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Assemblyman accuses Niagara IDA of illegal tax breaks

WHEATFIELD – The Niagara County Industrial Development Agency approved illegal tax breaks for a warehouse project, a state assemblyman charged Tuesday, but the IDA denied any wrongdoing.

The IDA contended that there was nothing illegal about the 15-year tax abatement for Reger Holdings, which bought the vacant former Sam’s Club and Walmart stores on the Niagara Falls-Town of Niagara border, and plans to erect a 60,000-square-foot building to connect them into a single 316,000-square-foot structure.

Assemblyman Sean Ryan, D-Buffalo, issued a news release calling on Jerry Boone, the state commissioner of taxation and finance, to investigate what Ryan considers a violation of state IDA laws.

Ryan said that because Reger has yet to line up any tenants for the planned building, it can’t guarantee its promise to the IDA of 23 new jobs. Furthermore, the assemblyman charged, state law bans IDA aid to mixed-use retail projects, and the company’s application could allow the building to be used for any of a variety of industrial, commercial, back office, multi-tenant or mixed-use purposes.

“If that were to come to pass, the assemblyman would be right, but we don’t know that yet,” IDA chairman Stephen F. Brady said. He said companies have three years to meet their job goals.

“That time period is given for a reason. Developers have to have an opportunity to keep their promises,” Brady said. “To suggest it’s illegal before he’s even got his project going is unfair to the developer.”

Brady said if the project doesn’t produce the promised number of jobs, the IDA’s policy calls for Reger to lose all future tax benefits and to have to pay back the ones it already received.

“We will take all steps to claw those benefits back,” IDA attorney Mark J. Gabriele said. “We don’t have to worry about the state doing it. We’ll do it ourselves.” Ryan also called on the IDA to reject a tax break for Spine Surgery of Buffalo Niagara, a medical practice which intends to move to a vacant former restaurant on Williams Road in Wheatfield. The application is scheduled for a vote at the IDA’s Sept. 14 meeting.

Ryan said to his way of thinking, a doctor’s office is a retail business because it involves “sales of a service to customers who personally visit a project.”

But there are exceptions to the retail ban, and one of them, which Brady said may apply in this case, is for a business providing a service that’s unique within the taxing jurisdiction.

That would apply “if it’s the only ambulatory spinal surgery center in the county,” Brady said. He said if the IDA board makes that finding, its conclusion must be ratified by County Manager Richard E. Updegrove, or the 10-year tax break the spinal surgery office seeks would be voided.

Brady said he thinks the spinal office is unique to the county. “I look at the building reuse as a benefit,” he added. “That’s a building that’s been a lot of things, but it’s nothing now and hasn’t been for years.”


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