Niagara County IDA approves Amazon tax incentives

Aug. 10—SANBORN — The Niagara County Industrial Development Agency on Wednesday approved a $123 million tax break package for Amazon's planned distribution center in the Town of Niagara.

The agency's board of directors approved the deal by a unanimous vote, with members Maria Lopez and Scott Bridges absent.

While the Amazon project has been criticized by some Town of Niagara residents who are concerned about increased traffic and by several good government groups who question the wisdom of giving tax breaks to one of the wealthiest companies in the world, NCIDA Board Chairman Mark Onesi argued that the project, on balance, will benefit Niagara County.

Onesi said there are a lot of places in Western New York that Amazon could have gone instead and, if that had happened, Niagara County would lose out on the jobs and tax advantages he and other IDA officials believe the project in the Town of Niagara will create.

In defense of the tax breaks for Amazon, Onesi said getting in-lieu-of-tax payments valued at $49 million over a 15-year period is better than collecting $24,000 a year in property taxes currently paid on the undeveloped Lockport Road site.

"What's good for the county may not be good for individuals there, but it's good for the town and county," Onesi said. "Doing business in New York is expensive. A lot of companies won't come without those inducements."

Amazon's tax break agreement includes $94 million of property tax exemption, $26 million of sales tax exemption and $3.55 million of mortgage recording tax exemption.

NCIDA approval represents one of the final pieces needed before construction can begin on a 216-acre facility at 8995 Lockport Road. The project has already been approved by the Town of Niagara Town Board and Planning Board and the Niagara County Planning Board.

The planned first-mile fulfillment center will receive in-bound bulk shipments of products from suppliers and send them on to other facilities within Amazon's logistics network. The estimated development cost is $550 million — $450 million to construct and $100 million to furnish and equip. The expected duration of construction is 18 to 24 months.

Amazon estimated 1,000 jobs are tied to the fulfillment center, 950 of those in warehousing and logistics, paying an average $31,200 per year, and 50 management jobs paying an average $60,000 per year.

NCIDA estimated the project would generate about $1.3 billion in local benefits, mainly for ongoing payroll of $918 million and $260 million in temporary payroll. Agency officials say the project would also result in additional tax revenue of $325 million to the state, $11 million to the county, $3.9 million to the Town of Niagara, and $33.7 million to the local school district.

Similar distributions centers in the Rochester and Syracuse areas resulted in Monroe County's IDA giving $150 million in tax incentives over a 15-year period and the Onondaga County IDA giving $70.8 million over 15 years.

While critics have charged that the $15 per hour that Amazon said most of the center's employees will be paid is not a livable wage, Onesi argued that if the company struggled to find workers, it would be forced to increase the pay rate.

He also noted that NCIDA has the ability to "claw back" incentives for any company that does not meet its job creation goals, including Amazon.

"If they don't reach 1,000 employees in a certain amount of time, we can claw back any incentive they got," Onesi said. "So we have protections against that for what the board does."

Good government groups assailed the tax break package prior to Wednesday's vote. The public subsidy tracking organization Good Jobs First, whose research shows Amazon has received $4.7 billion in public incentives worldwide, ranked Niagara County's tax break deal as the sixth largest the company has ever received.

Greg LeRoy, the executive director for Good Jobs First, said the IDA's study failed to state its underlying assumptions, which are critical to the credibility of any cost-benefit analysis, and it did not name any software products used to derive its estimates.

"There is no indication that the cost-benefit calculator accounts for job destruction in the bricks-and-mortar retail sector caused by the rise of e-commerce/Amazon," LeRoy said. "That job destruction will offset warehouse job gains to an unknown degree. Just because people have another way to shop does not mean they have more money with which to shop."

Two other watchdog groups, Reinvent Albany and the American Economic Liberties Project, noted that research has shown tax breaks are not a significant factor in where Amazon decides to build warehouses.

"Whether on budget or off-budget, any subsidy for an e-commerce vendor is a bad investment of taxpayer dollars," Reinvent Albany policy analyst Tom Speaker wrote in a letter to the NCIDA board.

Henry Krawczyk, a Niagara Falls resident who was in attendance at the board's Wednesday meeting, agreed. He said he's sick of the IDA giving money to businesses and objects to Amazon's practice of barely paying workers above the minimum wage.

"You don't have to be a genius to find out how bad Amazon is, which is rapidly becoming a monopoly," Krawczyk said. "It's rapidly becoming overwhelming for every other retailer."