I-Team 10 puts COMIDA under the microscope

Posted at: 05/01/2013 3:42 PM
Updated at: 05/01/2013 11:50 PM
By: Berkeley Brean

What would you do in this situation? Give up a thousand dollars with the hope that it'll make you five times that amount in a decade? Or keep that money and use it to pay your bills now?

That's the kind of decision that COMIDA -- the county's industrial development agency -- makes every month. Only it's dealing with millions of your tax dollars. COMIDA gives businesses tax breaks to entice them to either keep their jobs in or bring their jobs to Monroe County.

The reason we think you should see some of the COMIDA projects is because COMIDA says the group that polices its power is -- the taxpayer.

Not the County Executive.

Not the County Legislature.


So now that you've worked all day and looked after your family ask yourself -- would you sign off on these deals?

How about the Wegmans culinary center? A $22 million project and 24 new jobs. The tax break for Wegmans? $500,000.

"They could have located that culinary center any place," Democratic County Legislator Paul Haney said. "And that to me is a good use of tax exemptions."

But Haney pointed to what he called bad exemptions. Eastside Medical Urgent Care for instance. It got tax breaks to expand the building in Penfield and hire 12 people.

"They were given a net exemption of $18,000," Haney said. "If they has not gotten that exemption, I'm willing to bet lunch for a week that they still would have opened that urgent care center."

(Eastside Medical Urgent Care was contacted for this story but declined to comment.)

Or how about the case of VWR -- Ward's Natural Science?

"At the time I gave the presentation at Monroe County I said they gamed the system," Richard Lipsitz said. Lipsitz is a board member of COMIDA's equivalent in Erie County.

Here's what he claims.

Four years ago -- COMIDA gave VWR tax breaks to expand its building in Henrietta and hire at least seven people. But not long after that Lipsitz says VWR shut down most of its business in Erie County after its tax deal with Erie County expired. He says VWR moved most of its business to Monroe County -- where it was still getting tax breaks.

"So essentially they never had to pay taxes for, right now looks to be about 30, 35 years," Lipsitz said.

  Lipsitz came to Rochester and asked the COMIDA board to cancel its tax deal with vwr saying -- again -- the company gamed the system.

"His interpretation," COMIDA Executive Director Judy Seil said.
"You don't buy that?" I asked.
"No, I don't buy that and neither did the state."

The state investigated VWR and COMIDA to see if COMIDA's tax deal somehow encouraged VWR to close shop in Buffalo and move everything here.

"You might not take our word for it but we had the Authority Budget Office come in and said nothing wrong was done. The two projects were not related," Seil said.

In a statement, VWR says, "To set the record straight, headcount was not transferred from Tonawanda to Henrietta.   The work completed by our warehouse associates in Tonawanda was absorbed by our current employees in Henrietta without adding any headcount in the Henrietta location.

The decision to close our Tonawanda warehouse operations had nothing to do with incentives -  it had everything to do with a challenging business environment in which sales dropped dramatically over the last few years.  Our industry is struggling right now. Unfortunately, we had to make the difficult decision to reduce staff and consolidate operations.

It's important to point out that Ward's Natural Science, a VWR brand, provides supplies and services to schools to support science education with emphasis on the K-12 market.  With many states in budget deficit positions, school budgets have been compressed, and accordingly, there has been a significant decline in our business. By optimizing our warehouse space in Henrietta we were able to streamline our processes to stay competitive in our industry."

That's still not how Richard Lipsitz sees it.

"The argument obviously is that if they did it to us what would prevent them from doing it to you," he posed.

"So you don't have any concern that when this company or any company's incentive program ends that they would just pick up and move down the thruway?" I asked Judy Seil.
"We have many projects that have ended and companies have stayed here and they stayed here as a result of getting incentives," she said. "That's what caused them to stay here and grow here."

Here are the facts that COMIDA puts out.

Since 2004 they've approved 1,100 projects, investing almost $4 billion into the market, creating 16,000 jobs and retaining 75,000 jobs.

In 2010 alone, COMIDA approved 33 projects resulting in more than $12 million in tax breaks over a decade but creating or maintaining an 5,560 jobs in the county.