May 11, 2013


State report tallies IDA deals

14 projects received about $950,000 in tax exemptions in 2011

StateBob Ellis/staff photographer
Pyrotek manager Tom Howard, far left, explains one of the South Cortland company’s products during a May 2011 tour. The firm was among 14 local projects receiving tax breaks in 2011, according to an annual report on industrial development agencies released by the state comptroller. The firm moved to the former Monarch plant on Route 13 in 2011.

Staff Reporter

The Cortland County Industrial Development Agency disbursed $954,137 in tax exemptions in 2011, according to an annual report by state Comptroller Thomas DiNapoli.
The county gained an estimated 472 jobs through IDA projects in 2011, at a cost of $2,022 per position. The agency created 14 fewer jobs than the 486 anticipated, according to the report released Tuesday.
In 2010, the agency disbursed $465,585 in tax exemptions and $2,613,110 in 2009.
But the report is inaccurate, said Karen Niday, chief financial officer of the county IDA and Business Development Corp., because of glitches in the state’s new reporting software.
The Cortland County IDA reported 360 more jobs were created in 2011 than the state’s report, she said.
The 2011 report also did not include the job creation information for two payment in lieu of taxes agreements that came to maturity in the first quarter of the fiscal year, but it did include the projects’ tax exemptions, Niday said.
“We had 14 projects on the books in 2011,” said IDA Executive Director Garry VanGorder, and the projects received a total of $964,285 in tax exemptions — $188,919 in real property tax exemptions, $675,366 in sales tax exemptions and $100,000 in mortgage tax exemptions.
“The jobs that were created by those 14 projects was 832 jobs and that represented an increase of 94 jobs over the year,” VanGorder said.
Each position cost the county $1,159 in tax exemptions, VanGorder said.
“Even at $2,000 a job, that’s very reasonable,” VanGorder said.
Companies report jobs to the county IDA using affidavits, Niday said.
Excluding IDAs in New York City, the median total net tax exemption disbursed by IDAs for 2011 was $1,181,694 and the average was $4,844,427.
Tax exemptions include property, sales and mortgage recording taxes, according to the report. IDAs can also provide tax-exempt loans.
Among the major new projects for 2011 was a PILOT agreement to lure Pyrotek to its Route 13 location, VanGorder said.
Under the agreement that takes effect in 2018, Pyrotek was given an estimated $395,930 in property tax exemptions.
Since Pyrotek moved to Cortland County from Madison County, it has grown its work force to almost 100 from 35.
A PILOT agreement with Greek Peak to aid the development of its outdoor adventure center provided $616,000 in property tax exemptions over 11 years.
According to an affidavit filed with the IDA in 2012, the project created 37 jobs.
But after the Virgil resort was bought April 19 for $7.6 million through a bankruptcy auction, the new owners did not request the PILOT to continue and the deal was terminated, VanGorder said.
“We believe that we do strong work for the community,” he said Tuesday, noting that the IDA carefully investigates projects for approval and many developers report that they would not create jobs without IDA support.
In 2011, Pyrotek division manager Tom Howard stated that financial incentives were critical to keeping Pyrotek in New York state.
Pyrotek had looked at moving to Tennessee, South Carolina, and Monterrey, Mexico, as well as splitting operations up around the world.
Across the state, excluding New York City, IDAs created a median of 569 jobs at a median cost of $2,022 per job in 2011.
The median number of jobs that were expected to be created was 704, or 135 fewer than were added.
On average, the IDAs outside of New York City expected to create 1,562 jobs and created 1,584 positions at a cost of $8,687 a job.
In 2010, county incentives created 248 jobs, or 224 fewer jobs than were created in 2011, and in 2009 the agency helped create 195 positions.
In 2009 it cost the county $13,401 to gain a position, while in 2010 it only cost $2,280.
An estimated 1,122 jobs were retained in 2011 by Cortland County IDA incentives, according to the report.
Cortland County had 14 IDA projects in 2011. The state median, excluding New York City, was 19 and the average was 38.
In his report, DiNapoli calls for IDAs to publish an annual summary of projects that receive tax exemptions on IDA and municipal websites, among other reforms.
Cortland County’s IDA currently publishes annual reports on its website — the most recent is from 2011.
Provisions that would allow IDAs to reinstate taxes if project goals, such as employment, are not met were also urged — provisions that Cortland County IDA routinely includes in its agreements.
Reforms should also target requirements that developers provide accurate employment information and rules to use uniform project applications and formal evaluation selection practices that include cost-benefit analyses.
The report is available at


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