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March 29, 2013 - 5:24pm

If Dick's must come, local sports retailers think the big box store shouldn't benefit from tax breaks

posted by Howard B. Owens in batavia, business, GCEDC, Dick's Sporting Goods.

It's no sure thing that Dick's Sporting Goods is coming to Batavia.

First, there's no official confirmation that Dick's is the client COR Development Company has secured for the former Lowe's location.

Second, Charlie Cook, chairman of the Genesee County Economic Development Center Board, said it's far from a done deal that COR will receive more than $1 million in tax incentives to prepare the 138,778-square-foot space for a new tenant, whoever that may be.

If Dick's is the new game in town, local sporting outlets say they're ready for the competition; they just hope it's a level playing field.

The GCEDC board has yet to officially approve a trio of tax incentives for COR. The only action yesterday was to approve a public hearing for the project, which hasn't even been scheduled yet.

The board has been given scant information about COR's plans, Cook said, and without more information, the board isn't ready to act on the proposal.

"There is no commitment from the EDC for any sort of tax breaks or funding and there won’t be until we have a lot more information," Cook said.

This is the first big retail project that has come before the GCEDC board since Cook's been a member, he said, so he wants to educate himself on what projects like this mean for existing businesses before making a decision.

"I’m still learning," Cook said. "I’ve learned some things on the fly here and have been educated a bit on the impacts that some retailers might have that I hadn’t thought of. I haven’t formed an opinion yet."

Two months ago, a source told The Batavian Dick's Sporting Goods was planning a store at the former Lowe's location; however, repeated phone calls and e-mails to Dick's corporate office since then have been ignored by the corporate giant.

Dick's is a publicly traded company founded in Binghamton and now has 511 stores in 44 states. Annual sales in 2011 (the most recent numbers available) were $5.2 billion with a net profit of $1.6 billion, for a profit margin of 30.6 percent.

Those big numbers mean local retailers selling outdoors equipment and sporting goods face competition from a well-financed behemoth with significant market power.

That isn't scaring at least two local retailers who sell some of the same merchandise as Dick's, but the local owners are unhappy that a giant corporation like Dick's could benefit from any tax incentives given to COR.

Mike Barrett likened the practice of using tax incentives going to corporate chains to "using your own tax money to put yourself out of business."

Still, Barrett's Batavia Marine -- founded in 1955 by his father and uncle -- has been in the same location for decades and Barrett has seen a lot of upstarts come and go.

"We can compete in a lot of different levels they can’t," Barrett said. "Price is one thing and service is another. I knew about this coming for about a year, but we’ve outlasted a lot of other people, so … (Barrett shrugged)"

Kurt Fisher, whose store Fisher Sports is less than two years old, thinks he's found a local niche to serve and his new location in the Court Plaza (off Court Street) is doing well.

He isn't even particularly worried about Dick's potential for offering lower prices.

"The bigger issue for us would be they have more opportunity to have more stock because they have more money to bring everything into the store from every company," Fisher said. "We don't have that opportunity. Olympia (on Lewiston Road) doesn't have that opportunity. They (Dick's) can fill the store with everything, but that doens't mean their prices are good. That's their story everywhere. They have full stores but that doesn't mean they have the best price."

Fisher is ready to compete head-to-head with Dick's, but he doesn't think tax incentives should be used to give a big chain an advantage over local businesses.

"For the town and city to do that, it tells me they're more worried about the Big Box people compared to the smaller business people, for sure," Fisher said. "We don't get tax breaks and we're already in business."

Before today, Charlie Cook said he had no idea that Dick's was the potential tenant for COR. He doesn't even know now if the information is true. He said the GCEDC board was told the confidentially agreement prohibited even the GCEDC board being told who the tenant might be at this stage, even in closed session.

Who the tenant is could be critical information for the board to consider before approving incentives for COR, Cook said.

"I am interested in protecting existing businesses," Cook said. "I think when the facts come out, and more names are divulged (there could be more than one retailer moving into the former Lowe's location), if something isn't going to have an impact on local retailers and actually has attributes that benefit the local economy, you have to look at that differently than a business that competes directly with somebody down the street. Until we know more, we can't make that judgement."

Cook also acknowledged that taxpayers may have legitimate concerns to consider about COR receiving new tax incentives after receiving tax incentives in 2007 to construct the curent building for Lowe's, but "what it comes down to is we're staring at a big empty building and how can we put it to the best use."

Thomas Schneider
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"using your own tax money to put yourself out of business."

