GCEDC

The public is invited to an annual information meeting at the Genesee Economic Development Center at 7 p.m., April 11.

"GCEDC officials encourage residents to attend the meeting to learn more about economic development within the community," officials say in a press release.

Mark Masse, senior VP of operations, will provide an overview of GCEDC. He will provide information on the current and future development plans. He will also discuss the current business climate in New York and regulatory issues.

There will also be an opportunity for attendees to ask questions.

The session will be held at 99 MedTech Drive, second floor lecture room, Room 214.

Seating capacity is limited to 100 people. Contact Rachael Millspaugh at GCEDC, (585) 343-4866, ext. 12, or rmillspaugh@gcedc.com if you would like to attend.

I took the time to survey the GCEDC's annual report for 2009. In this report, they stated that all of the projects involved resulted in a net gain of 415 jobs. I tried to apply logic to this, but failed miserably. And the jobs I did see created, paid peanuts, which is fine for an elephant, but not a family.

Several things jumped out at me as I read this report. First, places I'm familiar with in Leroy, none of which are doing very well. Lapp Insulator had 318 jobs pre-IDA, and now has 144 FTEs (full time employees). Polymil has none. SJQ Properties, the old BOK building, has none. And R.J. Properties went from 82 FTEs to 9 FTEs after they became involved with GCEDC. Or the Creekside, which was to be open by summer 2010, sits vacant.

Jobs that were created, I'm sorry to say, are jobs at Darien Lake that pay $16,000 a year, or at Comfort Inn that pay 12,000 a year. Who could possibly survive on that amount of money? That's a month's salary for Mr. Hyde.

I also don't know how I feel about Assemblyman Hawley's insurance agency benefitting from government assistance. That seems to me to be a poor decision on both sides. To have him speak at the annual meeting with no reference to his own personal benefit seems a tad disingenuous.

While I appreciate the opportunity to view the latest report, I see nothing in there that warrants the extravagant bonuses the GCEDC gave themselves.

http://www.gcedc.com/pdf/reports/2009_OSC_Report.pdf

If we're going to keep businesses in New York, they need ways to save money, and that's the chief reason the Genesee County Legislature should get behind creating a Foreign Trade Zone (FTZ) in the county, according to Charles Giunta, port director for U.S. Customs in Rochester.

Giunta (pictured above) was brought to the Ways and Means Committee meeting Wednesday afternoon by staff of the Genesee County Economic Development Center.

"I’m a different kind of port director," Giunta said. "I go out four or five times a month and make presentations to companies on foreign trade zones. Why? Because foreign trade zones mean we're going to keep the business here. They're not going to go overseas. If I can save these companies money, then it’s a no-brainer."

A foreign trade zone allows a business to import products and materials duty-free that will be used to manufacture items. It's as if the FTZ is outside the United States. There is only a duty if the item is "imported" (sold) into the U.S.

For example -- as used in the meeting -- if you built motorcycles and bought some of the parts overseas, you would pay duty, say $20 each, on the handlebars, headlamp, starter and seat. But the duty on a completed motorcycle is only $10.  So the company saves money on buying all the parts and pays duty on only the finished product when it becomes a consumed item in the United States.

GCEDC is putting together an application for an FTZ and needs the support of the legislature. A resolution will be presented to the Ways and Means Committee at its next meeting. The GCEDC is also gathering data and support material to sway the FTZ board in Washington, D.C., that there is a need and desire for an FTZ in Genesee County.

If a general FTZ is granted to Genesee County, companies that want to take advantage of the FTZ would need to apply for a subzone. A subzone must be fenced off or otherwise segregated from non-FTZ factory operations.

There is a $5,000 annual fee companies must pay.

The fee would be paid, in this case, to GCEDC, and Mark Masse, senior VP of operations, said the fee would be reinvested in GCEDC's parks and programs.

The idea of applying for an FTZ came up when a local manufacturer made a request for an FTZ. The Genesee County-based company has a plant in Georgia and an FTZ locally would save the company more than $15,000 a month.

"So there is an urgency because every month that goes by, we’re missing out and they’re out that money," said Chris Suozzi, vice president of business development for GCEDC.

Roberta Jordans, with the law firm Harris-Beach, said that with the importance President Barack Obama is putting on increasing American exports, the FTZ board in Washington is trying to expedite applications. The normal 18-month process has been shorted, she said.

Legislators pumped Giunta and Jordans with questions.

Edward DeJaneiro wanted to know that if FTZs aren't technically part of the United States, what happens if a crime is committed.

It turns out, if a person steals from within an FTZ, it's a federal crime.

Inventory control is one of the most closely watched aspects of an FTZ by U.S. Customs, Giunta. While small thefts are usually handled internally, and require notification to customs, Giunta said, big thefts will trigger a customs investigation.

After the meeting, Jordans said that companies within a FTZ must still comply with all state and federal environmental regulations, for example, as well as local zoning ordinances.

Mary Pat Hancock wondered if a FTZ would create local companies that stop buying locally grown crops.

Giunta said there just isn't as much money to be saved on importing food to make it financially worthwhile for a food processor to be part of an FTZ. The duty even on sugar has come down substantially, said Giunta, and many food items have almost no duty.

