The Medley Centre project in Irondequoit isn’t held in high esteem by the public. Neither were the state’s Empire Zones — businesses in these designated areas were entitled to tax incentives. Even state officials agreed the zones were so flawed the whole system had to be junked.
But combined, Medley and the zone program make for one glorious display of New York’s often ironic economic development system.
Medley Centre was designated an Empire Zone in 2004 when it was purchased by Bersin Properties LLC. It remained an Empire Zone when developer Scott Congel bought the mall and its parent company — Bersin — a few years later.
From 2004 to 2011, Bersin Properties LLC received $3.3 million in property tax credits, which it used to reduce its state tax bill. The company received credits of $493,427 for 2011, $322,813 for 2010, and $616,966 for 2009, according to state records.
Bersin Properties will keep getting the credit through 2017, though the amounts will get progressively smaller after 2013, says Laura Magee, a regional spokesperson for Empire State Development, the state’s economic development arm. The credits are determined by a formula written into state tax law.
The credits have been large enough to offset Bersin Properties’ obligations under a local payment-in-lieu-of-taxes agreement.
Basically, Medley’s developer, Congel, is making regular, annual payments under the PILOT agreement and then, in a way, getting reimbursed via state tax credits.
In an e-mail, Magee wrote that the state let the Empire Zone expire in 2010 “because there were inefficiencies, a lack of accountability, and it did not yield as much private investment and job creation as it should have.”
This article appears in Jun 26 – Jul 2, 2013.
Utterly disgusting… Corporate welfare at it’s finest.
This is the ugly result when governments start picking winners, and gimmicks like Empire Zones and “START-UP NY” are put into law instead of simply lowering taxes across the board and allowing the free market to work. I think David Cay Johnston might have something to say about this…
Has anyone thought about putting Irondequoit Mall on pontoons and using it to bring in tourists from Canada?
Thanks for following up on this, Mr. Moule. It’s a terrible shame that Empire State Development has apparently decided to just run out the clock on the benefits, rather than claw them back. I’m pretty sure the EZ law, flawed as it was, permits removing businesses from the program. Shocking, really, that they are willing to allow maybe millions more in refunds to flow to this developer.
I will quibble with your phrasing that the developer is getting reimbursed “in a way.” It’s really more direct than that — on the annual reports the company files, property taxes and PILOT payments are a category of reimbursable expense from the EZ program. There is no doubt that NYS is refunding these payments explicitly.
@J, totally with you on StartUp NY. Why the governor thinks it is revolutionary to basically resurrect the EZ program is beyond me. I wonder what tax free moochers we will be outraged about in 10 years?