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Tuesday, July 9, 2013 at 7:40 pm

GCEDC staff in San Francisco promoting STAMP

post by Howard B. Owens in GCEDC, STAMP

This week, staff members of the Genesee County Economic Development Center are at SEMICON West, the largest trade show globally for the semiconductor industry, held at the Mascone Center in San Francisco.

The staff is there to promote WNY STAMP, the high-tech/nano-tech industrial park in the Town of Alabama that GCEDC hopes will some day be home to at least one large technology company employing thousands of people.

Joining the GCEDC staff are representatives from Greater Rochester Enterprise, Buffalo Niagara Enterprise, Rochester Institute of Technology, and the University at Buffalo.

The photo is from GCEDC's Facebook page. At left is Chris Suozzi and second from left is  Rachael Tabelski. IDs are not provided on the other people in the picture.

Friday, June 21, 2013 at 8:46 am

First food processing tech class earns certificates

post by Howard B. Owens in batavia, business, GCC, GCEDC

Press release:

Through financial support provided by National Fuel and Rochester Institute of Technology (RIT), the first class of 25 graduates received certificates as part of a workforce development program targeting the food processing industry.

Certificates were awarded to the graduates in Lean Six Sigma Yellow Belt through RIT, basic dairy science and sanitation through Cornell University, as well as team building and OSHA training in a manufacturing environment through The BEST Center at Genesee Community College.

“This program is just another example of the high level of collaboration in our region between the public and private sectors and in this instance, our centers of higher education and food processing companies,” said Steve Hyde, president and CEO of the Genesee County Economic Development Center. “If we are going to create a world-class industry cluster in the food processing industry, then we need to make sure our workforce is highly trained and educated.”

Cornell University’s Department of Food Science and Cornell Cooperative Extension has been a long-term resource to the food growing and dairy processing industry in Western NY.

“Workforce development is now a key to the growing industry and we are continuously developing and improving our training programs and accessibility to meet industry needs and to support economic development," said Tristan Zuber, Dairy Foods Processing Extension associate with Cornell University.

The first graduating class of 25 individuals was from a pool of 78 applications. Sixteen graduates were from Genesee County; three from Livingston County; two from Orleans and Monroe counties; and, one from Wyoming and Cattaraugus counties.

One graduate has been hired while 18 graduates will visit and tour Yancey’s Fancy, an artisan cheese maker in Corfu, as part of a job application project at the company. Alpina and Muller Quaker Dairy are also interviewing and considering the graduates at their yogurt manufacturing facility in the Genesee Agri-Business Park.

“This is just the first step in a process to ensure that as the food processing industry grows there is an ample supply of labor to fill jobs,” said John Jakubowski a workforce consultant hired by GCEDC. “The certificate program provides a short-term solution to fill a gap, but we need to continue working on a longer term plan so that people who want a career in food processing have the skills and training to be successful.”

As part of this process, Genesee Community College has asked the New York State Education Department to approve a two year Food Processing Technology associates degree. The program has already been approved by the GCC Board of Trustees and is now under review by the State University of New York as well as SED.

“While anticipating the implementation of GCC’s full credit Food Processing Technology program, The BEST Center will be offering three more sessions of the two-week, intensive certificate program,” said Lina LaMattina, director of Business Skills Training at The BEST Center. “We are also reaching out to numerous companies within all segments of the food industry to expand employment opportunities for the program participants. After a very successful first class, we are looking forward to the next session which starts September 23, 2013.”

Those interested in applying to be part of next training cohort should contact the Genesee County Career Center (One Stop) in the Eastown Plaza, 587 E. Main St., Suite 100, Batavia, (585) 344-2042. Applicants take ability tests in math and reading. If needed, assistance with these skills is available.


May 2013 GCEDC Food Processing Training Program Graduates (all of New York):

Craig Barnes – Le Roy
Dawn Czaja – Oakfield
Victor DiGregorio – Byron
Mark Ebersole – Mt. Morris
Mary Fulkerson – Rochester  
Jeffery German – Batavia
Laurie Gerstenslager – Delevan
Donna Heininger – Batavia  
Elizabeth Horner – Darien Center
Jeanne Jansch – Dansville
Kevin Jones – Batavia  
Sharon Joyce – Batavia 
Jake Kent III – Henrietta
Steven Lindsley – Warsaw
Donald Lowe – Batavia  
Catherine MacConnell – Bergen   
Jacob MacConnell – Bergen
David Minervino – Medina
Thomas Misisco – Pavilion  
John Mosher – Bergen
Rachel Neilans – Alexander
Elise Prevost – Leicester
Daniel Sobczak – Batavia
Paul Stack – Elba
Jamie Unger – Kent
 

Wednesday, June 19, 2013 at 2:02 pm

Three questions for declared County Legislature candidates about GCEDC

post by Howard B. Owens in county legislature, GCEDC, politics

It's not every year that a local election has at least one issue that might sway voters. With all the attention garnered by the Genesee County Economic Development Center since the last County Legislature election, this November the opinions candidates hold on GCEDC funding and its policies might be an important issue for voters. We thought it a worthwhile public service to get candidates on the record on this issue as soon as they were declared candidates.

