The state Comptroller’s Office criticized the Schenectady County Industrial Development Agency for its lax monitoring of job creation and PILOT payments, in an audit out today. The state reviewed the IDA’s process for evaluating and monitoring projects it undertook from Jan. 1, 2013 through Aug. 31, 2014, and found that the IDA did not include recapture provisions in its PILOT agreements that would allow it to recover economic benefits when companies don’t meet job-creation goals. ...
Welfare for the rich political cronies, out of our pockets (well, those of us who have our names on the tax rolls)
Optimists close their eyes and pretend problems are non existent. Better to have open eyes, see the truths, acknowledge the negatives, and speak up for the people rather than the politicos and their rich cronies.
So within a few days or so, Gazette should be running an article from Metroplex touting all the pilot money going to communities? Isn't that the usual damage control? Along with the Sch'dy article in the TU, also was a bit about Columbia Cty ida shenanigans to do with a food distributor.
So within a few days or so, Gazette should be running an article from Metroplex touting all the pilot money going to communities? Isn't that the usual damage control? Along with the Sch'dy article in the TU, also was a bit about Columbia Cty ida shenanigans to do with a food distributor.
SCHENECTADY COUNTY IDA disputes critical audit State says 1 of 10 projects examined met job goals BY BETHANY BUMP Gazette Reporter Reach Gazette reporter Bethany Bump at 395-3107, bbump@dailygazette.net or @BethanyBump on Twitter. Just one of 10 projects that received benefits from the Schenectady County Industrial Development Agency in 2013 met job-creation goals,
Tuesday. Together, the projects were short 118 jobs they had promised to create.
IDA officials disagree. The projects actually exceeded job-creation goals by 515 1 /2 jobs, they say.
In fact, IDA officials disagree with nearly every finding the state Comptroller’s Office published Tuesday in its audit of the agency. They’re lax about monitoring job creation? Not true. They’re lax about ensuring PILOT payments are made to taxing jurisdictions? Nope. They should stop giving benefits to developers who lease space for jobcreating projects? Not in this lifetime.
“We really challenge them on these things, and then they come back with footnotes and their footnotes are weak,” said Ray Gillen, chairman of
Schenectady County Metroplex Development Authority, whose staff manages the IDA.
The state examined the IDA’s process for evaluating and monitoring projects from Jan. 1, 2013, through Aug. 1, 2014, and extended its scope back to 2003 to review tax breaks doled out in the form of payment-in-lieu-of-taxes agreements.
Of the 10 projects the state reviewed, it says only one created the number of jobs it said it would. Five projects failed to meet their job-creation goals; one came up 24 jobs shorter than before after getting benefits. And insufficient or confusing data on four projects made it impossible to tell whether they had created the jobs they said they would, the state said.
Gillen says that, collectively, the 10 projects exceeded job goals by 515 1 /2 full-time jobs, so even if one project may have fallen short on its job-creation goals, the others more than made up for it, he said.
The state didn’t name the 10 projects it reviewed, but in a response to the audit, the IDA listed them itself with its own explanations for why certain projects fell short (the recession, state cutbacks) or why the state’s calculations were incorrect.
In a response to the response, the state said the IDA only had internal documents to back up its job-creation claims and failed to provide any source documentation to support those claims.
‘BEATING THE DRUM’
The state also criticized the IDA for failing to include claw-back provisions in project contracts that would allow it to recover economic benefits from companies that fail to meet their project goals.
The IDA said it can terminate PILOT agreements with companies whose projects have changed substantially or who don’t make payments on time.
“They want us to go one step further and recapture those lost benefits,” Gillen said. “The comptroller has really been beating the drum to get all IDAs to start doing this. We have no problem considering that, but some of the board have expressed concern that if other IDAs aren’t doing this, we’d be at a disadvantaged position.”
The IDA has outright declined to consider the state’s recommendation that it enter into PILOT agreements directly with the business promising jobs, instead of the developers who lease space to them.
“Providing PILOT benefits to a property management and redevelopment business rather than directly to the businesses leasing those properties increases the risk that the PILOT benefits may not be received by the intended businesses — those occupying the properties and creating jobs,” the report notes.
The report points to the Glenville Business and Technology Park, owned and operated by the Galesi Group, as one example of a PILOT agreement gone awry.
The IDA entered into an agreement with the park’s owner in 1985 to encourage redevelopment of several properties within the park. Since then, the PILOT has been extended and amended on several occasions to exclude parcels Galesi has sold and to include parcels it purchased (Galesi benefits from PILOT agreements on more than a half-dozen of its properties around the county, including the old Alco site currently under development).
“While the company reported a job-creation goal of 550 employees on the 1985 PILOT application, due to the multiple amendments to the original PILOT agreement, it was not possible for us to determine what the current job-creation goal was,” the report states. “According to the company’s website, space within six of those nine buildings was available for lease as of August 31, 2014.”
IDA officials say the arrival of companies like CTDI and Old Dominion Freight Line are an example of the park’s success.
Global repair vendor CTDI has created more than 500 jobs in a new, $11 million, 151,000-square-foot building it leases from Galesi in the park.
Old Dominion employed about 52 employees as of last fall, with plans to ramp up to an eventual 120.
LEASES PREFERRED
The agency has to offer benefits to developers who lease space, officials argue, since so many companies prefer to lease space rather than own. If it doesn’t, these companies will look elsewhere, they say.
In addition, the companies still wind up making PILOT payments, even though they don’t own the property, Gillen said, because their leases are structured as triple net leases, which require the tenant to pony up any property taxes or PILOT payments.
“Ultimately the decision to lease or buy should rest with the company, not the county or the state, and as a result, we do not plan to adopt OSC’s recommendation in this area,” the IDA said in a statement.
