Monday, May 07, 2007

Development Incentives

An article in the Saturday Ithaca Journal describes the decision of the Tompkins County Industrial Development Agency not to revoke tax abatements for Emerson Power Transmission. In 2002 the IDA granted sales and property tax abatements totaling an estimated $428,000 to help Emerson move a subsidiary to Ithaca. The move was expected to bring 137 new jobs to Ithaca. It has resulted in 129 new hires and Emerson is still planning to hire six more people.

Two weeks ago Emerson announced plans to move 55 corporate jobs out of state. IDA has decided that, in view of recent recession in the industry, the 135 new jobs meets the goal of the tax incentives. The loss of the 55 corporate jobs is unrelated to the tax incentive plan.

A similar decision making process is ongoing in the Town of Dryden. In 2001 the Town of Dryden gave Cayuga Press a low interest HUD loan of $385,000 for a term of 15 years to finance a new press expected to create 15 new jobs. They met the hiring goal promptly. They have consistently made timely payments and have repaid more than a third of the loan plus 2% interest.

In 2006 Peter Schug, owner of Cayuga Press, announced that they are expanding. Because they were unable to find an adequate existing building Dryden and the cost of a new building was prohibitive they planned to move the entire company to the Empire Zone in Cortland and they have now completed that move.

Schug appeared before the Town Board to requests permission for the move as stipulated in the loan agreement and the Board immediately voted to allow the move.

The loan agreement further specifies that if the company moves out of the town a default condition is created under which the Town may decide change the terms of the loan. But since the announcement of the planned move, the Town Board has been dragging its feet through a discussion of the terms of the loan. See discussions in Town Board minutes of 9/14/06, 11/15/06 and 12/7/06 among others. Some board members think Schug, as a long time resident of Dryden, deserves special respect. And that since all employees of Cayuga Press who live in the Town of Dryden are expected to keep their jobs and commute to Cortland, the company has, in fact, met their obligation. And that Cayuga Press is a respectable company and we should continue to support them.

Others, including myself, think that jobs in Cortland are not the same as jobs in Dryden. And that, especially in light of tax incentives available to Cayuga Press in the Cortland Empire Zone, we need not continue to support them. We should make the low interest loan money available to businesses in Dryden. We are willing to extend the loan to Cayuga Press at a competitive interest rate while we recruit other businesses who could expand if they had this low interest loan available. This extension would give Cayuga Press time to arrange other financing.

It seems pretty clear to me. What do you think? Maybe we should have a public hearing.

1 Comments:

Blogger Jason said...

I think that Cayuga Press should not be supported unless they are willing to put, into writing, that the jobs held by Dryden residents won't be eliminated, or filled by non-Dryden residents in the event of turnover, as long as the loan is outstanding. If they won't do that, then end the support. I don't support corporate welfare, but if we're going to have it then we, meaning Dryden, must get something out of the deal.

By the way, how much are we, the taxpayers, paying for each of these jobs and how much do these jobs pay?

4:54 PM, May 10, 2007  

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