Jay Grasso wanted to know why, with it being such a seemingly great thing, there aren't more counties setting up free trade zones (the program is 76 years old).

Giunta said there simply aren't many officials with U.S. Customs out marketing the program. A lot of companies don't understand it or think it's too difficult of a process.

Masse (pictured below) said it hasn't necessarily been easy so far to convince local manufacturers to apply for subzones. Many times, businesses haven't sent decision makers to attend FTZ presentations, so something may be lost in translation when it gets back to the decision makers.

"Once somebody gets in and becomes successful, then it will become easier to sell to everybody else," Masse said.

Suozzi said the FTZ will help support other GCEDC projects, such at the STAMP project in Alabama.

"This is a tool to retain business here and it's a tool to attract business," Suozzi said. "This is a huge opportunity."

The day is coming, according to Mark Peterson, president and CEO of Greater Rochester Enterprise, when the I-90 corridor from Buffalo to Albany will rival any high-tech corridor in the world.

Peterson made his bold prediction at the Genesee County Economic Development Center's annual luncheon at Genesee Community College.

More than 100 people attended the 90-minute event that featured presentations by GCEDC executives and elected officials -- both predicting a bright future for economic development in Genesee County and complaining about New York's hostile environment to business.

Peterson said high tech will be drawn to Western New York through the cooperative efforts of the industrial development agencies in Genesee, Orleans, Niagara and Monroe counties.

GCEDC CEO Steve Hyde (pictured above) echoed Peterson in his closing remarks.

"We will help bring back manufacturing to Western New York and we will do it with high tech, green tech and advanced manufacturing," Hyde said.

With five shovel-ready projects, Genesee County is poised to employee 3,000 more people, Hyde said.

"That's more than double the existing manufacturing work force in Genesee County," Hyde said.

He added that once the Alabama STAMP project is completed and completely built out, Genesee County will employ 9,300 more people.

"But it's not just about jobs," Hyde said. "It's about building a tax base."

Hyde said that process is already benefiting Genesee County.

"We have 114 active projects," Hyde said. "That's up 65 percent from 2005. Those projects collectively pay out $4.5 million annually into the tax jurisdictions of Genesee County, towns, schools and the city."

UPDATED 5:33 p.m. with comments from Steve Hyde.

While Genesee County Economic Development Center officials boast of 1,500 jobs created in the past five years, Department of Labor statistics don't show anything near that rate of job growth.

In 2005, according to labor statistics, there were 23,000 non-farm jobs in Genesee County; in 2010, there were also 23,000.

Since 2001, Genesee County has seen a net gain of 100 non-farm jobs.

That said, during the 2009/2008 recession, Genesee County fared better than the rest of the nation. While Genesee County lost 2.5 percent of its jobs from 2008 to 2010, as a whole the United States shed 5.1 percent of its jobs.

"Considering the past recession (Genesee County's job growth) numbers don’t look so terrible to me," said Tammy Marino, a researcher with the NYS Department of Labor based in Rochester. "They look reasonable compared to the rest of nation."

She added, "(The GCEDC) has probably done good job of bringing new jobs into the community, but it’s hard to see just because of the past recession, what we’ve been through in the past two years."

Steve Hyde, CEO of the EDC, said a lot of what his agency does is just try "stem the tide of decline" sweeping New York State.

"You look at the last 10 years and everyone around the country is shedding jobs and there are 100 more jobs in a recessionary environment than we had 10 years ago, on a relative basis, that’s a win for Genesee County," Hyde said. "New York is ranked the 50th most difficult state to do business in. Until we have systemic change in tax policy and and regulation policy, we're fighting hard just to buffer the tide of decline."

It's also hard, Hyde said, to compare DOL statistics with an EDC's job commitment numbers. Companies that get tax abatement and other assistance make a commitment to create a certain number of jobs over a four-year time frame. When the EDC says it created 1,500 jobs over the past five years, some of those jobs are still in the pipeline and wouldn't show up in labor statistics.

"We're working with companies working to grow or retain jobs," Hyde said. "What we're really trying to do is (incentivize) investments because when investment occurs by a company, it will create a long-term tax base and it builds roots in the community, which will lead to long-term job creation."

District 8 Legislator Hollis Upson, who sits on the GCEDC board, said just looking at the raw numbers doesn't tell the full story of job creation in Genesee County. 

"There's an awful of variables there and I don't know how to reconcile the Department of Labor statistics," Upson said. "If the EDC is creating jobs, they don't make any assumptions or have knowledge of jobs that might have been depleted. We (the county) might have lost 1,500 jobs."

In looking at job growth over the past 10 years, two sectors of employment for Genesee County stand out: Manufacturing, which has lost 800 jobs, and government, which has gained 700 jobs.

Marino said that Genesee County and the entire Rochester region is not immune from what is going on in the rest of the nation. Manufacturing jobs are being lost to free trade and greater efficiency driven by improved technology in factories.

"It doesn’t mean the existing companies are are not viable," Marino said. "But more manufacturers are taking advantage of technology to get more output with fewer workers. That trend has especially hit the metro area. We've had very steep job losses in the most recent years."

