Statement by Schenectady County IDA on OSC Report

Statement by Schenectady County IDA on OSC Report

Contact: Ray Gillen, Metroplex
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Statement by Schenectady County IDA on OSC Report

Schenectady, N.Y., April 28, 2015 — We are pleased to comment on the report issued today by the State Comptroller’s office.

The OSC report makes three recommendations to the Schenectady County IDA (SCIDA).

First, the report suggests that the SCIDA include recapture provisions in the agreements it signs with companies.  The IDA currently has the right to cancel all project benefits if a project does not comply with job and investment goals or fails to report job and investment information to the SCIDA.  The SCIDA Board will review the suggestion that recapture provisions also be included in agency agreements.

OSC’s second recommendation is that SCIDA not provide benefits to “leasing agents.”  Schenectady County’s economic development team must be flexible in order to be successful. While some companies prefer to own their buildings, we often encounter companies that prefer to lease.  Schenectady County would lose jobs and investment to other counties and to other states if we limited our ability to provide SCIDA incentives to companies that enter into long-term leases.  A good example is CTDI, a company that we successfully recruited to the Glenville Business and Technology Park Schenectady County in 2013. The company is providing more than 500 jobs in a new $11 million, 151,000 square foot building that CTDI is leasing from a developer.  When a PILOT is involved, the lease is structured as a triple net lease so the PILOT payment is made directly by the tenant insuring that the benefit is provided to the tenant not the developer.  Ultimately the decision to lease or buy should rest with the company, not the county or the state, and as result, we do not plan to adopt OSC’s recommendation in this area.

The third recommendation in the OSC report involves PILOT payments. We agree with the Comptroller’s finding that accurate and timely collection of PILOT payments is important.  OSC looked at all PILOT payments for ten projects over 11 years (2003 to 2014).  During that period, we are pleased that OSC found that SCIDA PILOT payments were “made accurately or had only minor variances for nine of the ten projects reviewed.”

For the tenth project, OSC also found that all PILOT payments were made in an accurate and timely manner.   However, OSC did find that a penalty payment under this PILOT agreement was paid to both Schenectady County and the Town of Rotterdam, but not the local school district.   We disagree with this finding.   The SCIDA clearly outlined the additional PILOT revenues amounting to $584,625 to be paid under this agreement (see letter attached).  Schenectady County, the Town of Rotterdam and the Schalmont School district are all benefitting from these additional payments.

The final area addressed by the report involves job goals.  OSC’s report looked at ten projects.  For these ten projects, OSC found that five projects missed job goals by a total of 118 FTE positions based on a total job count of 6,033.5, a variance of less than 2%   The OSC report fails to identify the ten companies by name.

In SCIDA’s response to the OSC report, we identify all ten projects and we are pleased to report that job goals were exceeded by 515.5 FTE positions.

We were pleased to have State Comptroller DiNapoli visit several SCIDA projects in Glenville last April.  During that visit, the Comptroller toured new buildings built for CTDI and Old Dominion, plus an existing business (Dimension Fabricators) and said the following, “To facilitate and expedite the kind of approvals that the businesses needed to be located here really required such a dedicated effort and a responsiveness on the part of local government that frankly doesn’t happen in every part of the State.”

We are proud of the work of the Schenectady County IDA.  We appreciate the review of SCIDA operations by the State Comptroller and we look forward to working with his office in the future.