In posing the questions to the GOP candidates -- the first group to declare -- we found not all of the candidates agreed with that assessment.

We received objections to answering questions along the lines that it was too soon; wait until the election is closer; "my position is already well known"; and, most surprising, that candidates shouldn't have to answer questions before all of the candidates are declared.

There is apparently some concern that since there's still weeks left for candidates to declare, some candidates thought they shouldn't be asked policy questions until after the filing deadlines. None of the candidates explicitly stated that they fear their answers might prompt another candidate to enter the race. They did express concern that they would be sharing opinions that would be read by potential opponents before those opponents needed to answer the questions.

That's not a line of thinking The Batavian finds terribly persuasive. Any candidate should be willing to speak openly and publicly about their positions without fear of the political repercussions. If an opinion might spur another candidate to enter the race, well, then, that's good for democracy. If a candidate lacks sufficient confidence in a position that it will be easily targeted by opposition, then perhaps he or she should reconsider that position.

The filing deadlines are July 11 for candidates running on an established party line, and Aug. 20 for a candidate running as an independent (creating his or her own party line).

Below are the answers to our three GCEDC-related questions we received from six of the declared Republican candidates, the three declared Democrats and the lone independent to enter the race so far. After the three questions are statements we received from the three candidates who did not answer the questions. 

Question 1: Traditionally, there has been an item in the county budget to transfer money to GCEDC to assist funding the operations of the agency. Last year,  GCEDC received $215,000 in the county budget. Do you support continuing this fund transfer to GCEDC, or should it be eliminated or modified?

Shelley Stein, incumbent, Dictrict 5: The Genesee County Legislature has supported GCEDC at approximately 20% of the GCEDC 2013 approved budget. Moving forward I would support same level of funding to provide for foundational costs of GCEDC operations. Eighty percent of GCEDC’s budget must be derived from providing services and collecting fees for services from business community, grants and contractual annuity payments, not taxpayer dollars. Additionally, LeRoy Business Council and small businesses located in LeRoy are very supportive of the foundational funding of the GCEDC.

Earl Funderburk, challenger, District 5: I do not support the continuation of county budget funds to GCEDC. They have millions of dollars from fees and no longer require funds from the county.

Esther Leadley, incumbent, District 6: Every year the upcoming County budget gets several months of intense scrutiny – by the whole legislature, not just a committee. GCEDC’s funding request is always included in that scrutiny. Please note that State and Federal mandates continually erode the County legislators’ ability to provide a quality of life that Genesee County residents have come to expect.

We legislators have already begun general discussions about the 2014 budget. As we go forward, I am confident GCEDC’s funding request, when it is received, will be one of the topics of discussion. I will weigh all input and make my decision at that time.

Please also note that companies considering making a significant investment in Genesee County want concrete evidence that the County’s leadership has financial “skin in the game.”

Gregg Torrey, challenger (GOP endorsed), District 6: Every item included in the County budget needs be evaluated and that includes the funding which assists the operations of the GCEDC. With the increasing pressure put on County Government by State and Federal unfunded mandates each department must justify its funding request.

I was encouraged to see that the incentive compensation system at the GCEDC was eliminated last year. I am now more confident that the funding is directed to the intended purpose of supporting the economic development mission for the County.

With that being said, the EDC has shown a tremendous return on investment for the County and makes the County money while its funding is only a very small portion of the overall budget (under 1%). The County funding also shows that we are committed to investing in ourselves and the County’s support of the EDC’s efforts which include leveraging other State and Federal money. This support of the GCEDC does not go unnoticed during the attraction process when potential companies are considering bringing investment into our community.

Marianne Clattenburg, incumbent, District 8: My position on this issue is well documented and on the record. This was my first budget vote as a new legislator and I took the opportunity to voice the concerns that many of my constituents have expressed regarding GCEDC funding.  Many opposed the salary and bonus structure of the organization. My position is that public employees who enjoy the benefits of a NYS retirement should not receive bonuses. The second reason I did not support the funding was that I wanted to send a strong message to the GCEDC that redevelopment must also become a priority of the organization. I represent the City of Batavia. We have needs and issues that are different than those of the rural towns around us. If the GCEDC is going to work as the county’s public benefit corporation dedicated to development, then it must strive to improve all areas of the county. I will dedicate my second term to working with the organization to see that this is done. My future support would be contingent upon the organization's willingness to work toward the goals of redevelopment, particularly in the City of Batavia.

William Fava, challenger, District 8: I would support a modification of the amount transferred from Genesee County to the GCEDC Agency. Originally, the agency needed the start up fund support, but now the agency has been successful in meeting yearly goals. The Agency has increased internal manpower to parallel anticipated growth and created sub organizations to minimize potential legal problems for Genesee County. In addition, the Agency continues to look forward (to) bringing in more business growth opportunities to the area…from all points of view, this State/County endeavor appears to be a success for the County. Modifications should be appropriate over the next few budget cycles to bring the annual fund down to a more reasonable amount. In doing this, the Agency can continue to document County support in any advertisement to a potential customer. The appearance of “Lack of County Support” has been mentioned many times during previous discussions concerning a decrease in funding…this is  simply a reduction, not an elimination of the fund. A modification would be a win-win solution for the Agency and the County taxpayer.