Genesee County has probably lost manufacturing jobs, just like the rest of the nation, Upson said, as it competes with China and other nations.

"Even Mexico is complaining now about losing jobs to China," Upson said. "Capital will flow to where the labor is cheaper."

But in the end, Upson said, a job is a job.

"We strive for those (manufacturing jobs)," Upson said. "We like those better then anything because they have the best ripple effect."

But, he added, New York is a mighty hard place to recruit manufacturers. He called New York punitive and overregulated.

"Even though manufacturing jobs would be the nice ones to attract, they are very difficult to do so given the umbrella we're working under in the State of New York," Upson said.

It's that climate that led to the EDC changing its public name about 10 years ago from Genesee Industrial Development Agency to Genesee County Economic Development Center, Upson said.

Genesee County's employment peaked in 2008 at 23,600 non-farm jobs.

The labor department tracks the county's jobs on a monthly basis, and online statistics go back 21 years. For this story, we're using the annual monthly average.

Looking at monthly comparisons, however, in a January-over-January match from 2010 to 2011, statistics show Genesee County picking up 300 jobs, from 21,600 to 21,900.

Typically, there are more jobs in Genesee County during summer months. In August 2010, there were 23,800 jobs. 

Over the past 21 years, the biggest month for non-farm jobs was June 2009 when Genesee County boasted 25,100 jobs.

Meanwhile, new unemployment statistics released this week show the county's unemployment rate rose from 7.9 percent in December to 9 percent in January. A year ago in January, unemployment was 9.6 percent.

As for the county's jump in government workers, Morino speculated that while schools have probably added staff, especially the community college, a lot of Genesee County's government job growth is probably driven by the presence of a Federal Detention Center and a Homeland Security office.

In fact, most of the county's government job growth came in 2002 and 2003 in the wake of the 9/11 attacks.

Western New York, Morino said, tends to remain pretty stable in both good and bad economic times.

"We don’t see any extreme highs and extreme lows," she said. "During the past recession, the auto industry was hit very hard and we didn’t see any of that because we’re not really dependent on the auto industry. Also, housing prices remained stable. We didn’t see that big build up in housing values, and didn’t see them fall either."

Here's a news release from State Sen. Michael H. Ranzenhofer.

The New York State Senate has passed legislation (S.2682), introduced by Senator Ranzenhofer, that repeals the “cost recovery” tax imposed on local economic development agencies in 2009 and also requires the state to reimburse agencies for any monies previously paid.

After being passed in the 2009-10 state budget, the cost-recovery tax hurt the efforts of local industrial development agencies to get New Yorkers back to work by taking away economic development money from local communities and sending more revenue to Albany.

"During a time of high unemployment and an economy struggling from a national recession, the IDA cost-recovery tax made a bad situation even worse,” Ranzenhofer said. “Repealing this unfair tax puts funds back in the right place, in the hands of local community business leaders to entice businesses to locate in the state and create jobs, not in state coffers."

The 2009-10 state budget contained a maximum $5 million statewide cost-recovery tax on local economic development agencies. The tax does not reflect a rational basis for actual costs incurred by the state for providing services to local economic development agencies. Local economic development agencies already pay a Bond Insurance Charge to recover costs.

Members of local economic development agencies expressed their support for the legislation. This tax, based on operating revenue, is a disincentive for IDAs to expand programming or reinvest back into the community.

"Senator Ranzenhofer should be applauded for introducing the legislation to repeal this unfair tax," said Genesee County Economic Development Center President and CEO Steve Hyde. "His fellow Senators who joined him to pass S.2682 also deserve congratulations for standing up against this unfair assessment.”

Governor Cuomo has also included an identical provision in his 2010-11 executive budget proposal.

The Genesee County Economic Development Center will host its annual meeting at Genesee Community College at noon on Friday.

There will be a performance review for fiscal year 2010 and the strategic goals for 2011 will be discussed.

The public is welcome. Registration begins at 11:30 a.m.

Assemblyman Steve Hawley and Sen. Mike Ranzenhofer will be in attendance along with Tom Kucharski, president and CEO of Buffalo Niagara Enterprise, Mark Peterson, president and CEO of Greater Rochester Enterprise, Mary Pat Hancock, chairwoman of the Genesee County Legislature, and Steve Hyde, president and CEO of GCEDC.

Press release from GCEDC:

For the seventh year running, Genesee County has been named one of the nation's Top 10 Micropolitans by Site Selection Magazine's Governor's Cup edition.

A micropolitan area is defined as a city with a population of 50,000 or less that serves as the seat of a region or county. There are currently 576 micropolitan areas in USA and Puerto Rico.

The Batavia Micropolitan and Genesee County were first recognized in 2004 and ranked 7th in the nation. In 2005, the Batavia Micropolitan was named the third fastest growing micropolitan in the nation and the No. 1 location in the Northeast. Batavia made the list again in 2006, 2007, 2008 and 2009. In 2010, the Batavia Micropolitan was tied for ninth in the nation.

"Despite the worst economic downturn since the Great Depression, the GCEDC was able to participate in 23 projects and again earned honors as a Top Micropolitan." said CEO Steve Hyde. "It's an accomplishment we are proud of and that will continue to bring our region national exposure and recognition.

