Tax breaks approved for COMIDA and Midtown Tower
Posted at: 08/27/2013 3:15 PM
| Updated at: 08/27/2013 6:31 PM
By: Berkeley Brean | WHEC.com
Should a national wholesaler and a wealthy local developer get millions in tax breaks to do business here? The answer the county and the city say is yes, because the alternative is the status quo, which for two of the major projects approved Tuesday is nothing.
COMIDA approved a break on property taxes to develop Midtown Tower and City of Rochester Bureau of Business and Housing Development approved a break on property taxes for Costco to build in the city.
The Costco building is going at the corner of Westfall Road and East Henrietta Road. They've already started the construction work. It's a property tax and sales tax deal. It means Costco pays the city $3.5 million over 15 years.
At the public hearing Tuesday morning, the representative from Costco said they were offered a good site that is big enough to handle the size of their building.
I wanted to know why they needed the tax break.
News10NBC's Berkeley Brean said, “Wouldn't you ordinarily build a store where you have customers, where your business report shows you have customers?
Erich Brann, Costco, said, “Absolutely, we have to be in an area where we have customers. Doesn't do us any good to a put a building where no one is there to shop.”
Brean said, “So if you're building it based on having customers, why would you need tax breaks to build?”
Brann said, “Don't know if I can answer that question. Like I said, without the budget information, I don't know.”
Brean said, “Do you think Costco would not build where they're building if you didn't do this?”
Bret Garwood, City of Rochester Director of Business and Housing Development, said, “Like I said, we work with COMIDA to get project done that would otherwise not occur. We don't believe Costco would be moving to this location without the incentives.”
The county approved tax breaks for Buckingham Properties to develop Midtown Tower to into three floors of office and retail and 14 floors of apartments.
Brean said, “Would you do this project if you didn't get the tax abatements?”
Richard Finley, Buckingham Properties, said, “That's a tough thing to determine. I couldn't answer that accurately. But probably not.”
The county says the fact is the Midtown Property pays no tax right now.
Judy Seil, COMIDA, said, “So it's $10 million and and a $50 million investment in the center city which we don't have at this point.”
Costco is considered retail and that usually means they're not eligible for tax breaks, but because they're building in the city which is designated a distressed area, they get the breaks. If Costco built in Henrietta, which is where they said they wanted to be near, they would not have received the breaks they got because Henrietta is not considered distressed.
Retailers can only get tax breaks if it's a tourism project. If it offers services not otherwise available in the area and if it's going in a highly distressed area. COMIDA says Costco meets the last two requirements.
Costco says it will create 225 new jobs with an average salary of $42,000. The entry level wage is $11 an hour with raises every 90 days. The company offers full benefits for every employee. Part-timers take a little longer to get fully vested.