The Erie County Industrial Development Agency, bowing to the ongoing controversy over tax breaks to stores, restaurants and other retail projects, took the first step Monday to a launch a county-wide review of the policies that determine whether redevelopment projects merit taxpayer incentives.
The IDA directed the agency’s policy committee, which includes representatives of the county’s suburban IDAs, to begin a review of its policies on tax breaks for projects located in targeted “enhancement zones” or redevelopment proposals that involve new uses for existing buildings, often ones that have been vacant for years.
The review, approved by a unanimous vote, is in response to the controversy generated by tax breaks, sometimes worth hundreds of thousands of dollars, that have been granted in recent years, from the Prime Wines liquor store in Amherst to urgent care facilities and doughnut shops.
“We’re essentially saying give us six months because this is something that’s going to require a lot of actions and reactions and conversations,” said Andrew J. Rudnick, an IDA board member and the chairman of the agency’s policy committee. “Our goal, in conjunction with the town IDAs, is to develop a consistent policy.”
John J. LaFalce, the IDA’s chairman, said the Erie County IDA could adopt changes to the redevelopment policy unilaterally, although he hopes that the review process will yield changes that are acceptable to the county’s five suburban IDAs, which have been more aggressive in granting tax breaks for retail projects through the redevelopment policy.
“My desire is to do this as part of a process with the other IDAs,” he said.
The current policy followed by all of the county’s IDAs prohibits tax breaks for retail projects, except when they are part of an adaptive-reuse project that would breathe new life into a long-vacant building, or if they are located within an enhancement zone that has been designated by a municipality as being in particular need of investment.
But the interpretation of that policy has varied widely. The suburban IDAs, which view the redevelopment projects as a valuable tool for revitalizing their Main Streets and other important commercial strips, generally have been more willing to offer tax breaks for retail projects. The Erie County IDA, while backing a number of redevelopment projects of its own, including a pair of Dollar General stores in Buffalo, has been more reluctant to provide incentives for retail projects under the guise of redevelopment.
LaFalce said the idea behind the review is not to come up with a new policy, but rather to make changes to the existing one.
“We don’t really want to come up with a new world,” he said. “We’re talking about reevaluating what we have and coming up with some revisions.”
One potential sticking point could be defining what qualifies as an enhancement zone, where tax breaks could be handed out more liberally. Amherst, for instance, has several enhancement zones, covering wide areas along the affluent suburb’s main commercial strips. Other towns don’t have any designated enhancement zones.
Those enhancement zones “must be appropriately targeted,” LaFalce said. “You can’t – maybe with the exception of the City of Buffalo – call an entire community an enhancement area.”