"The Fastest Growing Micropolitan Award helped us increase our project volume. It is an honor that we share with the entire community, including our local and regional partners and elected officials."

More than 200 concerned residents -- not all from Alabama -- turned out Thursday night for a more than two-hour presentation on a proposed high-tech manufacturing park.

The park, known as WNY STAMP (WNY Science & Technology Advanced Manufacturing Park) may be the Genesee County Economic Development Center's most ambitious project yet.

And while the handful of residents who spoke may have asked skeptical and probing questions, nobody at this meeting really spoke out against the proposal.

The 15-year-build-out plan calls for the creating of more than 9,000 new, permanent jobs in 6.1 million square feet of manufacturing space. There will also be 180,000 square feet of retail space and a new town hall and museum in the southeast corner.

GCEDC officials pitched the project as one that would create good-paying, 21st Century jobs (average annual wage, $58,000), reduce the brain-drain of youths leaving WNY, provide new revenue for community services, enhance the local infrastructure and potentially reduce property taxes.

Of course, these jobs and all of this new revenue in the community is only created if businesses decide to build new high-tech manufacturing plants -- such as flat screen monitors, computer chips and solar cells -- in STAMP.

Some residents wanted to know why GCEDC thinks -- especially with the seemingly slow adoption of Buffalo East by new companies coming to town -- that any manufacturers will set up shop in STAMP.

Mark Masse, project manager for GCEDC, explained that in the past couple of years, GCEDC has fielded a few inquiries about appropriate locations from the types of businesses that use STAMP, but because STAMP hadn't even completed the earliest of approval processes yet, the companies had to look else where.

"What they're interested in is 'speed to market,'"said Roger Pearson, lead consultant on the project.

He said they need to know that they can get their new plant open in 12 to 18 months, and right now, if a business committed to the park, it would take much longer than that before they could open.

That speed to market was a concern of John Hatch, too. He's a UB student from Amherst and he wants to work in the kinds of industries STAMP will hopefully attract.

"I'd like to see this happen so I can stay in the area," he said.

Macomber Road resident Mark Williams wanted to know if GCEDC had a guarantee from the New York Power Authority for the cheap hydro power these companies will want for their operations.

Masse said, "There's no guarantees in life. ...But, "if we had a significant client come in, the New York Power Authority is will to work with us to ensure power."

Others wanted to know who was going to pay for the infrastructure development that needs to take place to attract these businesses.

Pearson explained that a project like this is really "shovel ready lite." The goal is to get all of the permits and environmental review processes completed, decreasing the amount of time it takes to build a new manufacturing facility. Much of the infrastructure, he said, wouldn't be built until it was needed and those costs would be covered by developers.

Pearson warned that the project plan presented Thursday is still evolving and some aspects may change as it goes through the planning and permitting process, and some of the changes will be based on feedback from the community.

A draft environmental review is expected to be completed by the end of March, with the final review completed by the middle of July.

If all goes well, Genesee County could become a foreign-trade zone by year’s end.

That would be a boon for some local companies, including those looking to grow their business in international markets because it evens the playing field with foreign competitors, according to proponents.

The Genesee County Economic Development Center Board has approved a request to take the initial steps to establish a foreign-trade zone (FTZ) here.

Although this has been in the works for some time, new federal rules have made it easier to move forward, according to Chris Suozzi, vice president of business development at GCEDC.

The application process takes about eight months and it’s quite extensive. Applicants are screened by the Foreign Trade Zones Board of the U.S. Department of Commerce.

"The whole county can be deemed a foreign-trade zone, instead of targeted areas of the past,” he said. “We would act as a public utility. There are fees associated with this for filings, attorney fees, application fees, etc. Those numbers aren't known yet. That will be part of the application process.

"Each (business) applicant has to be able to recoup those costs – realize at least $10,000 in savings – to justify participation.”

A business would have to do its own due diligence to determine if the math works in its favor, Suozzi said.

There are several economic advantages of a FTZ, including reduced customs, deferral or avoidance of duties and federal excise taxes, tariff inversions, weekly customs entry and reduced value on scrap, waste and obsolete products.

Participants are able therefore to reduce the costs of doing business in the United States – distribution, manufacturing as well as non-manufacturing activities – thereby reducing the attraction or need to do business at a foreign site. Companies also have an opportunity to grow sales through increased exports.

The GCEDC maintains that not only will existing companies stand to benefit from a FTZ, but it will serve as an incentive to attract other companies. GCEDC officials are exploring the possibility of expanding the trade area to the entrie GLOW region, which includes also includes Livingston, Orleans and Wyoming counties.

"A lot of U.S. companies can grow their sales internationally, instead of maintaining the status quo, they can grow both by retention and the attraction of new businesses,” Suozzi said.

Liberty Pumps is an example of one local manufacturer that is keen on establishing a FTZ. Suozzi said he would like to meet with any business interested in learning more about foreign-trade zones.

"We’ll set up a meeting and walk you through it,” Suozzi said. He can be reached at (585) 343-4866, ext. 11, or e-mail to csuozzi@gcedc.com.

As most of us have read, the GCEDC recently announced that it is responsible for retaining 21 jobs in the Batavia area. According to the GCEDC, this was achieved by providing two existing hotels with sales tax breaks on their project to replace windows in their buildings.

