Kay Jewelers planning location in tax-subsidized shopping center
Despite the presence of two long-established local jewelry stores, national retail chain Kay Jewelers is planning a new store in Batavia Towne Center.
Syracuse-based COR Development has received $6 million is tax abatements -- to help finance the construction of the strip mall in 2006, and then remodel a portion of it in 2013.
Tax abatements for retail developments, which are authorized by Genesee County Economic Development Center, are controversial in New York and have been criticized by both Comptroller Thomas Dinapoli and Sean Ryan, a member of the Assembly representing Buffalo.
When COR sought its second round of tax abatements in 2013, the anticipated retailers going into the area once occupied by Lowe's were Dick's, Marshall's and Kohl's, though DIck's seemed to be the only sure thing at the time.
The GCEDC Board approved the $1.7 million in abatements with a finding that the tax relief would help bring new business to Batavia that would provide goods and services that are not readily available to local residents from current retailers.
It's important to note, that the proposed location for Kay's -- sandwiched between the AT&T Store and Sally's Beauty Supply -- is not part of that 2013 expansion and is not covered by the second around of abatements, though it is covered by the 2006 round of $4.3 million.
We've contacted a representative of COR Development for comment and have not received a response.
Lease agreements are not public record, so we don't know whether Kay Jewelers is receiving a discounted rent bolstered by the tax breaks.
Officials at GCEDC were unaware of COR's intention to lease space to Kay and have not offered a comment on the plans.
Batavia is served by two locally owned jewelry stores: Valle's, on Jackson Street, and Lambert's, on West Main Street.
Jim Lambert said he's heard rumors for months that Kay was planning to open in Batavia and was disappointed to learn the new shop would be in a tax-subsidized development.
"Nobody gave me any tax breaks to open my business," Lambert said. "Everything we do, we do on our own. We don't get anything."
Kay Jewelers, with an advertising budget that includes radio, TV and glossy national magazines, plus the ability to heavily discount, absorb losses and give credit to high-risk borrowers will provide the local shops with formidable competition, Lambert said.
"For a place like us or Valle's, you just can't compete with their budgets for advertising and so forth," Lambert said.
He said he finds it interesting that Kay would open in Batavia, with a population of less than 25,000, when the chain is closing stores elsewhere.
"I'd be surprised if they could do $1 million here," he said.
It's not like they don't have several other stores in Western New York already, he said.
"Personally, I didn't think it would actually happen," Lambert said. "I thought Kay's would be smarter than invest all that money in Batavia, but they afford to lose money for years and use it as a tax write-off. I can't afford to lose money."
The owners of Valle's wanted to get more information on the issue before commenting.
Besides Valle's and Lambert's, Kay will be competing with JC Penney and Walmart. Lambert noted that Walmart is already the largest seller of jewelry in the nation.
How much more can the market be divided and everybody still stay in business? Lambert wondered. Given the revenue demands of the chain, he said he will be surprised if Kay lasts in Batavia through two Christmas seasons, but in the meantime, the local businesses could be hurt substantially.
