It doesn’t seem like a significant economic-development project can happen today without a little help from the taxpayers.
From malls to manufacturing, everyone seems to get assistance in some form or another — whether they need it or not.
The developers of Canandaigua’s North Shore project, Morgan-LeChase, who plan to replace a blighted chunk of land on Lakeshore Drive with a $116 million retail/housing project, are apparently no different.
They have already scored $1.5 million by way of the state’s Regional Economic Development Council program and are hoping to get tax credits from the state to help clean up contaminated land in sections of the 21-acre project area. The projected cost of that cleanup is estimated at $4 million, and the developers hope to get tax credits from the state’s Brownfield cleanup program to pay for a good portion of those expenses.
Still, all that is apparently not enough to make the project viable, or so the developers say.
That’s why they are seeking an agreement that would allow them to take what would have been tax payments to the city, school district and Ontario County over 30 years and instead use the money to pay for $11 million in infrastructure work for the various buildings proposed for the site, including apartments and retail businesses. Payments would still be made, but the money paid to the taxing entities would be reduced. It would rise gradually over the 30 years as the project stages are completed, as well as through increased assessments on the development.
Developers say the soil conditions — some of the site was used as dumping grounds many years ago — have made constructing the foundations more expensive than for a typical build.
Without the tax-break agreement, they say, the project could be jeopardized.
If true, that would be unfortunate, because the latest proposal is impressive both in look and scope and has the potential to truly transform the city’s lakefront.
But skepticism abounds on whether the failure to secure the tax agreement is a deal-breaker for the developers. Some, like noted investigative journalist David Clay Johnston of Brighton, contend it has become the mode of operation for business development today: See how much of other people’s money can be had before putting in your own. In the process, you reduce your risks and potentially maximize returns.
Johnston’s contention is that any project worth its salt should not need a subsidy from the government.
In the case of the North Shore development, the argument is not so clear. Much of the land being redeveloped is not ready for prime time because of the use of the area as a dumping ground. While it is valuable lake property, some of the land is hardly shovel-ready, meaning additional costs for the developer, who might not face such challenges in a typical project. That’s where the $11 million tax pact comes in.
Page 2 of 2 - Even with the agreement, proponents argue, the taxing entities — the county, city and school district — will still be well ahead of the revenue generated from the properties in their current undeveloped condition.
In light of those issues, leaders of the city, school district and county have some difficult discussions ahead. Do they call the developer’s bluff and reject the agreement and possibly scuttle the most promising lakefront project yet, or do they grant the breaks to ensure the long-awaited development finally gets done?
But is there room for compromise or is it an all-or-nothing proposal? Maybe the length of the pact and even the $11 million figure could be scaled back to a level taxpayers find more palatable.
We may have to grudgingly admit that some sacrifices on the part of taxpayers are necessary to get important projects like North Shore done, but that doesn’t mean we have to like them. And just because everyone is doing it doesn’t make it right. Leaders from the county, city and school district must be convinced that granting the $11 million tax arrangement benefits the one group often forgotten in these discussions: the taxpayers.