In a Buffalo News report Friday State Sen. Sean Ryan and Assemblyman Jon Rivera on Friday denounced tax breaks recently awarded to a pair of restaurants in Niagara Falls, calling on the Niagara County Industrial Development Agency to reverse course. The Democratic state Legislators also urged passage of legislation to close what they called a loophole in state law that allows retail projects to benefit from incentives meant to bolster tourism and distressed areas.

The lawmakers said in a statement they want to rein in IDAs that exercise broad discretion to waive taxes for businesses that don't need it, which results in "wasteful subsidies for projects that do not provide adequate benefits to the region."

"We need to stop IDAs from granting subsidies for projects that won’t benefit anyone except the developers and the IDAs themselves," Ryan said. "This is an egregious waste of taxpayer dollars. The incentives also impact the competitive landscape, harming other businesses that don't get the same benefits, the legislators said. “We’re putting existing business at a deep disadvantage," Rivera said. "There are restaurants within probably walking distance of that location that have been trying to grow and expand and find success. They’re owned by local people, people who have called Niagara Falls home for all their lives."

Critics like Ryan say they are just an example of corporate welfare – giveaways to businesses that don't need them. And they say the incentives don't necessarily pay off in job creation, while taking away tax revenues from towns and school districts. The senator noted that the state's only data regarding job creation and economic benefits comes from the IDAs themselves, often without any outside evidence to justify it.

More recently, attention has focused on alleged IDA abuses, especially around support for retail, restaurant and housing projects. "If we’re looking to bring in jobs, bring in a better future for our region, it’s not going to be by luring chain restaurants with low-wage jobs to distressed neighborhoods," Rivera said.

In 2013, the state banned subsidies for retail projects – such as restaurants – but made exceptions for "tourism destination projects" or those located in "highly distressed areas." Market-rate apartments are also excluded, but there are also exceptions for adaptive reuse of older buildings that are vacant or underused, as well as to encourage senior housing.

Shoaib (project sponsor) admitted he would proceed regardless of whether he received tax breaks. "You have a business owner saying I don’t even need this money," Ryan said. "It just makes it more egregious." "We all know what these IDA exemptions are supposed to be used for, but in this case NCIDA is seeking an end-around," Ryan said. "They're seeking ways to give away public money."


Lancaster IDA

In similar fashion the Lancaster Industrial Development Agency’s (LIDA) mission in the past year has been to rewrite policies and processes that ensure that inducements (exemptions / tax breaks / enticements) promote economic growth and development in Lancaster by assisting qualified private sector industries and businesses – not for businesses or projects that are financially sustainable by the applicant and end up ‘giving away public money' - corporate welfare.

In their attempt to discontinue IDA handouts for projects over the years that did not meet the criteria established to warrant public assistance, the LIDA has been charged with being anti-development - even by individuals who served on previous LIDA boards and assisted in distribution of public funding for undeserving projects.

It’s about time someone is looking out for the town taxpayers’ best interests.