Gillen added: “If we had this policy, Schenectady County would have thousands fewer jobs than it has today. We wouldn’t have won Quirky or CTDI. These tech companies want to conserve their capital and put it into tech, not real estate.”
The state is also urging the agency to establish and implement procedures to ensure PILOT payments are made in full and on time, something IDA officials insist they already do.
The recommendation came after the audit found local taxing jurisdictions were underpaid $94,341 from 2003 to 2014. The bulk of this came from an outstanding $91,814 penalty payment owed by SI Group to the Schalmont Central School District.
PENALTY PAYMENT
SI Group was the one business that actually had fewer jobs after it received IDA benefits than before.
The company had planned to retain 188 jobs at its Rotterdam Junction manufacturing plant and create one extra job by investing in a bio-mass boiler that would cut electric costs.
But as of December 2013, after the company had abandoned the boiler project, SI Group reported only 164 jobs — causing a penalty payment to kick in on its PILOT agreement of an extra 7.5 percent per year.
Overall, the penalty was expected to generate an additional $44,250 in payments a year and an extra $584,625 over the course of the agreement.
The Schalmont school district never received one of these penalty payments. The IDA says it notified the district of the payment, but it was ultimately up to the school to collect on it.
The state says the IDA should have a process in place to monitor its PILOTs and take action when a business fails to make a payment.
“These underpayments occurred because SCIDA did not adequately monitor PILOTs billed and collected by taxing jurisdictions,” the report says. “In addition to the financial impact these errors had on municipalities, PILOT billing errors may cause municipalities and the public to have an unfavorable view of future SCIDA tax exemption and PILOT proposals. If municipal officials conclude that they are not receiving all required tax and PILOT payments, they may be less likely to support current or future projects.”
The IDA was created in 1978 to encourage economic growth.
It works with six other economic development agencies to spur economic growth in the county.
While Metroplex is the most visible of these agencies — administering and overseeing projects by the other six agencies — the IDA often pursues projects that would benefit from more flexible financing, Gillen said.
“There are certain restrictions on Metroplex that don’t exist for IDAs,” he said. “There are some deals that can go a lot longer with an IDA, where Metroplex agreements contain sunset provisions. But IDAs can’t do retail projects. So we need to keep all of the tools on the table when we talk about economic development.”
There's a circular logic at work there that I'm not going to comment on. I get tired, ya know? I wonder if he's managed to lay his hands on that file for Madison handbags, the one he couldn't find because it was Friday or something, so he couldn't answer a reporter's question? I would still like to see a list of those jobs, those thousands of jobs, with all the jobs filled AFTER the firms moved to the county starred. It's called "performance measurement", and most of us have to produce proof when our bosses ask us what we have to show for the money they pay us. Imagine trying that at work - "what did you do to earn your raise?" "Oh, I made thousands and thousands of dollars for the company." "Yeah, how?" "Uh, it's a month with an "R' in it, I can't get that data for you, but I'll think of a big number and you can take my word for it."
There's a circular logic at work there that I'm not going to comment on. I get tired, ya know? I wonder if he's managed to lay his hands on that file for Madison handbags, the one he couldn't find because it was Friday or something, so he couldn't answer a reporter's question? I would still like to see a list of those jobs, those thousands of jobs, with all the jobs filled AFTER the firms moved to the county starred. It's called "performance measurement", and most of us have to produce proof when our bosses ask us what we have to show for the money they pay us. Imagine trying that at work - "what did you do to earn your raise?" "Oh, I made thousands and thousands of dollars for the company." "Yeah, how?" "Uh, it's a month with an "R' in it, I can't get that data for you, but I'll think of a big number and you can take my word for it."
Yes, let's see what NEW jobs have been created. Actually, let's near NOT what jobs were merely moved from one location to another, but what were completely new and how much they pay and where have those employees bought a house in the city or county?
Optimists close their eyes and pretend problems are non existent. Better to have open eyes, see the truths, acknowledge the negatives, and speak up for the people rather than the politicos and their rich cronies.
Wasn't our current budget director, Deborah DeGenova, formerly employed by the OSC? Director of something, can't remember it. Be interesting to hear her take on OSC audits, probably better she keep her mouth shut. We all remember Jason Cuthbert.
Wasn't our current budget director, Deborah DeGenova, formerly employed by the OSC? Director of something, can't remember it. Be interesting to hear her take on OSC audits, probably better she keep her mouth shut. We all remember Jason Cuthbert.
Yes, she did work there for about 5 years and the Dormitory before that.
Optimists close their eyes and pretend problems are non existent. Better to have open eyes, see the truths, acknowledge the negatives, and speak up for the people rather than the politicos and their rich cronies.
this will be the last that this will be publicized. The corrupt government will just throw money at it and it will go away!!!
this was no surprise!! everyone knew that the employment #'s were correct. AND.....if these businesses need to show more employment....they will throw their family on the payroll until they meet their quota ....it's done ALL THE TIME!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
That means Gillen has to try much much much harder....less free dinners and more action....
All you can eat at Mexican Radio? lol What a shocker DEMS lying about job creation and making up phony numbers. In Colonie, the State caught ShopRite padding new hires by over 130 employees. What about in Niskayuna? Schenectady County the backwater County that needs to raise regressive sales tax to help multi-millionaire developers has been padding new hiring numbers for over a decade. Still the highest unemployment rate in the Capital District despite $100 million in freebies, tax giveaways and new curbing. Keep the DEM implosion going!
From federal all the way down to local government...it's nothing more than a 'money circle jerk'.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Logged
All you can eat at Mexican Radio? lol What a shocker DEMS lying about job creation and making up phony numbers. In Colonie, the State caught ShopRite 
