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May 17, 2013 - 4:05pm

GCEDC attorney says COR Development subsidies perfectly legal

posted by Howard B. Owens in GCEDC, Batavia Towne Center, COR Development.

Press release:

“The Genesee County Economic Development Center requested and received a legal opinion regarding the approval of tax incentives for the COR Development project in the Town of Batavia as well as whether the project is legally exempt from new retail provisions recently passed into state law.

“We are pleased to announce that this opinion supports the recent vote by our board to approve these incentives as well as the exemption to the new law.

“The GCEDC strongly believes that this project will bring goods into the community that are not currently available to area residents. It should be noted that other tenants also will be opening in near future providing residents with other goods and services in what is currently a large vacant space located at the gateway of our community off of the I-90.”

“More importantly, the sales tax revenues that will be generated in just one year will be more than the incentives provided to the developer. The GCEDC was created to help create new jobs as well as bring new investment and revenues into our community. This project fulfills all of these criteria and without our assistance these benefits would not be realized.”

Downoad: PDF of Attorney's Letter.

Don Lovelace
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A legal opinion is just that an opinion. Some people have one legal opinion, while others have another. That is why we have courts to make DETERMINATIONS about legal opinions. The courts determine which legal opinion is correct or if neither is correct.

That was a really good try at scaring people off by inserting the word "legal" in your press release. It makes it seem almost official.

I can see them all now, throwing their hands into the sky, crushed because their protest is now meaningless because you secured a legal opinion. "OH NO, what do we do now, we lost."

Signed by:
Another one of those people of the general public that doesn't understand what the GCEDC does. (SMIRK)

Kyle Couchman
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Inspired by Don's comment and my own ignorance I decided to use my computer for some fact checking. What I discovered is that this is NOT a legal opinion, I will cut n paste the following for everyones edification.

In law, a legal opinion is usually a written explanation by a judge or group of judges that accompanies an order or ruling in a case, laying out the rationale and legal principles for the ruling.

Opinions are usually published at the direction of the court, and to the extent they contain pronouncements about what the law is and how it should be interpreted, they reinforce, change, establish, or overturn legal precedent. If a court decides that an opinion should be published, the opinion is included in a volume from a series of books called law reports (or reporters in the United States). Published opinions of courts are also collectively referred to as case law, which is one of the major sources of law in common law legal systems.

This letter does not seem to fall into this category, I just wonder if this legal opinion label is Howard's or from the GCEDC Lawyer. Further reading on this page does define properly what this letter can be described as...

Not every case decided by a higher court results in the publication of an opinion; in fact most cases do not, since an opinion is usually only published when the law is being interpreted in a novel way, or the case is a high-profile matter of general public interest and the court wishes to make the details of its ruling public. In the majority of American cases, the judges issue what is called a memorandum decision that indicates how state or federal law applies to the case and affirms or reverses the decision of the lower court. A memorandum decision does not establish legal precedent or re-interpret the law, and cannot be invoked in subsequent cases to justify a ruling. Opinions, on the other hand, always establish a particular legal interpretation.

The latter form of opinion is sometimes made available to the public either because of public pressure (see for example Lord Goldsmith's opinion on the Iraq War, Yoo memo), or because a general clarification of the law is called for (see for example, the Yorke–Talbot slavery opinion). In the United States, several state attorneys general issue attorney general's opinions.

So also since this did not come from the State AG office I am wondering if Don's assessment isnt correct. That this "opinion" is just a bluff to discourage most of us that are ignornat in the nuances of the law. Things to consider huh?

I plan on further research from my friend's computer since he has access as a Cornell Law School Grad to their reference material and address this further.

bud prevost
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Anyone find it humorous that an attorney from Monroe County represents the interests of the GCEDC?

Dave Olsen
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Oh well, then Never Mind.

Howard B. Owens
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This letter from the Harris Beach attorney is clearly self-serving. What else is an attorney hired by GCEDC going to say?

I would be much more interested in what the tax commissioner or comptroller's office has to say following an audit of the agreement, resolution and process to reach the decision.

The tax commissioner's address is Thomas H Mattox

NYS Tax Department
Commissioner Thomas H. Mattox
W A Harriman Campus
Albany, NY 12227

You can e-mail concerns to the Comptroller's Office at [email protected]. I would recommend including your full name and contact information to give any e-mail more credibility.

Residents can also complain to the Authorities Budget Office at [email protected].

Any of us can have an opinion just as valid and legally binding as the opinion of Mr. Shawn Griffin.

Here's the section of law that is most relevant to the debate:

"... the predominant purpose of the project would be to make available goods or services which would not, but for the project, be reasonably accessible to the residents of the city, town, or village within which the proposed project would be located because of a lack of reasonably accessible retail trade facilities offering such goods or services ..."

In my opinion, between Fisher's Sports, Barrett Batavia Marine, Hunter's Landing, Olympia, along with the sporting departments of Walmart, Target and Kmart, sporting goods are pretty well handled in Batavia. There's also an archery shop in Le Roy.