Ed deJaneiro, incumbent, District 9: It now appears that the GCEDC finances are strong enough to continue without a County contribution.

Bob Bialkowski, challenger, District 9: I am very prudent when it comes to spending tax dollars so I would insist on a complete accounting of this expenditure. The way the state has the EDCs set up is that if you want to participate you have to pay. This means that if the county doesn’t support the GCEDC we won’t be considered for the grants the EDC receives, so yes I would vote to continue this support. Genesee County has done very well for itself considering that in a recent survey New York State placed 49th in economic development out of 50, but here we have seen tremendous growth. Last week Texas announced that it was aggressively marketing for New York businesses to move there. They have no state tax. New York needs to learn to treat all business the same and discontinue making special deals.

Andrew Young, candidate, District 4: Yes, I support the County investing in its goal of creating jobs, promoting business capital investment (which converts to tax base) and keeping our kids in our community.

Frank Ferrando, incumbent, District 7: As you indicated, the $215,000, or an amount similar, has been transferred to the GCEDC for several years. It’s not new. What I believe was disturbing to most local citizens was the bonus pay model used by the GCEDC with the assumption that the subsidy supported the bonuses. I and two colleagues on the Legislature voted against last year’s budget in objection to that practice. Bonuses are no longer a part of the GCEDC’s compensation practice. This year I will vote for the subsidy if the GCEDC Board presents to the Legislature a detailed description of a specific project the subsidy will be used to support. A demonstration of support by the County is important and it represents about .1 percent of our overall budget.

More after the jump. Click on the headline to read more.

Friday, June 7, 2013 at 8:12 am

GCEDC announces approval on four projects with a promise of 22 new jobs

post by Howard B. Owens in batavia, bergen, business, GCEDC

Press release:

The Genesee County Economic Development Center (GCEDC) approved four projects at its June board meeting. They total approximately $2 million in investments as well as the retention of 91 jobs and the creation of 22 new jobs.

“All of the projects being considered by the board are investments in infrastructure which means the companies seeking benefits intend to be here for the long term,” said Steve Hyde, GCEDC president and CEO. “Companies typically do not invest in facilities and infrastructure without long-term plans so it is great to see this commitment to our region.”

Mega Properties, Inc., (Koolatron) is a Canadian company that manufactures, markets and distributes various portable thermoelectric cooler parts and components. The company is proposing to invest $775,000 in its operations that would retain 11 jobs and create six new jobs. Because the company is seeking more than $100,000 in incentives – in this case $190,000 – a public hearing must be scheduled.

Imagination Industries is seeking to build a 7,015-square-foot facility at 8240 Buffalo Road in the Town of Bergen. The multiuse facility will house an indoor firing range, training center, gunsmith services and a laser engraving business. The company plans to invest nearly $400,000 that would create 10 new jobs.  The project is allowable under state retail restrictions as the purpose is to make available services which would not be, but for the project, “reasonably accessible” to residents of the municipality where the project is located.  

The company is seeking a sales tax exemption of $19,970, a mortgage tax exemption of $3,750 and a property tax abatement of $63,195. The Board found that the project meets the goods and services retail clause in order to approve the application.

Reinhart Enterprises operates a 25,720-square-foot multi-commercial tenant facility on Liberty Street in Batavia. Due to flooding this past year, 4500 square feet of space was vacated. The company is looking to improve its facility and is planning a $206,000 capital investment for drainage and parking lot improvements to enhance the property for current and prospective office and corporate tenants. The company is seeking a sales tax exemption of $9,888. The investment would create three new jobs and retain 80.

Jackson Square LLC, the former Cars Warehouse which was built around 1880 in the area of the city known as Jackson Square, is proposing to convert the former structure into a mixed-use commercial and residential site. The ground floor will have flex office/light industrial and four new market rate apartments on the second and third floors. 

The City of Batavia is the current owner of building and will transfer the title to the Batavia Development Corporation for sale to Jackson Square LLC. The company is seeking a sales tax exemption of $24,816 and a mortgage tax exemption of $2,994 contingent upon Jackson Square LLC purchasing the building.

Monday, June 3, 2013 at 10:05 pm

GCEDC CEO out of the spotlight during ceremony for big yogurt plant he helped put on the map

Throughout the 90-minute opening ceremony for the new Muller Quaker Dairy Plant in the Genesee Valley Agri-Business Park, Steve Hyde sat in the second row and smiled.

Not one speaker -- and there were five of them -- mentioned Hyde by name. There was no official recognition of his work to bring this day about.

Still, he smiled.

You couldn't help but think of a proud father watching his son or daughter graduate.

Asked how he felt afterward, Hyde, as he usually does when posed such questions, demurred and praised others.

"It’s a great day for everybody in the community," Hyde said. "This was a dream of mine and a lot of other partners. It’s 10 years in the making and this is just phase one."

Hyde has his critics. Genesee County Economic Development Center, the organization he runs, has its skeptics. But the Muller Quaker plant is a big deal, especially for a county of only 57,000 people that hasn't had a big factory opening in more than five decades.

