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Thread: Lancaster IDA aids company coming to Depew

  1. #1
    Member gorja's Avatar
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    Lancaster IDA aids company coming to Depew

    In the article in today's Buffalo News, it stated that Xpedx is moving from Cheektowaga to Depew
    and the LIDA is giving them tax breaks which include $246,072 in property tax exemptions,
    $30,744 in sales tax exemptions and $4,390 in mortgage recording tax exemptions.

    It was also stated that Uniland previously had a PILOT on the building which expired in 2009.
    Looking at this year's 2012 school tax bill the property's bill was $0.00 with an Ind dev exemption of $3,794,000 and the 2012
    County/town tax bill had an exemption of $4,134,000 whiich was $340,000 greater than the full
    market value according to http://www.tslco.net/lancaster.htm

    If the PILOT expired in 2009, why are there still exemptions through 2012?

    For more of the story- LancasterIDA aids company moving to Depew from Cheektowaga

    Georgia L Schlager

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    Tony Fracasso - Admin
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    The IDA's have to go away. All they are doing is masking and enabling the issues we have caused by over spending of our local/county/state governments.

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    Quote Originally Posted by gorja View Post
    In the article in today's Buffalo News, it stated that Xpedx is moving from Cheektowaga to Depew
    and the LIDA is giving them tax breaks which include $246,072 in property tax exemptions,
    $30,744 in sales tax exemptions and $4,390 in mortgage recording tax exemptions.

    It was also stated that Uniland previously had a PILOT on the building which expired in 2009.
    Looking at this year's 2012 school tax bill the property's bill was $0.00 with an Ind dev exemption of $3,794,000 and the 2012
    County/town tax bill had an exemption of $4,134,000 whiich was $340,000 greater than the full
    market value according to http://www.tslco.net/lancaster.htm

    If the PILOT expired in 2009, why are there still exemptions through 2012?

    For more of the story- LancasterIDA aids company moving to Depew from Cheektowaga
    Another great find gorja, interestingly what tended to happen with the previous administration, oversight was their weak point. This should be brought to the new administrations attention because I am sure that was purely an oversight. With the new direction the LIDA is going in, these are just one of the changes the Supervisor has made bringing transparency to the table.

    I am curious though as to why Uniland has obtained so much assistance? How will this continued incentives impact the new business relocation (Xpedix)? I hope no poaching has taken place, it clearly indicated they needed space to accommodate their needs. I am excited that a new company is relocating in our town bringing in revenue.

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    Tony Fracasso - Admin
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    "We support those who support us" which is basically.. those who give us money to run for office....

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    Member gorja's Avatar
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    Quote Originally Posted by WNYresident View Post
    "We support those who support us" which is basically.. those who give us money to run for office....
    Is that one of those -Famous quotes from the last administration?

    Georgia L Schlager

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    Tony Fracasso - Admin
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    Quote Originally Posted by gorja View Post
    Is that one of those -Famous quotes from the last administration?
    I don't know... I do know I do not like IDA's because they mask/enable the issues everyone faces in our community.



    In the article in today's Buffalo News, it stated that Xpedx is moving from Cheektowaga to Depew
    and the LIDA is giving them tax breaks which include $246,072 in property tax exemptions,
    $30,744 in sales tax exemptions and $4,390 in mortgage recording tax exemptions.
    The property tax exemption need to stop. The one shot exemptions are ok because they would have never happened anyways.

    So here something to ponder.

    How much a year did our local IDA's give away in "property/school taxes". If those amounts were not given away how much more would our communities have towards our budgets.

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    Member gorja's Avatar
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    Quote Originally Posted by WNYresident View Post
    I don't know... I do know I do not like IDA's because they mask/enable the issues everyone faces in our community.





    The property tax exemption need to stop. The one shot exemptions are ok because they would have never happened anyways.

    So here something to ponder.

