The Clarence Industrial Development Agency has displayed typical municipal IDA tendencies to give public money in the form of tax breaks to projects that do little for economic development.
The action has set County Executive Mark C. Poloncarz on edge, describing as inappropriate approval of more than $100,000 in tax breaks for a Transit Road mixed-use project by Russell Salvatore Jr.
Poloncarz wrote a letter to the Clarence agency voicing his objections to the tax incentives for 6449 Transit Road. The incentives were granted under the adaptive reuse provisions of the agency’s policy. That might not be objectionable except for the fact that the entire site was cleared before construction began. It seems like adaptive reuse should mean reusing something.
The Clarence town attorney pointed out that adaptive reuse allows for demolition of a building if deemed necessary. If that is the case, then those guidelines need to be changed to explain more fully what adaptive reuse means.
The project is known as the Abbey, a 20,000-square-foot, two-story building on the east side of Transit, north of Old Post Road, with a mixture of eight two-bedroom luxury apartments and four retail spaces. Not exactly industrial and hardly adaptive reuse.
In contrast to the giveaways by the Clarence IDA is the much tougher stance taken by the Erie County Industrial Development Agency. The agency voted to recapture tax breaks previously granted to a Cheektowaga company, API Heat Transfer, which did not live up to its promise of additional jobs and instead laid off 40 workers. The company was hit by the downturn affecting the oil-and-gas industry it serves.
The board agreed to immediately cancel a property tax break, but allowed the company two years to restore the jobs before it faces clawback of its sales tax breaks. The ECIDA earlier began efforts to claw back incentives from Cheektowaga-based Derrick Corp., a maker of oil and gas equipment that cut more than 100 jobs. The agency’s board had offered the company two years to restore those jobs and meet obligations, but instead the company voluntarily gave up the incentives.
This is a difficult situation because these tax breaks have gone to manufacturing companies – not questionable retail or residential projects – and those companies are now struggling to stay afloat as a consequence of what is happening in their industry.
The Erie County Industrial Development Agency showed admirable flexibility in its willingness to give the companies more time, except for the immediate cancellation of API’s property tax program. It should reconsider abruptly pulling that rug out from under API.
The ECIDA has shown toughness on companies seeking and receiving tax breaks. The Clarence IDA and other local municipal agencies need to toughen up.