I wrote to GCEDC inquiring how we can save jobs at $429/job, and specifically, what jobs are being retained. In the email I also questioned the wisdom of granting these tax breaks for a project that will, most likely, pay for itself over time though reduced energy costs.

The following are my original e-mail, and Steve Hyde's response. I call it a response, because I certainly cannot find any answers in the verbiage.

My e-mail:

Many taxpayers would like to know exactly how $429 saves a job.

That figure is derived from your own statement that a $9,000 sales-tax break for two hotels will retain 21 jobs. I cannot, for the life of me figure how that works. Are you asserting that the two firms would not go forward with this project without this tax incentive that constitutes 4 percent of the total cost? I find that doubtful. Even if so, specifically, what jobs will be “retained”?

Please also clarify how GCEDC justifies this tax break for two existing private businesses, when they are replacing older windows with new ones that will obviously pay for themselves over time through reduced energy costs. Your prompt reply is anticipated and appreciated.

Thank you.

Bob Harker

His response:

Feb. 7, 2011

E-mail Correspondence

[ e-mail address deleted ]

Dear Mr. Harker:

Thank you for taking the time to write us with regard to the Days Inn and the Super 8 project in which the GCEDC board approved a sales-tax exemption on Feb. 3, 2011.

The GCEDC Board of Directors, by way of this project and others, is focusing on and taking action in accordance with key elements of our legal authority and with regard to our organization’s mission, which includes catalyzing community economic development success by supporting the growth, expansion and retention of Genesee County’s existing base of businesses.

The GCEDC board’s philosophy is to assist area businesses by helping to ensure that companies across Genesee County remain successful, viable, employ residents and contribute to the overall tax base of the county.

The sales-tax exemption on the renovation project at the Days Inn and Super 8 hotel is an example of a retention project by GCEDC. And through our participation, albeit in a small way (a $9,000 sales-tax exemption), we are supporting and helping retain the ongoing viability of one of our area businesses which is actively investing in our community and contributes a considerable amount to the tax base of our community by way of sales-tax generation and property-tax payments.

Given New York recently ranked number 50 in state business-tax climate as measured in October 2010 by the Tax Foundation – it is pretty clear of the importance to provide tax assistance to new and existing businesses in order to level the cost playing field and to reduce some of the tax burdens on area businesses -- especially in order to ensure their long-term viability and contributions to the community’s tax base and employment base.

Given the Tax Foundation rankings, we must continue to do what we can at the local level to ensure Genesee County is known as a “business-friendly community,” despite the high-cost structures so well known by many at the state level.

It is imperative for our long-term economic success that we continue these practices of providing tax assistance to new and existing businesses, because without viable businesses in our community – we have no economic certainty -- our employment climate would be perilous and the tax burden placed on area residents -- because of a declining business tax base -- would be far worse than it is today.

Thank you again for your correspondence and please do not hesitate to contact me if I can ever be of further assistance.

Sincerely,

Steven G. Hyde

President, GCEDC

Can anyone help me find the answers to my questions?

A pair of Batavia hotels are getting some tax relief through the Genesee County Economic Development Center because they are installing new energy-efficient doors and windows.

A GCEDC news release says the project will mean 21 retained jobs.

The Days Inn and Super 8 at 200 Oak St., Batavia, are expected to spend more than $220,000 on the project.

The owners will save about $9,000 in sales tax on materials under terms of the GCEDC arrangement.

If Steve Hyde said it once, he said it at least a half-dozen times Tuesday during a public hearing on providing tax incentives for a proposed Holiday Inn Express in Batavia: The Genesee County Economic Development Center wants the input of other hotel owners on the potential economic impact of the proposed project.

"We are most interested in your views on what’s going on in the marketplace so we can share that with the board and they can give it thoughtful consideration," said Hyde, CEO of the GCEDC, near the end of a sometimes slightly contentious public hearing.

About a dozen local hotel operators attended the 4 p.m. meeting.

Typicall at such hearings, members of the public speak, officials listen with little or no response and the meeting ends. But Hyde repeatedly engaged speakers, either with questions or by challenging them to deliver more facts.

"If you have additional facts from validated sources that can justify your position, you should present that to us," Hyde said. "We hear you loud and clear but we need you  to provide us with verified facts."

The meeting opened with Mark Masse, VP of operations for GCEDC, presenting an overview of the proposed project and the proposed tax incentives the GCEDC can help deliver.

The developer is Michael Patel and an investment group, Chase Hotel Group, which operates in four states and eight markets. Previously, Patel owned and developed Comfort Inn in Batavia and he currently owns Hampton Inn in Batavia.

The proposed hotel would have 80 rooms and cost $3.5 million to develop.

When completed, the hotel will employ 19 full-time equivalent staff members.

Under the tax abatement proposal, Patel and Chase Hotel Group would receive $112,000 in sales tax exemption, a mortgage tax exemption of $37,500 and a property tax abatement over 10 years of $400,136.

These are taxes, according to Masse, that won't be generated if the project isn't built. 

There will be no tax reduction -- meaning no abatement of existing taxes -- for existing tax liabilities on the property.