PepsiCo and Theo Muller Group invested $200 million in the facility and that dollar figure doesn't count product development, designs for new trade-secret machinery to create the Greek-style yogurt, new software to run the plant and the planning that goes into bringing a new product to market.

Ken Adams, president of Empire State Development, indicated he was a little bit awed by the idea of a global powerhouse like Pepsi and a German-based company like Theo Muller coming to Upstate New York.

"Having PepsiCo here, having Muller here, is like a global seal of approval for this park and its infrastructure," Adams said.

And he gives a lot of the credit for making it happen to Hyde.

"Steve Hyde as far as I’m concerned, he really put the agri-business park, this particular location, on the map at a statewide level," Adams said. "Steve is always in Albany working very closely with the legislators from the area, senate and assembly, working very close with the governor’s office.

"I’ve told this to him, so I'll say it to you," Adams added, "Steve Hyde is a forceful, well respected advocate for investment and economic development here in Batavia. He really put the site on the map and then he also pulls everybody together at the local and state level to make sure a project like this actually goes smoothly. That’s important for the company, for the investors, that there are no hiccups along the way."

A critical factor with Muller Quaker -- called Project Wave during the planning process -- was the speed at which all of the necessary permits could be secured. A lot of credit goes to Town of Batavia and Genesee County officials, but the GCEDC staff laid the ground work to have a shovel-ready site and push the paperwork through the process.

In his speech today, Theo Muller praised the local authorities who got approval for the plant so quickly.

"It would be unimaginable in Germany," he said with a wink. "In Germany that would have taken at the very least three years. You have to send a whole case of yogurt to them over there to get anything done."

Sen. Charles Schummer called the ag park a great idea of local leaders and said when GCEDC came to him for help, he was happy to jump in and secure federal grants for infrastructure.

"There is no better way to strengthen our dairy industry and create jobs than to build a park like this, which has helped attract this great company," Schumer said.

Assemblyman Steve Hawley, who helped with the state legislative process on the project, noted that in any big project like this, stretching, as it does, across the boundaries of local, state and federal responsibilities, there are a lot of people who deserve credit for bringing it together, but Hyde certainly provided critical leadership.

"This is a big deal," Hawley said. "It's one of the largest plants in the country. We need jobs. I hear about it every day from constituents."

It takes a lot of work, Hawley said, to untangle the regulations that can hold up a business and a lot of people had a hand in bringing it together.

"A lot of the credit goes to Steve, but it's a team effort," Hawley said.

Danny Wegman, CEO of Wegmans and president of the Finger Lakes Economic Development Council, is also a Steve Hyde fan. He believes Hyde will pull off the gargantuan task of developing WNY STAMP, the proposed 1,200-acre, high-tech manufacturing park in Alabama that could employ 9,300 people some day.

It's an audacious project, but Wegman said when there are people passionate about projects, they can make things happen.

"Steve is very excited about this," Wegman said last week during the governor's visit to Genesee Community College. "There are a lot of confidential things that can't be shared, but I feel confident that if somebody I believe in is excited about it, the chances of it happening are pretty good."

The success of the ag park only enhances the chance's of success with STAMP, Adams said.

"We’re very hopeful," Adams said. "It’s a globally competitive industry. The opportunity is at STAMP. It’s a great site. It’s much bigger than this site, the agri-business park, but Steve has done a good job at lining up all of the vital ingredients for that site -- power, water, obviously the land, permitting, all the things you need to really be shovel-ready when the right business comes along. He’s the chief marketer. He’s going to Albany tomorrow. He’s on it and he works very closely my colleagues at ESD on marketing STAMP, so we have our fingers crossed."

Hyde said it's all about building on the natural assets of Batavia and Genesee County and showing that can be done with the ag park will translate into confidence for other projects, such as STAMP.

"It helps build credibility in the eyes of some of the folks in the leadership roles in the state that we know how to do this here at the local level," Hyde said. "This (agriculture) is an industry where the regional assets were in great demand and we could make an impact, and when you look at the regional assets in the nano stuff in our region we’ve got the same situation developing."

Monday, June 3, 2013 at 8:53 pm

Officials optimistic about yogurt and Genesee County with opening of Muller Quaker plant

According to Indra Nooyi, CEO of PepsiCo, Batavians owe a big thank you to Danny Wegman.

No, not for promising one of his unriviled grocery stores to Genesee County, but for steering her attention toward yogurt and the need to produce it in Western New York.

"When I visited Danny in his flagship store in Rochester, Danny said to me, ‘Indra, you should get into the yogurt business because it’s growing extremely rapidly and if you do, the plant has to be located right around here in Upstate New York,' " Nooryi said. "I listened to Danny  because Danny is one of the most respected thinkers in the industry, and, Danny, we delivered on the promise.”

Wegman stood at the back of a tent crowded with local and state dignitaries and smiled broadly.

Last week, Wegman told The Batavian that it might take build out of the STAMP project in Alabama to bring a Wegmans to Batavia. Today, Wegman (top inset photo) had a slightly different take.

Coming out from a tour of the new Muller Quaker Dairy plant, he said, "more projects like this and we'll be here."

