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Conservative Party leaders speak against tax-saving deals for companies

By Tom Rivers, Editor Posted 8 January 2014 at 12:00 am

ALBION – Orleans County Conservative Party leaders blasted tax-saving plans for two projects in Orleans County, deals that will result in hundreds of thousands of dollars in in less tax revenue for local municipalities.

That’s how Al Lofthouse, Conservative Party chairman, sees it.

“You’re raping the taxpayer,” he told county legislators at today’s Legislature meeting. “It’s thoroughly disgusting.”

Lofthouse opposes a tax abatement deal for the Wegman Group, a real estate company from Hilton that wants to develop the 400-unit Cottages at Troutburg.

The Orleans Economic Development Agency has crafted a 10-year tax savings plan for the 126-acre site in the northeast corner of Kendall along Lake Ontario. The plan only applies to the land. Any new seasonal cottages will be taxed at 80 percent of their value.

The land is currently assessed at $1,305,200. The EDA proposal would save the company more than $200,000 over 10 years.

“You’re taking public money and giving it to private companies,” Lofthouse said.

The land, a former Salvation Army camp, was tax exempt for about 40 years and didn’t generate any tax revenue for the local municipalities until very recently, said Gabrielle Barone, vice president of business development for the EDA.

She said the project could boost the town’s tax base by $30 million when it’s fully developed. She told Lofthouse to look at the PILOT in the early stages of the project as a small investment for the bigger return later as the cottages are built.

The EDA will have a public hearing 9 a.m. Jan. 15 at the Kendall Town Hall for the Troutburg tax abatement plan

Paul Lauricella, Conservative Party vice chairman, also said he opposed a sales tax exemption for Claims Recovery Financial Services, which could spend up to $4,430,000 for new equipment, machinery and furnishings as part of its relocation and expansion into the former JP Morgan Chase call center on East Avenue.

The company won’t have to pay sales tax on any of those purchases, a benefit that could save the company up to $354,400 because of the sales tax exemption. Both the county and state won’t collect $172,200 each in sales tax if CRFS spends $4.43 million for equipment and furnishings in its expansion and relocation. The sales tax abatement was approved last month.

The county didn’t give away the sales tax because it’s money that was never received, said Chuck Nesbitt, county chief administrative officer.

CRFS has about 600 employees in the county now and plans to add 150 more as it moves into the former Chase site. The company was being wooed by economic development agencies to expand in Texas. The company, led by Albion resident Jodi Gaines, picked Albion to grow.

“The sales tax abatement helped them to stay in Orleans County,” Barone said.