state continues to look at the issues surrounding Empire Zones, including the possibility companies that would not move out of state are shifting to the zones.

"As much as this appears to be occurring in Erie County, we haven't heard of it in other counties," he said.

"We could say no, but that's not what's good for Western New York," Clarence's Hallock said. "We don't want to create an unfriendly business atmosphere in Western New York."


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