The dairy plant -- which will manufacture two brands of Greek-style yogurt, Muller FrutUp and Muller Corner -- officially opened today.

To start, it operates three production lines, employs 180 people in a 350,000-square-foot facility that could one day accommodate as many as 16 production lines.

Already, the plant produces 120,000 cups of yogurt per hour.

Sen. Charles Schumer announced during opening ceremonies that Muller Quaker has reached an agreement with the Upstate Milk Cooperative to source all of its milk from WNY dairy farmers.

The OA-TK-A plant in Batavia will produce the milk protein that Muller Quaker uses in its yogurt production (rather than strain milk as done in traditional Greek yogurt production, Muller Quaker adds protein to give its yogurt a similar rich, silky texture).

"This is an amazing shot in the arm for our economy here in Western New York and I am pledged to continue to do whatever I can do to make this the most successful venture in Western New York," Schumer said.

The project brings together two companies -- the worldwide giant in the food and beverage industry, PepsiCo, and a much smaller, but well respected, dairy company from Germany, the Theo Muller Group.

Stephan Muller, who moved to the United States to assume the reins of the new company, spoke about the entrepreneurial spirit, the risk taking of the $200 million investment by the two companies.

Muller represents the fifth generation of Mullers in the dairy business.

His father, Theo Muller, said through a translator, that the company made previous attempts to break into the U.S. market.

Stephen Muller described his father as a bit of a technophobe who never used a computer and then he got an iPhone just after Stephen Muller arrived in the U.S.

"He sent me a text message," Muller said. "I think it was his first one or one of his first ones. He said, ’520 years ago Christopher Columbus started his journey west with just three ships. Now you are our Columbus. Capital, excellent knowledge now are your ships, and one thing one cannot buy, the iron will to have success."

Nooyi (second inset photo) believes the product will be successful

PepsiCo already has a track record of success of developing a balanced portfolio of food and beverage products that she described as "fun for you, good for you and better for you."

"PepsiCo is becoming a real force in the good-for-you space," Nooyi said. "We have the best go-to-market systems and superior marketing, combined with Muller’s leadership in phenomenal dairy products, I think we’re going to become a real force in the dairy business in North America."

The success in just getting the plant open bodes well for Batavia, Schumer said. With 90 acres of available space at the Genesee Valley Agri-Business Park, there will likely be more jobs coming to town.

"We could employ as many as 1,200 more people when the food processors learn of the transportation advantages, the food production advatnages and just the work force advantages that we have here in this area," Schumer said.  "Food processors from around the world are learning what we have to offer."

Ken Adams, president of Empire State Development, said the success of today's opening is something that will attract more investment in the park, especially in supply chain support for Muller.

"It’s a very powerful confirmation of this facility, the agri-business park as a center for international investment," Adams said. "One thing I’m struck with at this ceremony is you’ve got a global leader like PepsiCo partnering wth Muller and obviously Quaker, the PepsiCo brand, coming together right here in Batavia. The project confirms Batavia, Genesee County’s position, certainly in the Northeast if not North America, as a center of the yogurt universe."

To purchase prints of these photos, click here.

Sunday, June 2, 2013 at 4:37 pm

During stopover in Batavia, DiNapoli says IDAs should not broadly interpret law on tax breaks for retail

The state law meant to curtail tax breaks by IDAs for retail developments should be defined as narrowly as possible, according to Comptroller Thomas DiNapoli.

If IDAs broadly interpret the law and push through subsidies for projects that should be outside its scope, then reforms may be necessary, DiNapoli said.

"They should certainly interpret it as narrowly as possible," DiNapoli said. "Having not been a Legislator at the time, I can't overly interpret on their behalf the intent. But what I think we'll do with IDAs that are too broadly interpreting that exception is, we'll make recommendations and work with legislators to tighten up that definition, if that seems necessary to curtail the use of IDA incentives for retail."

DiNapoli was in Batavia this afternoon for a meet-and-greet fundraiser hosted by the Genesee County Democrats at Larry's Steakhouse.

Throughout a six-minute conversation with The Batavian, DiNapoli made it clear he doesn't believe IDAs should be, as a general rule, handing out tax incentives to retail projects.

Asked whether retail chains really wouldn't come to a community unless they get tax breaks, DiNapoli said "that probably varies from community to community," but went on to explain the problem, as he sees it, with such IDA incentives.

"The kind of retail projects we've seen in recent years are the kind of projects that in the long term do not promote the kind of job creation and economic development that would really make a lasting difference in a community," DiNapoli said.

"I continue to have very healthy skepticism of the value of such incentives. As we always point out, there is a cost to the communities that isn't fully realized, so it underscores that the kinds of economic development (undertaken) should be of greater significance, more long lasting, have a transformational impact, and retail doesn't really provide that."

In early May, the Genesee County Economic Development Center Board approved $1.8 million in tax incentives for COR Development to remodel the vacant space at Batavia Towne Center formerly occupied by Lowe's Home Improvement.

The package includes a reduction in property taxes and forgiveness of state and local sales taxes on building material and store fixtures.