If the project is built, it should generate more than $800,000 in sales tax over 10 years and $38,700 over 10 years in fire district fees.

The total economic benefit to the community over 10 years is estimated at more than $8.5 million.

Local hotel owners took issue with these numbers saying the figures don't account for lost business, not to mention the potential closure, of existing hotels.

"You say after the Hampton Inn opened there was an occupancy increase," said Chan Patel, owner of the Clarion Inn on Park Road (formerly the Holiday Inn). "I can prove to you that over the next two years, my occupancy went down by 10 percent."

The operators who spoke said they've all seen occupancy rates drop as new hotels have come into the market and they don't see how a market with a 48-percent occupancy rate in market with 1,000 rooms will benefit by adding 80 more rooms.

Jayesh Patel, owner of Travel Lodge, Batavia, argued, as did other hotel owners, that more rooms will mean that all of the hotels will wind up charging lower rates. The Holiday Inn Express, he said, with the benefit of tax breaks, would then have an advantage over established hotel owners who are paying all of their taxes.

"If the developer has faith in the market then they should spend money out of their own pockets rather than out of taxpayer pockets," Jayesh Patel said.

Rashi Dev, owner of the Comfort Inn, said if Michael Patel believes there is such a need for more hotel rooms in Batavia, why is he charging rates at his other property, the Hampton Inn, that are as low or lower than similarly priced hotels in the area.

"The Hampton Inn should have rates $5 or $10 (per night) higher than us," Dev said. "If he's so confident in the market, why does he need to decrease his rate?"

There were no GCEDC board members present at the meeting. GCEDC staff will present the feedback from the public hearing to the board prior to the board voting on the proposal at its March 3 meeting.

Hyde said any factual information hotel owners can provide at least two weeks prior to the March 3 meeting will also be presented to the board and that hotel owners will be given a chance to speak at the March 3 meeting.

Today, Town of Batavia also announced a public hearing on the project with the town's planning board at 7:30 p.m., Feb. 15.

Top photo: Steve Hyde; inset, Chan Patel; bottom, Mark Masse opening the meeting.

I don't think many would disagree that we all want a robust and aggressive job-creating engine in Genesee County. We also can agree that unfair tax burdens created the need for IDAs with their enticements and tax incentives in the first place.

In the big picture, we all want our county to be chosen as the next home to companies like: Barilla Pasta, Google, Yahoo or Geico -- and without an IDA we don't compete at all.

Even the smaller companies with a vision to produce a new product or service can help make our county vibrant and offer those vitally important, but few and far between, living wage job opportunities. Jobs that can lift our median income and bring some of our citizens their own little piece of prosperity-- the kind that bring money to other businesses by circulating it around our communities.

The jury is still out on how I perceive the GCEDC's, or any IDA's  performance. But I do firmly believe that more stringent oversight on pay rates and elimination of performance bonuses needs to swiftly be put in place by the Legislature to restore the public's trust. I'm also curious about the $500 bonus given to a consultant.

I, too, am a small business owner and, although I won't be creating any jobs other than my own and have no need for a shovel-ready site, I know that I prosper with my business when Genesee County is prospering. I've talked to a few people whom I admire and respect who also own their own businesses. They made some points that make a whole lot of sense.

What if the bonus money and inflated salaries had been allocated and/or redirected for infrastructure or start-up rent subsidies? Phase two of the county water deal is in limbo.

In my own town, we have a great location on Route 19 at the 490/90 interchange. The property known as Oatka Hills has sat empty for years, and for the last several years has had a "For Sale" sign with the GCEDC logo on it. It lacks the infrastructure and utilities and even though the location has so much potential, it sits empty.

Bringing in utilities is an expensive undertaking. Funds being used to pay large bonuses and inflated salaries could, and should, serve more people than just the privileged few who work at the GCEDC. Another alternative is using the bonus money to subsidize rent for start-up businesses that are taking a chance on our main streets -- something the Orleans County IDA is doing.

As the leader of the Genesee County Democratic Party, I have had the opportunity to work closely with candidates running for office at several levels. Invariably, when we've had state and some local candidates running, IDA reform has come up in their campaigns. Like Senator Mike Ranzenhofer, some candidates have come from Erie County with their knowledge on the subject, reflecting what they experience in their own backyard.

And from our local media, and the promising GCEDC press releases, we have always been led to believe that it was different here -- that our IDA was accountable and delivered the goods. I always cringed when our candidates made their opinions on this issue public, waiting for the swift redress that came from one particularly vocal legislator, and occasionally from the local press. This made wading into reform almost a certain political misstep.

For my own complacency about this subject, I apologize. Healthy opposition is needed over some issues and should translate into vigorous debates which show alternatives to the status quo and maybe uncover some things that need correcting in the process.

As a citizen, I am calling on the county legislators to take the responsibility they have been given by the people who have entrusted them. Their responses to date have been very disappointing and show a disconnect.

Our county's median income is around $33,000. We have more rentals in two of our larger population centers than owner-occupied properties, many of our villages have more empty storefronts than filled ones, and our population stands at around 57,000 and dropping.

