HAMBURG, N.Y. — When a big company announces plans to come into a region and build a new factory and hire new worker, they often ask for taxpayer help. It has been a long-held trade-off for economic development.
But it seems even local politicians are more often calling into question those tax breaks. That is especially the case with an empty warehouse built for Amazon right off Route 5 in the Southtowns.
2 On Your Side first told you last year about the situation with that 84,000 square foot building on Bayview Road in the Town of Hamburg. On Thursday it was the backdrop for some state lawmakers, who are now targeting town and county industrial development agencies that they feel are giving too much away to try to lure in employers.
With that still apparently unoccupied $47 million planned Amazon warehouse just off Route 5 in Hamburg in the background, state lawmakers are now seeking proposed legislation against town industrial development agencies, or IDAs, such as the one in Hamburg, which in 2021 granted $6.2 million in tax breaks to bring Amazon in. That was in exchange for 75 jobs paying $15 an hour.
That may be somewhat similar to the Niagara County IDA, which a year ago approved $124 million for a massive warehouse with 1,000 jobs near the Niagara Falls.
State Assemblyman Jon Rivera is a Democrat who represents portions of Buffalo, Lackawanna, and Hamburg. He has proposed legislation that would prevent the formation of any future town IDAs and stop them from using tax incentives for retail operations, such as chain restaurants.
"Deals like this should never have been cut. Town IDAs need to be reined in from their bad deals and a lack of long term economic growth," Rivera said.
He added: "We empower these institutions, like IDAs, to go out and lure companies to regions like this all over the state, that in the end could probably afford it without their tax incentives, to come here convince us that we need them and in the end fall short on their promise."
Of course, Assemblyman Rivera maintains this is much different than the reported $284 million in tax incentives that local governments near Syracuse, in concert with the state and federal government's $9 billion incentive package, provided to Micron to build a massive computer chip company with 9,000 well paid tech jobs.
2 On Your Side asked: "We're competing against Texas, South Carolina, what have you, but you're saying well, let's not give them everything, so isn't that kind of a Catch 22 for you?"
Rivera responded: "No, what I would say is there's always going to be a competitive nature in our economy. You know, what we lack in good weather, other municipalities and other regions of the country will beat us in. But at the end of the day you know our environment is not one where one cannot thrive."
We were talking about the business instead of the actual weather climate, and some business leaders may definitely disagree on that point.
But back to Amazon in Hamburg and the IDA incentives decision of 2021, Rivera, who presented signs which stated that the Frontier School District had already lost over one million dollars in the Hamburg Amazon deal also said: "We do not have to bend over backwards and cater to the faceless, irresponsible companies that want to take advantage of our tax money."
Sean Doyle, who is the executive director of the Hamburg Industrial Development Agency, told us in response: "The taxpayers actually are overall in a better financial position with Amazon than they would be without Amazon. That land now, at only land value itself is generating $30,000 for the Frontier School District. The new tax revenue generated from that investment is discounted, so yes, the school districts are for-going potential revenue but actually they're getting new revenue (in the future). That would not be there but for the Industrial Development Agency."
Doyle also says they actually have representation from the local school districts within the IDA and that they can and will claw-back those tax incentives if Amazon does not start up warehouse operations on Bayview Road by March of 2024. That is within their two year window for local firms to act after they actually get a tax incentive.
As to the question about $15 an hour jobs, Doyle says some people may actually be seeking such employment and Amazon is now hiring with some positions paying over 18 dollars. Hamburg IDA Board Chairman Robert Hutchinson also said during the February 2021 board approval vote that "entry-level positions are something that we do need here. And they may not be the best paying jobs, but for some people they still provide hope and opportunity and therefore I am behind this project."
We also asked Doyle: "How does it make you feel to see state lawmakers questioning your purpose and whether you should even be in existence?"
Doyle responded: "Yeah, it's curious when state lawmakers question our existence as they brought us into existence. My focus is is on the communities I serve."
Doyle says he is sure that Amazon is committed to the Hamburg warehouse and will be ready to start hiring by September so they can be fully up and running by the holiday season. He says there are crews actually working inside the warehouse structure to install the automated package handling equipment used by the company.
2 On Your Side heard that same comment from a company spokesman back in March of 2023.
But we also actually heard the same schedule for last fall in 2022 with no further apparent action taken by the company.
Hamburg Supervisor Randy Hoak says if they don't follow through the town may seek legal action against Amazon. But he admits it would be a difficult legal challenge against a behemoth corporation and its billionaire, plus owner Jeff Bezos.