On Second Thought ...

I have a story in today's paper on a bill awaiting Gov. David Paterson's signature that would end Empire Zone benefits for housing construction. The bill's sponsor, Assemblyman Mark Schroeder, a South Buffalo Democrat, said his intent was much narrower, but it's tough to read the bill or the bill summary and come away seeing his interpretation.

Schroeder is already second-guessing the bill, saying he's  "looking at it more closely. I realize that my intent in the bill and what it actually does may be in conflict."

He was scheduled to meet Tuesday afternoon with City Hall officials, who oppose the bill. Brian Reilly, the city's newly anointed commissioner of economic development, said it would put a crimp into some 15 projects. (See list below).

I suspect Paterson will veto the bill, and perhaps he should. But the measure begs a larger question:

Should an economic development program aimed at helping the poor be used to provide tax breaks for upscale housing that benefits the rich?

Consider some of the projects slated for Empire Zone benefits, including hefty property tax abatements. There's the top three floors of the former Dulski Federal Building on Delaware, which will feature condoes fetching up to $1 million. Or the condos and townhouses in Erie Basin Marina selling for more than $500,000, whose buyers will save an estimated $100,000 in property taxes over 10 years.

The question, put another way: If you can afford spending a half-million or more for your digs, do you really need a tax break?

Here's the list of projects provided by Reilly that he said are counting on Empire Zone benefits. Those of you in the know will note that few of the project are in the inner city. Ditto for being "affordable housing."

504 Washington St., conversion/renovation; residential, 6 dwelling units

Courtyard Mall, Phase II+, 450-460 Main St.;upper floors, renovation/conversion; mixed-use

567 Exchange St., renovation/conversion-artists studios; cost TBD

Waterfront Place, 35 Ojibwa Circle, Waterfront Village; new construction townhouses & high-rise condo

Statler Building Renovation, 107 Delaware Ave.; mixed-use: hotel, office, housing

Sycamore Village; 24 units, new housing construction

200 Delaware Building (Dulski); Renovation; Mixed-use office, hotel and residential

937 Broadway (Mautner Paper Box), Conversion/Reconstruction, residential, 40 units

Greystone Apartments, 24 Johnson Park; conversion, residential; 33 units

Loft Conversion, 686 Main St. (Birzon Building); renovation, mixed-use

Genesee Gateway, 99-107 Genesee St., renovation, conversion, mixed-use

Creamery Building, 199 Scott St., renovation/conversion, residential

National Casket building, 430 Virginia, renovation/conversion; 10 apartments

Willert Park Village Housing, 15-new single-family residences; Kane, Mortimer, Walnut, Spring & Camp

960 Busti Ave., renovation/conversion to mixed-use housing & office (Ellicott Dev.)

Comments

[reflip]

ed,

I was trying to say that the fate of the poor is tied to the economic health of the City as a whole.

Tax incentives to invest in downtown are not stealing from the poor or giving to the rich. It became necessary to create an Empire Zone downtown because NOBODY would invest there otherwise. The development and the jobs were fleeing faster than you can even say "disinvestment." That fact means that money was being concentrated further and further away from poor people, giving them no access whatsoever to the WNY economy. That perpetuates the poverty cycle. The system was put in place for a reason - to reverse the centrifugal flow of $$$ away from the city. Tax credits exist to bring money back into the city. Not simply to do rich people political favors.

Do people game the system? Yeah, sure. But the program of tax incentives exists to bring wealth back to the city, and that is exactly what it is doing.

By the way, the real outrage would be tax breaks for the GEICO call center in Amherst. THAT is emblematic of people taking the system for all it is worth.

[reflip]

James,

Thanks for the reply. But what you are talking about in your reply appears to be different from what you posted initially.

Implying that all of those projects you listed are examples of government waste and cronyism is one thing. Saying they're bad because they're not in "the inner city" (which is where, again? I see almost all downtown and east side buildings on that list) or they don't help poor people is a different thing.

The Wendt Foundation is supporting the Genesee Gateway project. Are they part of the cronyism, too?

I guess what I really want to know is, which projects listed above do you have a specific problem with and why. Which of the above projects is in fact emblematic of the government corruption, political back-scratching, favoritism, rich-getting-richer-at-the-expense-of-the-poor standard operating procedure in WNY? Stand behind your claims. Can you expose how the above projects are actually going to harm the city and the citizens of Buffalo (myself included, since I live in the city too). I thought they were good things. I would like to know how I'm wrong so I can correct my behavior in the future and be a better citizen.

Also, I would argue that downtown is a blighted neighborhood. I've made a claim that downtown revitalization does in fact help poor people in a broad sense. Ed even accused me of stealing from the poor to give to the rich style trickle-down economics because of it. But I'll stand by my ideas. Do you want to make a case that downtown revitalization does not help poor people?

[ed]

Here we go again with the trickle down. Give nothing to the poor they will benefit by the off shoot of the rich. Those 8000 properties owned by the city were probalbly acquired for back taxes. Why couldn't some program that encourages investment in existing dwellings be implemented, why do neighborhoods have to be decimated for developers to come in to make big $$$$ to restore. Is it the intention of the Empire Zone to replace poor neighborhoods with wealthy ones. Is is profit driven. Does it improve the quality of life for some of poor or is their fate directly attached to that of the most well to do.

