A report released this week by the labor-backed ALIGN says that industrial development agencies in New York aren't the job-creators they're supposed to be. ALIGN says that in the Finger Lakes Region, 52 percent of IDA projects failed to produce jobs. Even worse, Central New York IDAs failed 85 percent of the time.
In light of this report, its important that requests for tax breaks are scrutinized not only for their potential to do what they promise but for their potential to fail, as well, something the Cayuga Economic Development Agency needs to take seriously as the local economic development landscape changes.
Locally, CEDA has taken over administrative duties for the Cayuga County Industrial Development Authority and is nearing an agreement to do the same for the Auburn Industrial Development Agency, finally establishing a "one-stop" for city and county economic development.
Cayuga County's creation of a one-stop office is a good move, and we hope the agency comes up with a more streamlined process for offering tax breaks to developers. Rather than having builders come in asking for the sky, knowing that they'd be happy to take less, CEDA needs to work with the IDA boards to develop a menu, of sorts, to let developers know what they can expect and how much is too much too ask.
The end result of the Plaza of the Arts project under construction on Genesee Street in downtown Auburn is a good example. The 20,000-square-foot mixed-use facility will cost about $3 million to build and has been projected to eventually generate about $160,000 in annual sales taxes for the city and create more than 100 jobs, so the investment looks like a good one for AIDA.
But what if Plaza for the Arts falls short on its promises? In this case, AIDA included several clawback provisions, requiring the retention of at least 70 employees in the first five years and 90 percent occupancy of rental space. If the projections fall short, the developer is responsible for paying back some of the tax breaks.
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