To Erie County Executive Mark C. Poloncarz, the new Prime Wines store on Maple Road in Amherst is the poster child for a growing list of questionable projects - from stores and restaurants to doughnut shops - that have received tax breaks from "dysfunctional" industrial development agencies in the Buffalo Niagara region.
Poloncarz said the Prime Wines project and others like it don't create new wealth or good-paying jobs in the region. And the tax breaks granted by suburban IDAs take advantage of an unfair system where taxpayers in other communities bear nearly all of the cost of the incentives approved by agencies in which they have no voice, he said.
"The majority of Erie County residents are not seeing the benefits of those transactions. But they're paying for it," Poloncarz said Wednesday during a state legislative hearing in downtown Buffalo's Central Library on the role that IDAs should play in economic development.
They're paying for it because tax breaks granted by local IDAs reduce the tax revenues throughout the region.
But to Assemblywoman Jane L. Corwin, the Dash's supermarket on Main Street in Clarence is the poster child for what's right with the current system that mixes five suburban IDAs with the Erie County IDA and allows municipalities the flexibility to offer tax breaks for projects in targeted neighborhoods or involving the reuse of vacant buildings.
The Dash's supermarket, which received incentives through the Clarence IDA, took a dilapidated building and turned it into the town's only supermarket, creating a hub of economic activity that since has attracted other small businesses nearby.
"Someone in Buffalo may look at that project and say it's not worth it. But someone in Clarence would say it's absolutely worth it," said Corwin, a Clarence Republican.
"That's where I think a local IDA serves a purpose. These IDAs are not reckless. These are people who are out there trying to do good for their community."
The hearing, organized by State Sen. Patrick M. Gallivan, R-Elma, highlighted the wide division in the debate over the role that IDAs play in economic development.
Much of the disagreement centers on adaptive reuse policies that use tax breaks to encourage new uses for long-vacant buildings, even if those uses are for stores, restaurants, medical offices or other retail businesses that ordinarily would not qualify for incentives.
Leading the charge for changes in the way IDAs operate is Assemblyman Sean M. Ryan, D-Buffalo, who has introduced legislation that would prevent suburban IDAs in Erie County from granting incentives that involve tax money that would come from other municipalities and school districts.
According to Ryan's legislation, only projects that go through the Erie County IDA could grant tax breaks on county property taxes, as well as sales and mortgage taxes.
"They can waive tax dollars that are supposed to go to the entire region. There's no check on that," Ryan said.
"This would stop bad projects, like liquor stores and doughnut shops, from being approved because they do not benefit the regional economy."
The Prime Wines project, for example, involved a $246,000 sales tax break, under the incentives approved last year by the Amherst IDA. Yet just $3,089 of that sales tax money came from Amherst. The remaining $243,000 came from sales taxes that were forfeited by other municipalities and school districts in Erie County. "That includes $1,500 from the Town of Tonawanda, where the business was poached from," Poloncarz said.
Other officials defended the suburban IDAs as a valuable tool in economic development tool that lets them focus more closely on their community's needs. "Adaptive reuse and redevelopment is something that IDAs absolutely need to do," especially in areas where there are a large number of vacant buildings, said James J. Allen, executive director of the Amherst IDA.. "As a region, we need to aggressively deal with these issues."
Hamburg Supervisor Steven J. Walters said the Erie County IDA's general reluctance to do adaptive reuse and redevelopment projects, compared with the suburban IDAs, is making the towns served by the ECIDA feel slighted because they are unable to tap into the same type of programs the communities with their own IDAs can offer.
"The biggest complaint right now is adaptive reuse, and the complaints are coming from the communities represented by the ECIDA," he said. "The real focus should be on why isn't the ECIDA trying to help the Town of Cheektowaga fill out its vacancies, or help the Town of Tonawanda fill out its vacancies."
Concord Supervisor Gary A. Eppolito said small communities, especially in the Southtowns, which lack representation on the Erie County IDA board, don't feel they get the attention and understanding they need from the ECIDA. "There are people, I'm sure, in Buffalo who don't know that Springville is part of Erie County," he said.
Assemblyman Dennis H. Gabryszak, D-Cheektowaga, a former Erie County IDA board member, said he supports a proposal backed by the suburban IDAs that would expand their authority to allow them to handle development projects in selected municipalities nearby.
"You have a discrepancy between what some communities and municipalities will do, and what the ECIDA won't do," he said. "I think you need to level the playing field."
Either way, said Micaela Shapiro-Shellaby, an organizer for the Coalition for Economic Justice, the local IDAs are failing to create good-paying jobs and wealth in the region.
"It would be one thing if these subsidies were performing - creating new wealth and economic activity," she said. "But most IDA deals are not growing our economic pie; they are simply reslicing it - granting tax breaks that simply aid one local competitor over another."