    How much a year did our local IDA's give away in "property/school taxes". If those amounts were not given away how much more would our communities have towards our budgets.
    There are 87 IDA exemptions in Lancaster with a total property value of $192,207,000 in which 6.04% is exempted.
    They pay $642,412.68 in PILOTs

    Georgia L Schlager

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    Tony Fracasso - Admin
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    Quote Originally Posted by gorja View Post
    There are 87 IDA exemptions in Lancaster with a total property value of $192,207,000 in which 6.04% is exempted.
    They pay $642,412.68 in PILOTs
    PILOTS = Payments in.... ?

    What should $192,207,000 have truly paid in taxes?

  9. #9
    Member gorja's Avatar
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    Quote Originally Posted by WNYresident View Post
    PILOTS = Payments in.... ?

    What should $192,207,000 have truly paid in taxes?
    I don't really know. I think every property owner has to pay the sewer taxes, but not sure.
    The tax rate for 2013 is $7.89 per thousand plus $156.65 for garbage and consolidated water.
    The Lancaster school tax rate is $16.047716 per thousand
    This property was in the Depew school district which the tax rate is $20.657768 per thousand.
    Their true school tax bill should have been $78,375.57 instead of the $0.00 tax bill shown on the Lancaster tax site.

    Georgia L Schlager

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    Quote Originally Posted by WNYresident View Post
    PILOTS = Payments in.... ?

    What should $192,207,000 have truly paid in taxes?

    Payment in Lieu of Taxes

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    Tony Fracasso - Admin
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    Quote Originally Posted by Dan Roman View Post
    Payment in Lieu of Taxes
    But the lieu in taxes doesn't equal the full amount in taxes, correct?

    If someone gives away $1,000,000 of property tax incentives the town is not receiving the property/school tax of that $1,000,000's worth of property, correct?

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    Quote Originally Posted by WNYresident View Post
    But the lieu in taxes doesn't equal the full amount in taxes, correct?

    If someone gives away $1,000,000 of property tax incentives the town is not receiving the property/school tax of that $1,000,000's worth of property, correct?
    Correct! Usually a portion of what would have been paid.

    About a year ago I was returning from traveling out west and sat next to a businessman from O.P He owns a manufacturing facility here and went to Arizona to scope out sights for a new plant to handle west coast growth. Said he sat down for a few meetings with the local business groups and municipalities. I asked him about IDA's and tax relief and was told they don't use those gimmicks, their taxes are low enough/competitive that tricks like that aren't needed and that keeps costs down by not having x amount of IDA's per county luring businesses from one town to another. Go figure.

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    Tony Fracasso - Admin
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    So basically the IDA's are lowering our tax revenue stream in each community they operate in. While taking a cut for themselves on each deal. Then we have the small connected group of "lawyers" that bill out to do the paper work of the deals and real estate transactions... Right?

    I don't like the amount of property taxes we pay compared to other communities but we shouldn't have a group picking who pays less. We all pay the same..

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    http://www.buffalonews.com/apps/pbcs...121219863/1149

    To add to the Buffalo News report, at the public hearing session where the public is allowed to speak on the resolution, Dan Beutler stated that although he favored the IDA grant what bothered him was that Uniland had receive done one years ago and should not be getting another on what he considered a ”spec.” building.

    Peter Sayadoff, director of Uniland’s capital markets group, replied that the building was constructed on behalf of a tenant. Construction began in 1999 but the tenant, Skulogix Inc., vacated the building in 2006 and they went belly-up about a year into the lease. “The building has sat vacant for 6 years. The tax breaks will be passed on to the Lessee.”

    Resident Lee Chowaniec addressed the board stating that he had a few questions to better understand the LIDA process and what was taking place with this particular LIDA project.

    Chowaniec: In Section 2 of the resolution it states that the maximum cost to the Lessee was not to exceed $1.3 million which project will be financed through refinance an existing LIDA bond of approximately $2.45 million via a bond or a lease with mortgage or lease only transaction between the Agency and the Lessee for a total Project cost of approximately $4.39 million. Is this loan going to be combined by with outstanding previous loan?