The state law prohibits IDAs from giving away state sales tax money unless certain findings are made (there is no law that prohibits other tax breaks for retail projects). The potential findings are that the project is in a highly distressed area, is a tourist destination or will provide goods and services not readily available to area residents.

It was on the last exception that the GCEDC board based its decision on. There was no evidence presented at any public meeting to substantiate the finding.

The only known tenant at the time of the vote was Dick's Sporting Goods.

Genesee County has five small retail outlets that sell sporting goods, four of which are locally owned.

Among the arguments put forward by GCEDC CEO Steve Hyde in support of tax breaks for COR is that he needs that Lowe's space filled in order to attract major corporations to projects such as WNY Stamp and the Genesee Valley Agri-Business Park.

"I'm not sure I buy that argument," DiNapoli said. "I'm not in a position to judge that, but that argument is a stretch."

DiNapoli acknowledged that interpretation of the law is largely left up to the local IDAs.

"Even the report we put out every year (on IDAs in NYS), even that is limited by the fact that it's self-reported information," DiNapoli said. "As people have pointed out, IDAs, as well as other authorities in New York, tend to operate with a level of autonomy that I think doesn't provide a maximum opportunity for accountability.

"As you point out," he added, "there are certain exceptions and there certainly there isn't any easy way to clamp down on an IDA that might be too generous in interpreting that exception."

Friday, May 31, 2013 at 8:28 am

Cuomo did not criticize tax breaks for COR Development

post by Howard B. Owens in Andrew Cuomo, Batavia Towne Center, COR Development, GCEDC

During the "gaggle" (that's what reporters call it) with Gov. Andrew Cuomo following his speech at GCC yesterday, I asked him specifically about Genesee County Economic Development Center providing tax incentives to the retail project at Batavia Towne Center.

In these mini-press conferences, reporters are only given enough time to ask a few questions and it's difficult to ask follow-up questions, so I fumbled through my question (which really should have been a two- or three-parter), trying to cram in as much information into a short time as possible (and it was still a pretty long-winded question).

Another media outlet has reported that Cuomo was critical of the retail tax subsidies given to COR. The quote used: “It wasn’t the smartest investment of money."

The quote, in my view, is being taken out of context.

Here's Cuomo's full response to my question:

Your case is fact specific and I would have to look at the actual facts to see what they did. We had proposed IDA reforms. I believe there are economies that I can find there and I believe there are incidents where you can find it wasn't the smartest investment of money. That's why, that's one of the reasons I like the approach we're talking about here today. It's simple. It's clean. It doesn't have a lot of bureaucratic red tape. It's very easy to administer. Very few government officials required to administer it. So I think it's preferable to a lot of things we've done in the past.

Included in Cuomo's budget was a reenacted law meant to curtail IDAs providing tax breaks to retail projects. I asked Cuomo what the intent of that law was. He said, "Just improve the process and address the kind of abuses you've been talking about." He then said thank you and turned and left.

I didn't report any of this because I didn't find it particularly newsworthy. He couldn't address the specific local issue (hardly surprising, but I had to ask) and his answer to the more general "intent" question referenced my own question, which by his own admission, he didn't know much about. That seemed like a kind of circular logic that didn't make a lot of sense.

However, given that another media outlet used the quote, and though I don't mean to be critical of a fellow reporter, I feel obliged to put the quote in context.

Thursday, May 30, 2013 at 8:16 pm

Cuomo pitches 'tax free' at GCC, a campus that might be well suited for the program

post by Howard B. Owens in business, GCC, GCEDC, New York Tax Free, taxes

Genesee Community College sits high on a hill surrounded by a lot of open space.

Gov. Andrew Cuomo visited GCC today to promote his "New York Tax Free" proposal, which would allow SUNY campuses such as GCC to play host to new businesses or businesses that are creating new jobs.

Up to 200,000 square feet of land around a SUNY campus could also be used for the 100-percent-tax-free zone.

All that open space around GCC, then, might also be described as opportunity.

"That was the vision 10 years ago that we started developing with GCC and Dr. Steiner and now Dr. Sunser," said Steve Hyde, CEO of GCEDC. The agency now has offices across the street from the college campus in what's known as the Upstate Med-Tech Center. "I think we're really well positioned to rock and roll together and really make a difference here."

Cuomo is clearly passionate about his proposal.  Whatever its critics might have to say about it, Cuomo has an answer and at times during his speech and afterward made his points with the fervor of an evangelist for Upstate New York.

Cuomo:

Nobody ever said (speaking of those who have left New York), I didn’t like New York or I didn’t like Upstate New York. Nobody.

We did this (mess up the state and cause 50 years of decline) to ourselves. We did this to ourselves because this state has every asset imaginable.

I spent eight years in the Clinton Administration. I worked in every state in this nation, literally, dozens and dozens of times. I know everything else that’s out there. I’ve seen the best that every state has. No state has to offer what we have to offer in New York. No state has our combination of talents.

Our geography, our diversity, our history, the most beautiful natural resources, mountain ranges, the greatest cities, beaches, we have it all, all in one state – the best of everything with the distillation of the best of America -- in one state called New York.