What a great quote, it should be the new motto for New York State.

Jack Dorf
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Howard, I believe your profit listed for 2011 is wrong. Their 10-K reporting for 2011 states gross profit of $264 million from $5.2 billion in sales. Approx. 5% profit.

Howard B. Owens
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Gross profit, taken right from the annual report.

EBIDTA (earnings before interest, depreciation, taxes and amortization) was $562 million, which is the number most corporate accountants pay attention to, but it's not as clear cut as gross profits.

Mark Potwora
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Before today, Charlie Cook said he had no idea that Dick's was the potential tenant for COR. He doesn't even know now if the information is true. He said the GCEDC board was told the confidentially agreement prohibited even the GCEDC board being told who the tenant might be at this stage, even in closed session.....Who are they to ask for a million dollar tax break and at the same time ask for a confidentially agreement..Hard to believe that the chairman of the board Mr.Cook had no idea that Hyde was offering COR a million dollar tax break..What kind of IDA works in such secrecy..What IDA keeps the chairman of the board out of the loop...Some one went and made this offer to COR...Who was it..Seems like they are walking back some of the facts that they put out earlier..Now they say that this was just about having a public meeting on the issue but give no date when this public meeting should take place.....When is Ms Hancock going to put the hammer down on her golden boy Hyde and stop all these property tax abatement's that hurt the local business owner..Remember those legislators who though it was ok to pay out those huge bonuses to GCEDC..They all thought it was allright to pay Hyde 200,000 dollars a year to give out tax abatement's that will put small local businesses out of business..

Jack Dorf
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I realize this but most people will see a 30% profit which is really not the case. Either way I am totally against any form of tax incentives for these large corporations.

Charlie Mallow
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Dick's is the only place on earth that sells T-shirts for $32 each.

Brian Graz
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Dick's will be a failure just as was Lowes. To give tax break incentives to these "local chains" in a declining and financially strapped community like Batavia/Genesee County is ludicrous. There are other Dick's stores near enough [4 in Buffalo, & 4 in Rochester] that it is not justified to have one here at the expense of the other already operating competing businesses.

If the new comer was a Bass Pro, or Cabela's, this would make some sense because there are not other stores near by and thus a Batavia location would draw from a much greater audience.

Maybe if we pay the folks at GCEDC better they would be a little more astute figuring these angles out. - LOL

Dave Olsen
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Brian, Mr. Cook said it at the end: "what it comes down to is we're staring at a big empty building and how can we put it to the best use."

It has the appearance of a failed project because of the money already spent on it and the round of back slapping about jobs and sales tax income forecasted that went along with getting it built, just a few years ago. Now, they just need to stuff something in it. They're starting to think like Albany and DC: spend our way to prosperity.

Mark Potwora
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great point Dave...Question for Mr.Cook....When did COR problems with tenants become the county tax payer problem.....Are they offering Dick's lower rent with the money they are saving by not paying taxes..What happened to the PILOT program...What is that amount that they will be asked to pay...I would of rather seen tax abatements on a building such as the Wiss in Leroy....Instead the county foreclosed for lack of paying taxes and took the building..Mr.Cook had no problem with that building being empty....Why didn't the GCEDC and Mr.Hyde give out tax breaks to the owner of that building..

Kyle Couchman
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I still would like to know when this supposed public hearing is and where on this proposed abatement....

Mark Potwora
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Kyle i want to know also..they said The GCEDC board approved the COR project being set for a public hearing, If they spent the time to approve the project for a hearing why didn't they set a date...Only that they are ok ing a date...I think it will take more people on this and other public forums to put the pressure on getting this denied....Also to keep complaining to county legislators about this abatement..Don't buy the pile of BS they are selling...GCEDC needs to have their hand in every business deal in this county to make them seem needed..And a tax break of this size should be taken up in front of elected officials who are accountable to us the tax payer..Not some unelected board such as the GCEDC..

Kyle Couchman
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I agree Mark, somehow we need to make the numbers that showed for the city trash issue look slim and really slam these guys. Cause this is going just a bit too far...

Dave Meyer
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One would think that Lowes MUST have had to sign a lease agreement with COR prior to moving into that space and consequently when they left early either they're either still paying on that lease or they paid a release fee to get out of it.

If either is the case, one could argue that COR has this money in the bank to defray the cost of modifying their building for any prospective tenant and has a lot of nerve asking for a SECOND tax abatement.

Mark Janofsky
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