    LIDA Chair Dino Fudoli: The loans will be combined into one.

    Chowaniec: But the IDA will be for five years and based only on the $1.14 million loan?

    Fudoli: Correct.

    Looking at Section 5 it reads that approximately 122,000 square feet of building will be renovated at 3344 Walden Avenue. Are we talking about two buildings or the one building that sets in the background of the complex (north)?

    Consultant Paul Leone: Just the one building.

    Chowaniec: And right now there is no occupant?

    Leone: No.

    Chowaniec: And they are looking to renovate the office as well as the warehouse in the 1220,000 square foot building?

    Leone: That is correct. The total renovation cost will be for $702,732 and where they will receive a sales tax emption on this ($30,744).

    Chowaniec: Please look to the last page of your brief that summaries your impact analysis Applicant Benefits and Community Benefits. Over the next five years the Uniland/Xpedx partnership will receive a total benefit of $281,206; $246,072 from property tax exemptions, $30,744 from sales tax exemption and $4,300 from the Mortgage Recording exemption.

    In the next column it lists a total community benefit of $2,821,964; $469,000 in revenue from added jobs; $6,764 in sales tax from the added jobs; $8,316 in property taxes; $1.45 million in community positive impact (Restaurants, retail stores, entertainment, etc.); $885,125 from other new annual job creation. Is the projected $2.82 million in community benefit over a five year period as well?

    Leone: Yes, sir.

    Chowaniec: If we where to compare the $281,206 in applicant IDA benefits to the declared project total costs of $1.15 million, taxpayer money will be footing over 24% of the project. I am looking here at two financial Titans; both have more than adequate cash flow. Although I understand the benefit of this project wholeheartedly, am a supporter of an IDA program that brings industryand good paying jobs into the community, the benefits sought here and that will be distributed by the LIDA is much too generous.

    Other

    The LIDA immediately approved the resolution by a 6-0 vote.

    Later in the meeting the discussion turned to where the LIDA direction would be focused in the future. The ECIDA Board Policy Committee reported in October on its discussions about formula of a Redevelopment Policy including reevaluation, study, and, as deemed necessary, developing possible amendments or revisions of the Neighborhood Enhancement Policy and the Adaptive Reuse Policy. The five Towns having their own local IDAS have been encouraged to join along.

    Fudoli announced that Harper Industrial is moving into the Village of Depew on the Cheektowaga side and that opened the door for Lancaster to get the Uniland project – considered a win-win for both sides. “They (Cheektowaga) put their blessing on the exchange. Neither side wanted to see industry leave Western New York. We are working together with the neighboring town (Cheektowaga). These are the type of relationships that should be worked on. The Gabryczak legislation addresses that, the Ryan legislation does not. Ryan would like to consolidate all IDA into one, taking away our voice.”

    It was reported that someone bought the former Arcadia Graphic’s Company and are in the process of subdividing it. The building is about 850,000 square feet in area.

    Leone added that the cooperation between the two towns is 100% to make the two projects happen.

    Board member and Depew Mayor Steve Hoffman spoke to inform Depew resident Dan Beutler that the Village of Depew has been hounding state officials to fix Transit Road. “They fixed north Depew and south Depew, two/three times over. Anyone that has driven Transit Road in the Walden Avenue vicinity knows of the traffic issues you refer to – not being able to access Walden Avenue from your street. It’s a roadblock in this area. Trying to move an improvement project along here is very difficult.”

    Leone then addressed Chowaniec and spoke on meeting with Uniland and then having to determine the negative and positive aspects of granting the IDA.

    Chowaniec: I understand the benefits and virtue of this IDA. My questions/comments were made with the intent of learning the process. When you look at the loan now coming in at over $4 million, and when you look at the benefits they are going to receive, is this based on the residual of the past IDA. In other words, an IDA was granted when the building was first constructed, correct?