So it’s not that that they're beating us. We're beating us. We created these conditions. We can reverse these conditions. Reduce the taxes. Make this state as competitive as any state out there from a tax point of view.

"NY Tax Free" would turn SUNY campuses into zones with no state or local taxes of any kind for businesses based on the campuses (or in the 200K zone), and a company's employees, for up to 10 years.

The businesses would have to match the educational mission of the host campus, working in industries of related fields of study.

Cuomo's dream is clearly to incubate the next Apple or Google.

"If you look at the places that are creating jobs, it's the higher education institutions that are doing research and development. It's the 28-year-old who develops the new chip or the new iPhone of the new application, but the schools are actually creating the jobs."

These sorts of companies are getting founded on NY campuses now, Cuomo said, but 75 percent of them leave New York within the first year, taken either by founders or investors to lower tax states such as Florida or Texas.

Yes, the proposal is big and bold, Cuomo said. No other state in the nation has ever dared to take on such an audacious project, but New York does big and bold well, Cuomo said (while a picture of the Erie Canal was projected on the screen behind him).

Big problems, he said, require big solutions.

"People have been leaving," Cuomo said. "Jobs have been leaving. At the same time, we have more and more government and the costs of governing are going up and up while there are fewer and fewer people to pay for the increasing cost of government, which makes taxes higher, making the tax burden higher, which causes more people to leave. That's the dynamic and the longer the dynamic continues, the worst it gets."

Upstate, especially, needs the help, Cuomo said, and with 55 of the 64 SUNY campuses located in Upstate, and 95 percent of Upstate residents living within 30 miles of a SUNY campus, this proposal makes a lot of sense.

In the past several years, there has been only a 5-percent increase in new jobs in Upstate, while New York City has grown jobs at a clip of 16 percent. The 5-percent growth rate doesn't even keep up with the national average.

The proposal would create 120 million square feet of entrepreneurial space in Upstate, Cuomo said, which is more commercial space than in San Francisco and Philadelphia combined, and more than Buffalo, Rochester and Syracuse combined.

Speaking with reporters after his speech, Cuomo said the major criticism he's heard of the proposal is that taxes should be lowered to zero for everyone.

"It's the right idea to have zero taxes across the board," Cuomo said, "but there's some problems with the details."

If the proposal seems unfair, Cuomo argued that the current tax system is unfair.

"There is not a level playing field in the current tax code," Cuomo said. "The more you make, the more you pay. Some businesses get tax breaks that others don't. We have tax breaks for manufacturing. Why? Because we decided we want manufacturing businesses here. We have tax breaks for the film business ... because we want to produce movies here. It's a falsity that the tax code is equal, but for this. The tax code is anything but equal."

He also argued that residents around SUNY campuses will benefit from the job creation, with employees of these companies buying groceries, cars and houses locally.

"There will be economic activity in your community and that will be a good thing for you," Cuomo said.

He added, "We can't sustain what's going on now in Upstate New York. We cannot sustain the population decline. Nobody moving in. Everybody moving out. Fewer and fewer people paying the cost of a growing government.  We cannot continue the trajectory we've been on."

Friday, May 24, 2013 at 11:07 am

Q&A with Steve Hyde on COR Development incentives

post by Howard B. Owens in batavia, Batavia Towne Center, business, COR Development, GCEDC

Earlier this week, we e-mailed 10 questions to Steve Hyde about the approval of the COR Development Project. Below are the questions and his responses verbatum.

Q. According to the best available information, at the time the GCEDC board passed the resolution finding that COR's project would provide goods and services not readily available, only one of the proposed tenants was known and two others were in negotiations. How can such a finding be made without a certainty as to the exact tenants? What if COR were to change the tenants to include, say, a liquor store and/or a jewelry store (two business categories well represented in Batavia)?

A. We cannot comment on private negotiations between a developer and prospective tenants.  Like every project that is presented to our board, we have to rely on the information provided to us by the applicant which included a confidential disclosure of not only the known Dick’s project but two additional tenants as well. If the tenants that ultimately reach an agreement with the developer fail to fulfill the new criteria as defined by state law, we would ask our legal counsel for an opinion as to whether the applicant is living up to their end of the agreement and initiate appropriate claw backs. We are confident that COR will fulfill their obligations as they are a reputable developer.

Q. GCEDC has asserted that the COR project is bringing in retail with goods and services not readily available in Genesee County, but there's never been any specific information from GCEDC to substantiate this claim. What exactly is it about the known COR tenants that provides goods and services not readily available in Genesee County? Beyond the assertion, what are the facts to back up the assertion?

A. Again, we are relying on information provided by the applicant that the tenants both know and where private negotiations are occurring will provide goods and services that are not readily available in our community. We confident that COR will fulfill their commitments as it pertains to the GCEDC board’s finding which allows for GCEDC participation in the project under the retail exception as a part of the new state law.

Q. Does GCEDC have any obligation to provide mitigation for the tax breaks given to COR to the existing retailers, be they an independent business such as Batavia Marine or long-standing national chains such as Kmart (which also sells sporting goods)?

