The Cost of 9 IDAs in Buffalo-Niagara

Assemblyman Sean Ryan (A-144) held a press conference yesterday to protest the way in which Industrial Development Agencies in Erie County do business. Specifically done in response to the Amherst IDA’s granting of an incentive package to facilitate Premier Liquor & Gourmet’s move from Kenmore to Amherst, Ryan issues three documents outlining the cost/benefit to running nine separate IDAs in Erie and Niagara Counties. By comparison, New York City has only one IDA.

This chart outlines the cost of these tax breaks, and what other things they might have bought, and then compares the annual IDA tax subsidies that are granted each year in New York State against the much-touted Regional Economic Council regional plans submitted and reported on in Albany last week:

IDA chart : Assemblyman Sean Ryanhttp://www.scribd.com/embeds/75676491/content?start_page=1&view_mode=list&access_key=key-1cin0wzjammva2g84ts3//

Ryan avers that the IDAs have an incentive to remain open as separate entities, and to grant property and sales tax breaks even in cases where one WNY community is poaching from another – the fact that each announced IDA transaction results in a fee to the IDA itself.

IDA Report – Assemblyman Sean Ryanhttp://www.scribd.com/embeds/75676457/content?start_page=1&view_mode=list&access_key=key-p407dtjcd99ij974twf//

Even more egregiously, if the IDA recipient business fails to meet its obligation to create jobs, there is no recourse or “clawback” provision. The common misconception is that IDA incentives exist to lure businesses to the area. Yet Ryan’s study reveals that, of all 71 incentive packages given by the IDAs in Erie and Niagara Counties in 2010, exactly one was to attract a business from out-of-state. The rest were for the expansion or intraregional relocation of existing businesses.

It’s high time the region started streamlining its business development and retention strategies in a coordinated, regional way. IDA incentives given to well-off local companies as a “freebie” with little to no return on investment, which oftentimes results in one WNY community poaching from another needs to stop. Assemblyman Ryan is on the right track here, and it echoes what Erie County Executive-elect Poloncarz was advocating during the last election cycle.


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