$21M for IDA projects nets loss of 8 jobs

GUILDERLAND — The town’s Industrial Development Agency is not serving its purpose, which is to create jobs, according to a report released this month by the state comptroller’s office.

IDAs are created by the state legislature on behalf of local governments; there are 115 IDAs throughout New York, and their purpose is to advance job opportunities by providing funding for projects through tax-exempt bonds, at low interest rates.

Comptroller Thomas DiNapoli audited IDAs for the year 2009, to see whether the public corporations were meeting their economic goals.

The data showed that the Guilderland IDA financed three projects in 2009, for a total cost of nearly $21 million. It was estimated that 40 jobs should have been created due to the projects, and 209 other jobs retained.

However, the audit showed that, actually, in 2009, eight jobs were lost in 2009, rather than any gained.

“I think those numbers speak for themselves,” said Mark Johnson, a spokesman for the comptroller.

Only one other county lost jobs in 2009, and that county did not use its IDA to fund any projects that year. The average number of jobs gained per county by IDA-funded projects throughout the state was 537. 

Donald Csaposs, chief executive officer of the Guilderland IDA, said the three projects included in the audit were the construction of a facility for the Western Turnpike Rescue Squad, an update and expansion of the YMCA, and an update and expansion of a building for the Wildwood Program.

“All three of these are currently in re-payment,” said Csaposs this week. The projects were financed through the IDA in order to receive sales and mortgage reporting tax exemptions.

“That fall-off in the number of jobs isn’t that significant,” said Csaposs, who works as the town’s grant writer. While he didn’t know the exact reason for the loss of eight jobs, he said it could be attributed to the poor economy, and the fact that all three of the projects were for not-for-profit entities.

As a result of the data compiled during the audit, Johnson said, the comptroller is suggesting clawback provisions, which would allow IDAs to recoup money from the companies that don’t meet their economic goals.

“If a for-profit company were to come before us and apply for financing, certainly we’d consider a clawback provision, where basically, if you don’t perform, you have to pay back some of the money granted in tax breaks,” said Csaposs. At this point, however, he does not see a reason to worry about the number of jobs lost.

“If we saw a sharp decline, like 80 jobs instead of eight, it might behoove us to sit down with the project managers and see if we could provide some sort of counsel,” Csaposs said.

“Based on an analysis of the exemption and employment data by county, there does not appear to be a positive correlation between higher tax exemptions and job growth,” says the comptroller’s report. “This apparent lack of any positive impact of IDA tax exemptions reinforces the need for IDAs to provide more and better data on the job creation and retention goals…”  

“The comptroller will continue to look at ways to improve the data and accuracy of the data to make sure the projects will meet economic goals,” concluded Johnson.