A. Any business in the community can submit an application for assistance to our agency and if they fulfill criteria such as the creation of new jobs and investment then they may be eligible for assistance. Our goal is to help businesses create jobs and bring new investment to our community and we stand ready to do everything we can to do that. We encourage businesses to learn more about the incentives provided by our agency. Information about these incentives as well as an application for assistance are available on our Web site at www.gcedc.com.

Q. Calculating from COR's own sales tax estimates, their tenants will generate somewhere in the neighborhood of $26 million in annual sales. On what basis are we to believe that Batavia is a marginal market in need of tax incentives in order to attract these retail businesses? The figures appear to be right in line with Dick's per store gross sales average, which means they should be able to project $500,000 in net annual profit. At that kind of return, do these retail stores really need tax breaks in order to come to Batavia? Aren't the things that make Batavia an attractive place to do business -- centrally located in a large rural area, Thruway proximity, promising economic growth -- sufficient for retail without tax breaks, and if it not, what will keep these business in town when the subsidies run out?

A. The fact that we do not have large retailers like Dick’s indicates that Batavia is a marginal market, however as we grow our economy through projects like Alpina and Muller Quaker and longer term STAMP, we will become a destination market. The fact remains, the developer applied for tax relief to conduct an adaptive reuse and expansion of the property at Batavia Towne Center that will create jobs and new investment in our community and just as important the application submitted fulfills the criteria for retail under the new state law.

Q. According to COR, the stores will invest a collective $11 million in opening their stores. If a retail business is willing to make that kind of financial comment to a community, how can we believe that tax incentives are critical to attracting national retail to Batavia?

A. Think about that for a moment. If you had an opportunity to make a $1.8 million investment over 10 years, which is essentially what our incentive package totals, and the return on that investment was $11 million worth of capital investment, who would not make that deal. On top of that, our investment of $1.8 million is going to be returned in the first year alone based on sales tax revenue generation which will benefit our community and help keep property tax rates down.  Without our assistance, there is no $11 million capital investment and no new sales tax revenue for our community thereby creating additional pressure to raise property taxes which hurt residents and businesses.

Q. GCEDC has asserted that it's bad for the community and bad for attracting business to have Lowe's vacant. In the time since it's been vacant, GCEDC has landed two major tenants and is about to land a third for the Genesee Valley Agri-Business Park. What evidence is there that a vacant Lowe's hurts business development?

A. When both Alpina and Muller Quaker were touring the area, the Lowe’s store was in fact still open which showed the companies that we did in fact have a vibrant retail center immediately located off of the I-90. Moreover, we are trying to take a holistic approach to economic development here in our community. You seemingly are taking the view that the Lowe’s vacancy does not “hurt” business development; we take the view, based on our years of experience in the company attraction business, that a vibrant retail center located at the gateway of our community enhances our ability to attract companies to our community in this very competitive world of economic development.

Q. GCEDC has asserted that it's bad to have a vacant Lowe's, but COR has said that it's bad for the rest of Batavia Towne Center to have a vacant Lowe's. Doesn't COR have a strong motivation to lease that space even without tax abatements?

A. I don’t want to single COR out; they are a prominent developer and like many developers they have options and choices as to where to lure their retail clients. Our decision was based on an application that our board believes fulfills the criteria under the new state law specific to retail projects. We believe the return on investment that will be generated through the tax assistance provided will create a vibrant towne center.

Q. What do you say to a comment such as Mike Barrett's, that tax incentives are like "using your own tax money to put yourself out of business"?

A. Alpina and Muller Quaker and the related economic benefits would not have occurred without the incentives being provided through the GCEDC. To the contrary, we are using incentives to create new jobs and new wealth and subsequently new tax revenues to make our community more prosperous and an even better place to work, live and play. I can assure you that Alpina and Muller Quaker are not putting local dairy farmers out of business.

Q. Based on our polls and nearly daily discussions with people in our community, it's difficult to find local residents who support tax breaks going to COR. Is it appropriate for GCEDC to go against the wishes of the vast majority of Genesee County residents on such an important issue?

A. Genesee County has a population of approximately 60,000 residents. A public hearing was held in the evening which was open to the public; about 30 residents attended and six spoke against the project during the hearing. One letter was received at the offices of the GCEDC opposing the project and was officially included in the transcripts of the hearing. The board was provided a written copy of the transcripts from the public hearing prior to voting to approve the adaptive reuse and expansion project at Batavia Towne Center. I think if we were to start relying on polling that admittedly in not statistically accurate and to use that data to make decisions about economic development, you would not see many businesses even contemplating coming to our community.

Q. Will GCEDC continue to have a policy of providing tax breaks to retail projects even though there is a significant body of research that shows tax incentives to retail have no tangible return to local communities and even though the vast majority of Genesee County residents oppose such tax breaks?

A. The GCEDC as a matter of practice does not pursue retail projects. This is evidenced to our not participating in the Tim Horton’s project locating at the west end of Batavia and the McDonald’s project planned for Aldi plaza in the City on the east end. We will continue to comply with state law while advancing our vision and mission to provide a positive place to do business for all companies. There is a significant body of evidence that shows there is a tangible return to local communities. To claim that the “vast majority” of residents oppose such tax breaks is subjective at best without any real statistically accurate information to substantiate such a claim.

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