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Here in New York, industrial development agencies (IDAs) are one of main job creation mechanisms for local communities.In 2009, IDAs gave away close to half a billion dollars in tax breaks to companies in the name of economic development.IDAs are known as "public benefit corporations" - they're supposed to help their local communities, and create jobs.But in their four decades of existence, they've been accused of everything from failing to comply with state laws, to simply being inefficient.You can follow the Innovation Trail's investigation into how IDAs spend your tax dollars by subscribing to the RSS feed on the right.

Independence at Binghamton-area IDA comes with cost to oversight

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Matt Richmond
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WSKG
The Charles Street Business Park is a reclaimed industrial site in Binghamton, a city block owned by the Broome County IDA. The only site currently occupied is leased by Emerson Network Power.

The Innovation Trail is taking a closer look at New York State's industrial development agencies, or IDAs. Follow our coverage by subscribing to the IDA RSS feed.

Richard D’Attilio is the executive director of the Broome County Industrial Development Agency.

Any project awarded tax breaks by the IDA comes across his desk. And any project that is rejected comes across his desk too.

D’Attilio started with the agency 18 years ago, turning it into - basically - a developer that gives away tax breaks.

“We are revenue-driven. We are independent and autonomous from the county, the government,”  says D’Attilio. “Once the board of directors has been put in place, they are the final word on all activity.”

That means only the nine member board of directors has a say in how the IDA spends money.

It’s not clear that the board, which meets once-a-month, actually gets involved in any meaningful way.

A review of more than a year of board meeting minutes found no projects that were rejected by the board after getting the OK from D’Attilio.

One former board member, who declined to speak on tape for fear of political retribution, says everything the IDA does comes from D’Attilio: The board doesn’t get involved in which projects are chosen.

The Innovation Trail was unable to get a response to that charge from D’Attilio - after our initial interview, he stopped returning our calls.

‘Its all new money’

D’Attilio says the IDA has a long history of operating independently.

“Since 1970, we’re probably just about anywhere you might see industrial growth and development and it’s a fairly long list of projects,” says D’Attilio.

The IDA is a powerful organization. It gave away $66.7 million between 2006 and 2010. But D’Attilio says making those deals is important for Broome County’s economy.

“One thing, to make a point here, we do not take and I believe this very firmly - we do not take taxes away from any community in any deal that we do. It’s all new money,” he says.

That new money comes in payments made to the IDA known as PILOTS, or payment in lieu of taxes. The PILOTS go to local governments and schools instead of regular property taxes. Over time, usually after about 15 years, the company steps up its payments to the full tax rate.

Between 2006 and 2010, the IDA’s projects brought in a total of $28.6 million to schools and local governments.

That’s the main value an IDA can offer - relief from property taxes. But the IDA also profits from the deals.

Everybody is treated the same way’

D’Attilio says the agency has grown its revenues and built up a surplus of millions because they’ve taken over old industrial sites and redeveloped them.  

“We’ve been successful because we took a few risks over the years, risks that weren’t necessarily taken because we wanted to get into the real estate business.”

Because D’Attilio has so much control over the IDA, he’s able to take those risks. But he claims his decisions are largely dictated by state law.

“So if a company qualifies, it’s pretty much, everybody is treated the same way. So it’s not like we can arbitrarily pick and choose who based upon any criteria in terms of needs,” says D’Attilio.

That argument for the projects chosen doesn’t make much sense to Tompkins County IDA board member Jeff Furman.

“If there’s a checklist, an automatic checklist, I understand that gives people more security, it’s easier to know and you don’t have to deal with procedural stuff, but why have an IDA board at all?” he asks.

According to Furman, an IDA board should take a more active role in shaping the kinds of businesses that come into an area than Broome County’s IDA board does.

Pushing for county oversight

Jason Garnar, a former chairman of the legislature’s economic development committee, says he’s advocated for reforms that would strengthen the board, to put decision making in the hands of more people.

“Unfortunately, the county doesn’t directly control the IDA,” Garnar laments.

Garnar says he pushed the board to require companies to return money if they don’t create the promised number of jobs, to mandate local labor for all projects, and to ensure that the jobs created pay better than minimum wage. Garnar says no action was taken.

“I think some of the IDA members were worried that if we put too many requirements upon companies that they’d just go someplace else that didn’t have those types of requirements,” says Garnar.

And that’s the main argument that has kept the Broome County IDA so independent for so long.

Tomorrow the Innovation Trail’s Ryan Delaney will look at at another IDA on the opposite end of the spectrum: Jefferson County Industrial Development Agency, which requires that every project receive “taxing jurisdiction approval.”

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