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State criticizes Clarence IDA over grant to Chamber; $10,000 for relocation of office went beyond power, Budget Office report says

The Clarence Industrial Development Agency has been criticized in a state report for approving a $10,000 grant to help the Clarence Chamber of Commerce relocate its offices.

The state Authorities Budget Office report cites instances around the state where IDAs made handouts to private entities that are not consistent with the powers given to the agencies under general municipal law.

The Clarence Chamber is preparing to relocate to much larger space just down Main Street from its current home.

The Authorities Budget Office said IDAs have the ability to provide limited financial assistance to advance a "legitimate IDA purpose," but it contends grants often were not made "to generate new economic growth in the community through increased payrolls, higher property values, or enhanced economic activity."

"Rather, these grants appear to be awarded, in part, for charitable purposes, to provide revenue to the recipient, or to promote the image of the IDA within the community," the report said.

David Hartzell, chairman of the Clarence IDA, defended the way the agency awards grants. He said each year the board sets aside less than 3 percent of its profits to "donate to the betterment of the business community."

The only requirement, he said, is the funds must be used to help local businesses "grow and prosper." The IDA invites applicants to submit requests by year's end and then awards grants the following April.

Hartzell said he feels the donation to the Chamber falls within the Clarence IDA's mission. "The Chamber is a key driver in the growth and development of the small businesses community in the Town of Clarence, a role that the Clarence IDA cannot fill."

Hartzell, a former Chamber president, noted the organization is involved in a variety of seminars and activities to support local businesses. And the new office space will be large enough to allow the Chamber's board of directors to regularly meet without going off site.

The Authorities Budget Office is an independent office whose mission is to "make public authorities more accountable and transparent, and to act in the public interest consistent with their intended purpose."

Its report on IDAs cited grants by eight IDAs that the office considered questionable. The Clarence IDA was the only one of the eight agencies located in the Buffalo Niagara region.