Assemblyman Ryan Urging ECIDA to Reject Tax Breaks for Catholic Health Project

New York State Assemblyman Sean Ryan urged the Erie County Industrial Development Agency (ECIDA) to reject tax breaks being sought by the Uniland Development Company for a planned administrative center for Catholic Health downtown.  The six-story 140,000 sq.ft. building is planned for a long-vacant parcel at Genesee and Oak streets.
BTC Block 1/21 Inc., a Uniland affiliate, has applied for tax breaks from the ECIDA for the project. In a letter to ECIDA Chairman of the Board John J. LaFalce, Ryan urged the ECIDA board to reject tax breaks for Uniland when it meets to decide on the matter next Monday. Ryan argued that the project to construct a building for Uniland that will be leased to Catholic Health is already set in stone and a rejection of tax breaks for Uniland will not stop the project from happening. Ryan also argued that the subsidies for Uniland would amount to a tax giveaway to a developer that does nothing to further the Catholic Health project. 
“The new Catholic Health headquarters will be a welcome addition to the downtown gateway to the City of Buffalo,” said Assemblyman Ryan. “Buffalo is fortunate to have a great organization like Catholic Health, bringing needed investment in downtown Buffalo, as well as creating an exciting new medical training program that will benefit all of Western New York. This project is already set in stone and is moving forward. Four million in state funding, secured by my colleague Assemblywoman Crystal Peoples-Stokes will be going to this project, and the ceremonial groundbreaking has already taken place. Why should the taxpayers of Erie County be expected to provide nearly $5 million to subsidize a developer, when the tax subsidies will do nothing to create more jobs or improve the overall project?”
Last October, Catholic Health announced that they would construct a new Administrative and Regional Training Center on a vacant parcel of land located at 144 Genesee Street between Elm and Oak Streets. The new facility will be home to 700 Catholic Health administrative professionals and will include regional training center that will be used by both Catholic Health and the community for healthcare-related training. The new $46 million dollar facility will receive $4 million in state funding administered by the City of Buffalo that was secured by Assemblywoman Crystal Peoples-Stokes. Catholic Health estimates that the new consolidated administrative building will save them over $1 million per year for the next 25 years.
“Uniland will own the building and lease it to Catholic Health for two years, at which time Catholic Health anticipates that it will purchase the building from Uniland,” Ryan added. “Catholic Health is a tax exempt organization. Therefore, when Catholic Health acquires the building they will already have zero tax obligations. Simply put, Catholic Health will see no benefit whatsoever from any potential tax breaks. Uniland has already been selected as the developer and Catholic Health is committed to seeing this project though to the very end, even without tax subsidies for the developer of their building. Giving away tax dollars at this point is completely unnecessary and would only serve to help maximize Uniland’s profits. I am calling on the ECIDA to reject Uniland’s proposal.”
Ryan has called on the IDAs to stop giving away tax subsidies that do little to create the kind of good our entire region needs. Property and sales tax breaks given out by IDA’s in Erie County mean less revenue for every single municipality and school district in Erie County. In addition, tax breaks are often given to businesses that are already planning to expand, as was the case with the Premier Liquor deal in Amherst, and the recent Towne Mini deal in Clarence. IDAs approving tax break deals for donut shops, liquor stores, yoga studios and other retail projects have prompted Ryan to call for reform of the IDA system in Erie County. Ryan has also introduced legislation to reform the way IDAs do business in Erie County, and will continue to push IDA reform in the upcoming legislative session. 
“Our IDAs should use three very important criteria when determining eligibility for tax breaks,” Ryan added. “First, will the project bring jobs in from outside of New York? Second, is the business that would receive the benefit threatening to leave our region? Third, does the project actually fit the standard for adaptive reuse? This Uniland project does not meet all of these criteria, and therefore tax subsidies should not be awarded. While some new jobs will be created, no new jobs are coming into New York State from other areas. Both Uniland and Catholic Health have a strong presence in Western New York and are in no way threatening to leave the area. Finally, this is a new development that does not fit the criteria for adaptive reuse. This proposal from Uniland doesn’t even meet basic eligibility standards and should be rejected by the ECIDA.” 

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24 comments
whatever
whatever

The IDA almost unanimously decided against the viewpoint of Ryan, me, and some others above.

http://www.bizjournals.com/buffalo/news/2013/01/14/ecida-approves-catholic-health-project.html

"... The incentives, which include gap financing for the $46 million project, were ultimately approved by ECIDA directors by a 12-1 count, with only Erie County Executive Mark Poloncarz voting against the package.

... Besides the ECIDA incentives, Brown and Assemblywoman Crystal Peoples-Stokes, D-Buffalo, were able to secure $3.8 million in state aid for the project. ..."

Big surprise, not, lol - corp welfare is very very popular with most of our politicos of both parties. Good for Ryan and Poloncarz for at least sometimes trying to stop it, although those both often favor it too such as for Rich Products.

whatever
whatever

Nope, the business-unfriendly state ranking is a red herring in the question of whether Uniland should be given this IDA handout.

The state's position in those rankings isn't improved at all by highly selective corporate welfare handouts to a very few politically-chosen businesses.

Ironically, if the $ used for these types of special giveaways were instead used to even slightly lower tax rates for all, it might slightly improve NYS in the rankings (although perhaps not noticeably, since regulations & per capita state/local govt spending are what they are here - just the way it goes).