It takes a rather fertile imagination to believe that Dick's offers goods and services that are not already reasonably accessible in Batavia.

And lets not forget -- not addressed by Mr. Griffen is the fact that the GCEDC board did not know for certain at the time it voted on this resolution that the other retail outlets in the proposed development would be in anyway offer goods or services not already readily available. They were told who COR was negotiating with, but negotiation is not certainty. What if COR is unable to reach an agreement with one of these retailers? Do they fall back to another national retailer -- perhaps a liquor store or jewelry store or a restaurant?

More importantly, the public did not know who the other possible tenants were at the time of the public hearing. The public was denied any opportunity to debate and weigh in on the suitability of the other tenants.

Taking that fact to the next level: The public was also denied the opportunity to comment on what the GCEDC board was actually voting on as the resolution was not made readily available to the public prior to the vote. The public was denied any opportunity to comment on whether Dick's or any other retailer served an otherwise unmet need in goods and services.

One reason I went after so hard trying to find anything that would help us understand the intent of the legislature in passing a law such as this is it would help us understand the law better.

If find the law frustratingly ambiguous. As the 2006 comptroller's report I cited in my prior article states, the law is easy for IDAs to circumvent.

It's clear to me that the Comptroller's Office has consistently believed that the intent of the Legislature was to make approval of retail projects for tax abatements rare and few and far between.

My speculation, purely speculation, is that the Legislature believed there should be a high barrier to meet. Retail projects should only get abatements in cases where a community desperately needs the retailer. It should be a need, not a want.

I don't see how Dick's or Kohl's rises to that level.

At no point has anybody with GCEDC been able to step forward and prove that without these abatements, Dick's or any other retailer wouldn't come to Batavia. Even if you buy into the justification that Dick's some how provides something unique, why does that still make it necessary to expend tax dollars to get them to open a shop up here. Their executives have previously said they aren't interested in tax dollars to open a store. Their average store revenue and provite margins suggest tax breaks are entirely unnecessary to their profitability. The projected revenue and investment provided by COR suggests Dick's will have no trouble meeting those average numbers in Batavia. So why are these abatements even necessary? Other than facile assertions that they are, no evidence has been offered to support those assertions while there is ample contrary evidence that the tax breaks are wholly unnecessary.

The other frustrating aspect of this is I find near unanimity every where I go among people in our community: They don't want tax dollars going to this project. GCEDC is ignoring the wishes of the community and this letter from Mr. Griffen is just the agency thumbing its nose at us.

The ironic thing is, GCEDC didn't even need to have this public hearing or pass this resolution.

The state law only addresses state sales tax. There is no law or means of review for an IDA to approve PILOTs and local sales tax and mortgage tax abatements. COR could have gotten about 80 percent of what it got without all the ongoing controversy and debate. Those of us who adamantly oppose tax breaks for retail projects would have had a lot less to hang our frustrated opinions on if the EDC hadn't also included state sales tax abatements.

Mark Brudz
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What really frost me about this entire endeavor is this.

1. The sheer controversy around the COR [Dicks/Kohls] project has so enraged most people that I speak with that the prevailing thought is that ALL GCDEC backed projects are bad and ALL incentives and abatements are bad ergo, we should jump stop it all and sink or swim on our own.

Unfortunately, that is very short cited, long term jobs and meaningful paying jobs sprout from manufacturing, agricultural and warehousing type projects which IDA's were envisioned to help migrate to the county get swept up in the controversy.

2. The growing belief hat public authorities are the problem when in fact the intent of Authorities is to LIMIT government by developing public/private corporations that are singular in scope and purpose. In states like New York and California the authorities get so entwined with the government machine that they loose scope of their mission and grab for every piece of the tax dollar pie that they can, unlike similar authorities like in Texas and Indiana function autonomously and without tax payer funding and accomplish considerably more success and lower cost than our comparable authorities do here in New York.

The problem is NOT GCDEC, it is not that we have a thruway authority, it is our county and state legislatures for fostering an atmosphere where these agencies and authorities either are subsidized by tax dollars or pilfered of revenue to support non related state spending. And it is the state, which seems to have an unending appetite for money and a propensity to create programs that are not sustainable without an ever growing influx of tax payers funds.

I say it again, retail will grow or come here on it's own, both locally owned and big box if we focus on attracting manufacturing projects, IDA's in this state should be able not only to operate on the 1% stipend awarded for a successful project but grow to increase their value to a county or the state with being subsidized by tax dollars.

Because of the over reach by IDA's their successes are dwarfed by these controversies.

Big box retail has a relatively flat economic multiplier, in cases where retail is overbuilt a negative multiplier as opposed to manufacturing and agriculture that have economic multipliers of 4, 5 or even in some agricultural situations as high as 9.

We are now to the point where we are getting caught up in legal minutia and loosing site of purpose and ultimate results. I would rather see a complex of 5 mushroom facilities, yogurt plants and small to medium sized fabrication shops than a retail complex hoping that someone will stop over while driving down the thruway

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