[James Heaney, Outrages & Insights author]

Dear Infuriated: For the record, I live in the city, do as much of my shopping there as I can, send my kids to public schools. Can you say the same?

You interpret my pointed questions as support for the status quo. In fact, I am challenging it. Can you honestly say what we're doing is working?

Over the past five years I have investigated the city's use of the Empire Zone and Community Development Block Grant programs, the city's two primary economic development tools to deal with poverty.

What I found: both programs have been manipulated to serve other interests.

In the case of block grant funds, I found City Hall uses the money primarily to cover payroll costs and help fund otherwise unbankable development projects.

Empire Zones, meanwhile, function largely as a source of corporate welfare for downtown business interests. I mean, should folks like Cellino & Barnes be getting benefits, much less people who buy million dollar condos?

Too many projects get benefits not because they need them, but because developers know how to game the system. There's a mentality in this town that everybody who builds something deserves a subsidy. I don't buy it. There's a phrase for it: "crony capitalism."

As I see it, one reason why we rank as the nation's second poorest city is because we use the anti-poverty programs at our disposal to benefit politicians and businesses, regardless of their impact on the poor. We need to make more intelligent use of the economic development tools we have at our disposal.

Let's take the Dulski Building project as an example. In a growing number of cities, the developer, in exchange for subsidies, would be required to build to a LEED (green) standard. In Los Angeles, the economic development agency would most likely have required a Community Benefits Agreement, which would obligate the developer and/or major tenants to somehow give back to the community. Maybe it's in the form of jobs for city residents, investment in a nearby park, whatever.

Here, the government simply cuts the developer a check, so to speak, and that's the end of it. Except for the subsequent campaign contribution.

One more point: A run-down house in a run-down neighborhood doesn't qualify as "afforable housing." We've got a lot of the aforementioned. I'm not saying we need to build a lot of new "affordable housing," But there's a compelling argument in favor of rehab. Very little of that is going on, however. No, the politicians prefer ribbon cuttings in front of a brand-spanking new house, even if most of the neighborhood around it is falling apart.

[Steve in Wheatfield]

reflip...I couldn't have said it any better. Thanks for saving me hours of typing the same thing!!

[reflip]

Heaney, you infuriate me. You don't care about poor people at all. And you don't like the city much either, do you? Because it sounds to me that you would prefer the city to remain nothing but a warehouse of poor people (under the guise of "helping them") while all the money in the region keeps fleeing to greener, exurban pastures. THAT does not help poor people. Poor people need access to commerce - i.e. AN ECONOMY - in order to generate wealth for themselves.

What to tax and what not to tax is a matter of public policy. In this case, the public policy exists to incentivize downtown development, because we've finally recognized that bringing people and jobs back downtown will ultimately help reverse the centrifugal forces of the last 60 years, which took wealth AWAY from the poor (who didn't have the means to follow it) and concentrated it in economically hyper-stratified suburbs. The city must create wealth for itself, because that is how to ultimately help the poor who live in the city now. The city needs to have an economy within its borders. That will give the poor access to the jobs that followed the people to Amherst and then Clarence and Orchard Park and then East Aurora and then...

Uh, by the way - where exactly is the "inner city" in Buffalo? Please enlighten me. "Inner city" is one of the most antiquated, least insightful and most outrageously ignorant phrases you could drop into your column about "helping" poor people.

Would you prefer these people with million dollar digs just continue to live in the suburbs? How would the status quo help poor people? (It sure as hell hasn't helped them much so far). Tax breaks incentivize people to move downtown the same way low-interest government mortgages on new suburban homes (unavailable to people who didn't "happen to be white") and free highway driving incentivized them to move out of the city in the first place. Would it be better if we just keep taking all of our cash and our lives and fleeing the "inner city" by moving farther and farther away from it? That's called disinvestment and it is how we got in this economic mess to begin with.

Speaking of which, why do you think that the folks who live in low-income neighborhoods have so little access to fresh food? Because retail follows money. Grocery stores close and move to the suburbs because that's where the money went. Bring the people with money back to the city and one day you might see a grocery store that poor people can access too.

Also, is the explicitly stated purpose of Empire Zones "to help poor people?" I was under the impression that it is not. I thought it was to stimulate the economy, which ultimately does help poor people by giving them a means by which they can make themselves less poor.

By the way - in case you never noticed, Buffalo, due to the lack of a healthy economy, is brimming with affordable housing stock. There's so much of it that we can't even give it away. And so, it rots. You could make the argument that we don't need ANY more "affordable housing." What we need is to help people afford to live in the homes we've already got. If you really want to help the poor, help them pay their heating bills through "green" programs that make their (existing) homes more energy efficient. Also, start advocating for expanding our public transportation system (which is much more efficient when jobs are in a central location, such as DOWNTOWN BUFFALO.)

Many of these projects are/were decrepid, crumbling and vacant buildings. That is the definition of "blight." Is that what you want Buffalo to look like? Do you really think it is a bad thing to give tax breaks to those who are willing to redevelop these buildings? You've done a great job of subtly insinuating that these projects are all bad - that they "help the rich". Ok - so what do you want to see happen? Who should we be giving tax incentives to? And for what purpose? Why were all these buildings on the verge of falling in on themselves in the first place? What would you do with them? I'd love to hear your answers.