BUFFALO, N.Y. (WIVB) — The Erie County Industrial Development Agency is just one organization with the power to approve millions of dollars in the form of tax breaks for qualified businesses located within Erie County.
The ECIDA believes if a developer receives tax breaks he or she will have incentive to invest money into restoring properties long abandoned. Richard Lipsitz, ECIDA Vice Chairman and President Western New York Area Labor Federation said, “It’s not taking money out of anybody’s pocket, it’s lessening the cost.”
In 2017, the ECIDA told News 4 they approved almost $26 million in tax incentives for 27 projects. The ECIDA said around 443 new jobs were created, along with more than two thousand temporary construction jobs. The average salary for those jobs was around $35,000. The ECIDA said thanks to those tax breaks, more than $485 million was privately invested and in about two years the community will get those tax breaks back because people with those new jobs will be spending money on food and housing in the community.
ECIDA President and CEO Steve Weathers said, “Everything comes with a commitment. If we are making a loan they have to pay it back. If we approve a tax inventive to them, they only receive the incentive if they meet an obligation both of investment and jobs.”
The 19 people on the ECIDA board approved a recapture or claw-back reform about three and a half years ago. The ECIDA said the reform is working. In 2017 they told News 4 seven companies gave back more than $650,000 in tax breaks, because they either failed to create jobs or did not privately invest what they promised. The ECIDA said that money is sent to the state and the state is in charge of distributing it to the county and city.
Developer Mark Croce said, “At the end of the day, the goal for both the city and county and state is to create new jobs.”
Fred Floss, Economics Chair at Buffalo State University believes a lion’s share of the benefits go to developers like Croce. Floss said, “All across the country all we are really doing is giving taxpayer money away to rich people who are able to play the system.”
ECIDA CEO Weather said, “Not all of our incentives go to a rich developer sometimes they just go to somebody that is a regular person like you or I but they bring a qualified project.”
Floss doesn’t blame the ECIDA but rather the entire IDA system across the country. Floss said, “We’re giving taxpayer dollars away, how we give it is totally irrelevant and it’s coming out of money we had that could have made Buffalo better.”
Floss isn’t completely against renovating old buildings, but he says turning some into mixed-use spaces with pricey apartments, offices and restaurants will put money back into the developer’s pocket, instead of having a huge impact on people living pay check to pay check in the surrounding community.
Bottom line, Floss says there needs to be more oversight.
“Making sure we are not just stealing from our left pocket and putting it back into our right pocket,” said Floss. “It might make us feel better, but over the long run Buffalo will be worse off.”
The ECIDA admits more reforms need to be approved so everyone reaps the benefits. Currently, developers aren’t required to include affordable housing within their buildings to receive tax breaks. Many people have concerns about being priced out of their own neighborhoods. Former New York State gubernatorial candidate Jimmy McMillan famously said, “The rent is too damn high” and the ECIDA is one organization with the power to change that.