    Leone: There was and the business that moved in went out of business within 12 months; perhaps less than that. So, this building has been vacant and the original PILOT ended in 2009. A lot of IDA’S are doing adaptive reuse of buildings. When they came to us I said, okay we have a vacant building here in Lancaster. This company is now going form a 48,000 square foot building in Cheektowaga to a 122,000 square foot building in size and bringing in 14 new full time jobs. We will give you a new PILOT, but it will be for five years and starting at 50%.

    Chowaniec: So I am wrong in looking at this PILOT for being on the total $4 million loan, but rather on the $1.15 million renovation project.

    Leone: That is correct that they do not get any consideration on the outstanding $2.45 million debt. The IDA is strictly for the $1.15 new renovation costs. The LIDA will also only be receiving the 1% fee based on the new application, not the $4 million total debt.

    Chowaniec: Chair Fudoli knows very well that I am supportive of the IDA program to bring in industry and good full time paying jobs. Very few people come to these meetings and understand the process. That is why I have been attending these meetings this year because the process is more open and transparent than in the past. The first thing people say to me when I say I support the program is that taxpayer money should never be used for supporting private industry. It is corporate welfare. I am here to learn the process and pass on whatever information I can garner because there is a misconception regarding the mission and working of the LIDA; any IDA.

    Fudoli: We appreciate your saying that because some of the writing out there is flat outright lying about what benefits were, why PILOTS were given, etc. I know that’s a strong statement but the bottom line is that most people don’t know how and why PILOTS work and their benefits. All they see and think is the tax breaks the applicants are receiving. I didn’t fully understand the process when I first took office. I appreciate you coming to the meeting and asking the questions that will help disseminate accurate information that will help them understand the process and the benefits to the community and region. When people understand the facts it helps them look at them in a positive light and set aside the misinformation. There is always some kind of value added with an IDA.

    Mayor Hoffman: The Village Board did not understand the process as well; nor the value of doing the two projects we have been discussing. We brought Uniland in and Paul Leone as well and spent two hours walking them through this, step by step, until they understood and bought into it.

    Chowaniec: The simple question I asked on whether the listed benefit to the community of $2.5 million was for one year or five years points out how easily information can be misinterpreted and cause controversy. It is simple little things like that that can lead to controversy and misunderstanding.

    Leone: And we don’t get involved enough in getting that out there.

    Chowaniec: There hadn’t been enough information out there in the past, but there is now. Thanks to Chair Fudoli the entire agenda, with resolutions, public hearings, etc. are now on the updated LIDA website for all to see and review. It is unfortunate that not many examine the website, learn the process and what’s taking place, and attend the LIDA meetings and contribute to the process.

    The board then discussed the sale of the Colecraft Building, having it put back on the tax rolls and only providing a mortgage recording tax incentive. “It will be a lengthy process but beneficial to the town in many ways,” declared Chair Fudoli.

    Leone: I would like to add that come next year what this board would like to do is to meet with the Chamber of Commerce and hold a seminar for all the businesses in Lancaster to tell everyone what we do and how we do it.

    Comment

    While thank the LIDA for answering my questions and providing other information on the process, I still contend that the amount of incentives given to the applicant here were too generous; too generous for the successful entities involved, despite the community benefits forecasted into the future.

    I will continue to see the value of the IDA program and the development benefits it provides. That does not preclude me from not supporting all IDA’S or questioning/challenging those that are overly generous and in my mind not in the best interests of the community.

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    Tony Fracasso - Admin
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    Peter Sayadoff, director of Uniland’s capital markets group, replied that the building was constructed on behalf of a tenant. Construction began in 1999 but the tenant, Skulogix Inc., vacated the building in 2006 and they went belly-up about a year into the lease. “The building has sat vacant for 6 years. The tax breaks will be passed on to the Lessee.”
    WHy? We have ever increasing labor contracts that need revenue to cover the costs.

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