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It's Your Money: Refundable tax benefit

Posted at: 02/14/2013 8:37 PM
By: Ray Levato

How would you like to pay your property taxes then have the state send you a check giving you that money back? Sounds pretty good right.

News 10NBC has learned that is what's happening with more than 80 companies  in Monroe County.      
     
Business owners are getting reimbursed for the taxes they pay because they're in so called "empire  zones",  a Program that offers tax benefits for companies that are supposed to create jobs. It adds up to about 13 million dollars in our area. Guess who's paying for it, you and me, the taxpayer.

This was part of a state budget long ago and except for lawmakers and the companies involved it's not well known. One viewer says it's like "robbing Peter to pay Paul." News10NBC figured this out while we were following the trail of tax dollars to Medley Centre,  the former Irondequoit mall.

The developer pays his local property taxes to the East Irondequoit School District, the town of Irondequoit and Monroe County.  This year, it was $373.000. Then the state of New York reimburses him for those taxes using your tax money.
   
News10NBC took out a handy little diagram to show people shopping near the mall Thursday.

News10NBC's Ray Levato said, “The owner of the mall pays his taxes, which is represented by this little bag of cash, to the East Irondequoit Schools, the town of Irondequoit and the county, then state taxpayers reimburse him for that tax payment.”

Lynn Stull said, “We own property. We've been paying taxes, and they're giving our money, the state is giving our money to this individual. We're paying for an empty mall, and we shouldn't be doing that.”

Tom Burgess said, “So he doesn't mind that the mall is closed and not making a profit and he's losing. We're the ones who are really losing.”

Except for Sears and Macy's, the mall has been closed since January of 2009.
The current developer announced grand plans for a $250 million makeover to turn the mall into a high-end lifestyle center.  But looking at it, nothing's happened yet. And all through this process, the developer has paid his property taxes and he got that money right back because the mall is in an empire zone.
   
A local lawmaker who voted for the budget that included empire zones is Assemblyman Joe Morelle. He said by phone that the program has been reformed and he understands people's frustrations that the mall owner is getting state tax benefits and local tax breaks.

Joe Morelle(D) Assembly Majority Leader, said, “Clearly we're frustrated with the rate of development. He is given these benefits under law and will receive them, but we've reformed the process. But I think we're all frustrated with the lack of progress on this project.”

The regional president of Empire State Development which oversees the empire zone program was in town Thursday and he admitted this program hasn't been working.

Sam Hoyt, Empire State Development, said, “Empire zones ended up being a failure. I can say this governor doesn't believe in empire zones and wants it performance based which means we're holding those who are getting a benefit accountable for the benefit they're receiving.”

The new program by the way is called excelsior.  Medley Centre owner Bersin Properties has received more than $3 million in state tax benefits since 2004. Those benefits will gradually be reduced to 20% per year until 2017 when they end.

News10NBC focused on the former Irondequoit mall, but there are 85 other companies and we're going to be looking into who else is getting tax breaks.
And if we find a story like Medley Centre, we'll bring it to you.