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Yahoo to receive more than $30 million in tax breaks

LOCKPORT – With the approval of a 20-year package of property tax and sales tax breaks for Yahoo’s second Lockport project, the Internet giant has the green light to invest another $170 million in the town’s industrial park.

That would be on top of the $150 million it plowed into its first phase.

But there might be more to come, a member of the Town of Lockport Industrial Development Agency said as he joined Thursday’s unanimous vote for the $30.5 million tax abatement package for Yahoo’s expanded data center and the new call center, which will bring another 115 jobs to join the existing 77.

“I have the feeling that an expansion far beyond this is the key to making this a viable project,” Duncan N. Carlson said. “They are interested in more land, a major expansion of the data center. … Betting on the future, that’s why I would be inclined to support this project, not what we heard here today.”

“We have nothing new to announce,” a Yahoo spokeswoman said by email to The Buffalo News.

The vote came after an hourlong public hearing in which taxpayers criticized the benefits for Yahoo, while representatives of schools and local not-for-profit groups joined town elected officials in praising the project and the company.

For example, Unyts sent a letter thanking Yahoo for hosting its blood drives.

“We would suggest blood is being drawn from the taxpayers,” quipped Andrea L. Sammarco, attorney for Lockport construction and real estate executive Glen C. Miller.

“The tax abatements for this are horrendous,” said Edwina Luksch of Newfane. “I want to see something for what Niagara County is being put through.”

Margie Swan, of Cambria, said: “A multibillion-dollar corporation doesn’t deserve all these tax breaks.”

Mark W. Albiez, executive director of the Lockport Family YMCA, said Yahoo workers have volunteered with his organization. He said, “I think they see what they can do to make the community better.”

“Except pay taxes,” Swan commented.

Todd Fragale, president of the An-Jo Baseball League, said Yahoo paid $1,000 for a new infield drag and $1,200 for new dugouts and benches. He said, “Yahoo has been an excellent corporate citizen and sponsor. They’ve gotten involved in the community while other long-term companies have stood on the sidelines.”

“The ultimate in being a good corporate citizen: paying your taxes like everyone else does,” said Donald G. Hobel of Wheatfield.

Bonnie Stafford, principal of Fricano Elementary School in the Starpoint district, said Yahoo bought materials for classroom projects for two of her teachers. Newfane School Superintendent Christine Tibbetts sent a letter praising Yahoo for helping fund Advanced Placement courses.

“If we [small businesses] got a portion of what Yahoo is getting, we’d be able to contribute way more,” said David J. Mongielo, a Lockport auto shop owner. “The rich get the tax breaks, and the poor don’t.”

Yahoo officials acknowledged that the incentive package was “very generous,” a spokeswoman for the company said, and that it “helped ensure our expansion in Lockport.”

She continued: “In return for these generous incentives, Yahoo has committed to giving back to the local community, specifically through our contribution of $3.5 million over seven years to the Community Foundation of Greater Buffalo.”

Yahoo also pointed out that the expansion will create 115 new jobs in Western New York. “We are proud to contribute to the local economy in such a positive way through this job creation. It’s worth noting that over 90 percent of the original Lockport staff for our first data center in the area were local hires when we opened our first data center there in 2010,” the spokeswoman said.

IDA Executive Director David R. Kinyon said about 20 percent of the 77 workers now at the data center live in Lockport, and 40 percent live in Niagara County.

The tax package matches that given to Yahoo in 2009 for the first phase of its data center: 10 years of complete exemption from property taxes, with the exception of the town’s special district taxes.

Yahoo will pay one-fifth of a full value tax bill in the 11th and 12th years of the center’s existence, and that figure will rise by another one-fifth every two years. Not until the 19th year will be data center be taxed at full value.

Also, Yahoo will be exempt from paying sales taxes on the building materials for the 150,000 square feet of space it intends to erect in three buildings, and it won’t have to pay sales tax on any computer equipment it brings into the buildings for 20 years.

These breaks, at current tax rates, will save Yahoo about $30.5 million, Kinyon said.

The company also is receiving $2 million worth of state tax credits and a seven-year renewable deal with the New York Power Authority for half-price hydropower. In all, the benefit package at current prices is worth $45.2 million. With the town’s special districts protected – Lockport data center operations manager Paul Bonaro said Yahoo paid $185,000 in such taxes last year – nearly $20 million in potential property tax revenue, at current rates, will be lost by the Lockport City School District and Niagara County.