If crime goes down, there is no bonus check for Sheriff Gary Maha. If road repairs for a given year come in under budget, the windfall doesn't go back to Tim Hens, the county highway superintendent. It is the responsibility of the governing body to hold all public entities accountable, including the GCEDC.

When building the Upstate Medtech Center, the GCEDC should have ensured prevailing wage was paid to construction workers, according to a state Department of Labor (DOL) letter issued in November.

The letter came to light following an Authorities Budget Office report critical of GCEDC's staff compensation practices.

It was written by John D. Charles, associate attorney for the DOL, and issued in response to an unnamed person who asked that the department look into the matter. It concludes that the department's opinion was based solely on the material provided by that person and should not be relied on as a final answer.

Ask for a response to the DOL letter, GCEDC CEO Steve Hyde issued the following statement:

"While the LDC (Genesee Gateway Local Development Corp.) wholly disagrees with the Department of Labor's initial conclusions, we are actively working with them to ensure that they have all of the facts and circumstances of the Medtech project. A final determination has not been made by DOL with respect to the issues and questions raised."

Longtime local contractor Vito Gautieri is known to be concerned about how the bid for construction of the Medtech Center was awarded. It ultimately went to Batavia-based D.A. Tufts Co.

In an interview last week, when asked if the letter from Charles was addressed to him, Gautieri said, "No comment."

He then went on to complain about GCEDC forming a nonprofit corporation -- Genesee Gateway Local Development Corp. (GGLDC) -- as owner and agency developing the project. He said if that's how government agencies are going to operate on construction projects, then "we might as well pull up our shingles and move out of town."

At issue is compliance with New York's prevailing wage laws, which require employees on public works projects to be paid an hourly rate based on a prevailing wage schedule set by the state.

The DOL letter says that according to information given to the agency, the GGLDC's Medtech project does not meet the standards for waiving prevailing wage.

It says that because the project was at first initiated by a public agency (GCEDC wholly owns the GGLDC and is the project's actual owner), it is not just a temporary title holder.  In addition, it is not acting "merely as a mechanism to facilitate financing." If it were just a temporary titleholder and holding title merely to facilitate financing, according to the letter, perhaps paying prevailing wage would not be required.

There will be a public hearing at 4 p.m., Tuesday, in Batavia's Town Hall, 3833 W. Main St. Road, on a proposal to provide tax subsidies for the construction of a Holiday Inn Express on the north side of the Thruway.

The hearing is being conducted by the Genesee County Economic Development Center.

The public is invited to attend and provide feedback on the proposal.

GCEDC did not have information to release to the media today in advance of the meeting on exactly what is being proposed.

In response for a request for more information, Media and Marketing Manager Rachael Millspaugh wrote in an e-mail: "There is no additional preliminary information on the project except what was discussed at the December 2010 board meeting. We will have a project summary available at the public hearing. The GCEDC Board will be reviewing and acting on the request at this Thursday's regularly scheduled meeting."

After the initial two stories about the Authorities Budget Office report on the Genesee County Economic Development Center's compensation practices, some readers wanted to know what local legislators thought of the issue.

In the second story, we had comments from Chairwoman Mary Pat Hancock and Legislator Hollis Upson, who also sits on the GCEDC board. Below are responses from the other seven members of the Genesee County Legislature.

Raymond F. Cianfrini
District No. 1
Towns of Alabama and Oakfield

Legislator Cianfrini said he was disturbed by the ABO report.

"In terms of oversight, I was not aware until I read the report of the way in which they allocate resources for salaries and bonuses," Cianfrini said.

He said he doesn't believe public employees should receive bonuses, but acknowledged there is some question as to whether GCEDC employees are truly public employees.

"As for the size of the pay, should Genesee County have the highest paid director of an EDC -- should we be 'leader of the pack'? I'm not sure I have a full handle on how the GCEDC board has justified paying these kind of salaries."

In terms of oversight, he said he would like to see the legislature review the GCEDC's budget to ensure the county portion of its revenue is being spent appropriately.

"I wonder if our portion of the budget is being used wisely and whether any portion is funding bonuses," Cianfrini added.

He does believe GCEDC has done some good projects for the county and he's a big supporter of GCEDC's efforts to move the STAMP project forward in Alabama, which is part of his district.

"It's an important project that needs to be developed," Cianfrini said. "GCEDC took the initiative to keep the ball rolling and for that. I'm grateful and want to see it continue."

Robert J. Bausch
District No. 2
Towns of Elba, Byron and Bergen

Legislator Bausch said he's supportive of the GCEDC and believes the agency has helped improve Genesee County's economy and wants to see its work continue.

"Having been a lifelong resident of Genesee County, I know one of the major complaints over years and years and years, is that we weren't doing enough to support industrial development, bringing jobs into the county and so forth," Bausch said.

"When John Dwyer took over as head (of economic development) and really got that organization going, we finally started to see some results and I think Steve (Hyde, current CEO) has done an excellent job of following his lead."

As for the compensation issue, Bausch said that's a matter for the GCEDC board to decide.

"I know most of the members," Bausch said. "They are hard-nosed businessmen, so I've got to trust their judgment."

He said that a recent state report on the Genesee County Animal Shelter, knocking the conditions there, and the ABO report knocking the GCEDC board, "tell you about all you need to know about the state of New York State."

