Buffalo News on IDA Reform: Fishing for Minnows, Ignoring the Whales
by Geoff Kelly - posted 12:56 pm, September 30, 2011
In an editorial published Thursday, the Buffalo News takes to task the Erie County Industrial Development Agency for approving $49,000 in tax breaks for the construction of a Family Dollar store on a Seneca Street site that requires environmental remediation. They are right to do so, and I agree with their objection to the use of tax subsidies to promote retail and restaurant projects:
None of those projects generates new wealth for the region. They just give residents different places to spend their money.
Certainly, $49,000 in tax breaks for developer Dave Pawlik’s $1 million project (hey, remember when he was in charge of Buffalo’s spectacularly unsuccessful, HUD-funded lead abatement program?) or $131,000 in tax breaks for two new restaurants Rocco Termini has planned for Ellicott Street (what wouldn’t you pay for a renovation of the Golden Swan’s restrooms?) are abrogations of the ECIDA’s purpose, which is to support new economic activity and thus create new jobs in the region. But those grants are picayune compared to some ECIDA has made.
For example, a year ago, we reported on ECIDA’s granting of tax breaks worth more than $1 million to WNY Urology Associates, an cancer treatment center headed by Dr. Kent Chevli, who is a personal friend, neighbor, and campaign donor to Erie County Executive Chris Collins. WNY Urology Associates itself has given $11,000 to Collins’s campaign fund, including $5,000 in July 2009, while its application for tax breaks was before ECIDA.
WNY Urology Associates sought this assistance in order to purchase and house a new linear accelerator that will put it in direct competition with Roswell Park Cancer Institute. (Roswell expressed its objections in a letter to the ECIDA.) Simply, ECIDA gave one medical outfit with close ties to Chris Collins—who exercise great influence with the ECIDA, and whose good friend Phil Ackerman is its chair—a grant that will help it to compete with another medical outfit in the same region.
How does do anything but shuffle customers from one existing business to another? How does that shuffling add to the net economic activity and jobs available in the region?
Giving $49,000 to the developer of a Family Dollar is a mistake, but in its editorial opposing that grant, the Buffalo News is fishing for minnows. Giving $1 million to a company fronted by a friend of the county executive is a great, white whale. Someone needs to chuck a harpoon in that thing.