Ryan deserves credit for getting this one totally right in opposing the $ to Uniland, even if he's wrong about some other issues as Perry's later comment notes, and even while he's wrongly supported some other giveaways like the millions in public handouts to Rich Products which coincidentally is in his Assembly district.

Perry
Perry

Assemblyman Ryan is also full of contradictions. He runs around making sure the IDAs are spending their money wisely (which is a good thing), yet he supports union-friendly project labor agreements, which costs Erie County $$$ millions each year and eliminates 75 percent of construction companies from bidding on the jobs.

Perry
Perry

New York State is consistently ranked at/near the bottom in the "least friendly state to do business" polls in business/site selection publications. I have no problem with the IDA throwing money at Uniland.

Old First Ward
Old First Ward

Everyone is blaming Catholic Health. However, they are not the company seeking the tax breaks. Uniland Development is applying for the tax incentives. They are constructing the building and will own it and lease it back to Catholic Health. Then after a couple of years Catholic Health will buy it from Uniland.

Such an arrangement will allow Uniland to embezzle the tax incentives from the ECIDA before the tax-exempt Catholic Health buys it from them. So Uniland gets the $4 million payoff for the heavy lifting and then dumps it to Catholic Health who promptly removes the property from the tax rolls via tax-exempt status. It seems like a three way payola for all involved. The loser is the public, the ultimate funding source of the ECIDA.

WTBasketball
WTBasketball

Saltecks has great commentary; Buf2020 should get someprops.

Whatever hits the nail on the head with his comment. the rest is lame.

JSmith
JSmith

Ideally the zoning code should do that, with no tax breaks involved.

Soccerdude5719
Soccerdude5719

It's a good point. This isn't a vacant lot/parking lot or a building being refurbished or repurposed. So what are bringing to the table that's special beyond a building and tax revenue. We shouldn't poopoo development but say to them were gonna need something a little extra.

whatever
whatever

I agree too, and it will be interesting to see if Ryan also speaks out against the concept of any residential projects (regardless of location) receiving "industrial" development agency handouts as sometimes happens.

Rcc
Rcc

Please no more cookie cuter buildings , why must every new build look the same .

LancasterPat
LancasterPat

Actually Mr Fudoli in Lancaster is going to great lengths to reform the town IDA and is only supporting projects that bring added value and create jobs that wouldn't otherwise be here in the area, or would possibly leave without the IDA credit.

paulsobo
paulsobo

How utterly niaive....you think there aren't health insurance, banking, finance, cable and other that can't or don't already centralize in another city and service Buffalo.

Your not talking doctors or surgeons...those have to be with the people. Catholic Health is about data and management and insurance...they most certainly can merge and consolidate.

You know a law...even if there is one ....through enough money at a politician....and they will change it.

Buff2020
Buff2020

Ryan gets a "10" on the pandering demagoguery scale.

saltecks
saltecks

Was this the same poker hand that was played when Downtown Buffalo lost National Fuel to Amherst? First Ryan should work harder on consolidating the IDA's, and when he gets that done then the problem will resolve itself. Until then, should Buffalo continue to be the Guinea Pig? What happens to lab rats in the end?

300miles
300miles

How about using the tax breaks to force a better site plan from them.

No_Illusions
No_Illusions

Yeah, because if Catholic health moved all of their hospitals to Rochester, which is already saturated with hospitals, I'm sure people will travel an hour every time they want a check up.

This is a medical company, they need to be where the population is. Now if they were a manufacturing plant I would agree with you, but Catholic Health has no reason to move to Rochester.

No_Illusions
No_Illusions

As far as I am concerned the land is currently not generating tax revenue. If Catholic Health moves to another location then they are not going to get any tax dollars at all.

So if Catholic Health goes through with the plan, its a huge victory. But if they decide to build elsewhere it will be an even greater defeat.

I just hope Sean is a good enough poker player, to know for sure that Catholic Health will fold.

Chris
Chris

Are you going to make a stand on principle or just play the game and bring more traffic and people to downtown. This is the game that municipalities play.

Hopefully the state and county and city will use this ploy to attract someone to the HSBC building. Chicago had a similar problem with the Sears tower just a few years ago. Cities signature tower mostly vacated. They leveraged the merger between Continental and United Airlines to fill the tower back up. Chicago blew away the execs with an offer so early that Houston almost didn't even have a chance to match.

It isn't pretty but it is the cost of doing business today.

Buffaloian
Buffaloian

You cannot blame these companies for going for the free money handouts. They would be foolish not too. Government organizations no matter who they are need to start putting their foot down. Well done Sean Ryan.

paulsobo
paulsobo

Unless everyone plays by the same rules...this is unrealistic pontification.

Rejecting the subsidies will do nothing to stop the suburbs from offering them or our neighboring city Rochester from offering them or our neighboring saw Pa.

JSmith
JSmith

Right on. I'm not even sure why the state is spending $4 million on a private project like this.

Rand503
Rand503

"But... but.... everyone else gets these IDA tax breaks! Why can't we?"

Travelrrr
Travelrrr

Good for Ryan--he's dead on about this. We can't bitch about the inappropriateness of Premier Liquors getting poached by the Amherst IDA, and then look the other way in regards to Catholic Health, just because it is moving downtown (which is a great thing).

Get rid of the self-dealing subsidies and let's start thinking as a region.

LouisTully
LouisTully

Meanwhile, Amherst, Lancaster, and Orchard Park IDA's all say "here, have some money".

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