"Here's one place getting a negative audit because it is trying to be successful and here's another about a place trying to keep costs down by using volunteers, but they get complaints because it isn't exactly perfect," Bausch said.

As for legislature oversight, Bausch said the legislature has a liaison on the GCEDC board and he doesn't see any need for more oversight than that.

Annie M. Lawrence
District No. 3
Towns of Pembroke and Darien

Legislator Lawrence said she's satisfied with the current level of oversight the legislature provides the GCEDC board. How they compensate staff is really up to the board, she said.

"That goes back to micromanaging," Lawrence said. "I think we have qualified individuals who sit on that board. They know better than we do the day-to-day goings on. I trust these individuals to do their job."

As for the ABO report, she said it was long and involved and it's possible that the bonuses should have been handled differently, but ...

"The thing is, in Genesee County we have had a lot of wins with GCEDC and a lot of positive things have happened as a result," Lawrence said. "We’ve had those jobs created. We’ve helped existing businesses and we’ve helped new businesses.

"Through this downturn, yes, our unemployment has been high, but it could have been higher if we didn't have the projects we had."

Jerome J. Grasso
District No. 5
Town of LeRoy

Legislator Grasso said when he first read the ABO report, he found it pretty stunning.

"You read it and the language it uses kind of takes your breath away in the fact that it's so negative," Grasso said. "But then you look at what Harris Beech (GCEDC's law firm) put out and realize it's all just opinion."

Before the legislature takes a position on the report, however, Grasso said members should wait for things to settle down and then try to get more information and see what's really going on.

"I think we should have the full truth," Grasso said. "We need transparency. I'd like to wait and get the full picture."

However, he does believe GCEDC fully cooperated the the ABO investigators and maybe not all of the information has been released.

"I don't think the GCEDC has attempted to hide anything," Grasso said. "When the ABO people came in, whenever they asked for anything, they got it. I don't think there was an attempt to not be transparent with the auditors."

As for legislative oversight, Grasso thinks the legislature does have the power to make changes if they don't like what they see going on with the GCEDC. He said either board appointments could be changed or the county's portion of the budget could be withheld.

Esther Leadley
District No. 6
Towns of Alexander, Bethany and Pavilion

The GCEDC has Legislator Leadley's full support.

She called the ABO report one-sided and singled out the Batavia Daily News and The Batavian for providing only one-sided coverage of the issue.

"I think the GCEDC has done an excellent job in bringing companies here to Genesee County," Leadley said. "The bonus money was not taxpayer money. I'm convinced of that."

As for oversight, she said the legislature provides a good deal of oversight -- between Upson's position on the board, Hyde regularly appearing before the Ways and Means Committee and the various other reports the legislature gets from GCEDC throughout the year.

Robert J. Radley
District No. 7, Wards 1 and 6
City of Batavia

Legislator Radley, an engineer and planner by trade, said he approaches GCEDC as a business issue.

"I have five business development people working for me from Maine to North Carolina and I look at this from a business development perspective," Radley said. "First, it's typical in business development to pay salary plus bonuses. But putting that aside, I don't see how a report can look at someone's salary without looking at the results.

"If our director has a salary that is twice, say, of Erie County, but he's bringing in four times the revenue, then he's worth the money. To me, to do this right, somebody has to say we're going to compare salaries and we're going to compare results. Then you have a meaningful comparison."

As for legislative oversight, Radley said it pretty much ends at appointing the right people to the GCEDC board.

"It's incumbent upon us to appoint a board with the right qualifications, the experience and the expertise to direct that agency," Radley said. "I don't think it's incumbent upon us to get down into the nitty-gritty."

Edward DeJaneiro Jr., 2nd Vice Chair
District No. 9, Wards 4 and 5
City of Batavia

According to Legislator DeJaneiro, the GCEDC could maybe use some additional legislative oversight, but it's important to remember how vital economic development is to the county.

"We want to keep in mind that GCEDC is one of the few tools we have to concentrate on bringing in new business and making it easy for new business to come into the county," DeJaneiro said. "I don't think we want to throw the baby out with the bathwater. We need to make sure that their bonuses and compensation are in line with what we expect for our community, though."

While the legislature has only limited oversight of the GCEDC, he said he would like to keep a close eye on them.

He said he was rather surprised by the level of compensation staff was getting.

"I want to know what they’re doing, because I think it’s out of the ordinary to give those kinds of wages and bonuses that are so out of line with the rest of the community."

In response to a reader request, we asked for information on whether GCEDC staff members are eligible to participate in the NYS state retirement system.

Here is the full text of GCEDC's response:

Request: Can I get a list of GCEDC employees who participate in the NYS retirement system and what GCEDC’s annual contribution to the pension program is, please?

Response: Membership in the New York State Retirement System is mandatory for all full-time employees of Genesee County Economic Development Center (GCEDC). Currently there are six employees who are enrolled in the New York State Retirement System including the President and CEO, Sr. VP of Operations, the CFO, VP of Business Development, the Marketing and Communications Manager, and the Office Manager. Contributions to the New York State Retirement System are set by the state. In 2010, the GCEDC received an invoice to pay $41,663.