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Tax breaks touch all of our wallets

Next time you pay your taxes, take solace in the fact that you're paying a little extra so the fine folks in Amherst can shop at a couple of spruced-up Tops Friendly Markets.

Or that you did your part to help Chef's Restaurant go ahead with a nearly $2 million expansion and upgrade of the popular Italian eatery in Buffalo.

Or that you're chipping in a little so the good people who live around Transit Road in Lancaster won't have to go quite as far when they twist their ankle or need stitches from the new Medfirst Urgent Care center. And I'm sure you won't be bothered in the least to know that your taxes are a tad higher so Northtown Lexus could move the luxury car dealership a few hundred yards down Sheridan Drive in Amherst to an empty Chrysler dealership that will be snazzed-up and expanded.

With the recession drying up the factory and office expansions that traditionally have been the bread-and-butter of IDAs, more of the agencies' attention is being directed toward medical, retail and housing projects that, at best, are on the fringe of the agencies' mission.

And remember, every time a business gets a tax break, deserved or not, it means you and I and every other taxpayer have to pay a little more than our fair share to make up the difference.

In many cases, including the Tops renovations and the Lexus dealership's move, the projects qualify for IDA aid because they are within areas that have been targeted for redevelopment. The thinking is that it's better to offer aid to revitalize decaying or abandoned buildings than to do nothing and see them turn into more of a blight.

"They're not going to be redeveloped, as is," says James Allen, the executive director of the Amherst Industrial Development Agency, which has been very aggressive in its pursuit of redevelopment projects. "They're going to have to be built out or torn down."

There are a couple of other factors at play that are making these fringe projects more attractive to IDAs. For starters, the failure of the State Legislature to renew a key portion of the main law covering IDAs has eliminated the requirement that the agency's determine that many of these projects wouldn't happen without tax breaks. It also scrapped the mandate that the tax breaks be approved by a community's mayor or supervisor.

"When we had to do it, it was more difficult to prove it was essential," Allen says. "Now, our but-for [test] is, but-for them redeveloping it, we'd have a vacancy on Main Street."

Amherst IDA board member Aaron Stanley, while discussing the $157,500 in sales tax breaks the agency unanimously approved for the Tops renovations on Friday, expressed concern about the blanket approach that projects deserve tax breaks just for being in a redevelopment district.

"I don't know if every single parcel within these zones is in need of assistance from the IDA," he says.

These fringe projects also have become an important part of the IDAs' weakened revenue stream. The Amherst IDA, for instance, is nearly $80,000 in the red through the first five months of the year, though the agency will be profitable again next month, after booking a big fee from backing a University at Buffalo bond sale for a student housing project. The Erie County IDA is running a loss of almost $420,000.

And that won't get better by saying no.


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