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Kay Jewelers planning location in tax-subsidized shopping center

By Howard B. Owens

Despite the presence of two long-established local jewelry stores, national retail chain Kay Jewelers is planning a new store in Batavia Towne Center.

Syracuse-based COR Development has received $6 million is tax abatements -- to help finance the construction of the strip mall in 2006, and then remodel a portion of it in 2013.

Tax abatements for retail developments, which are authorized by Genesee County Economic Development Center, are controversial in New York and have been criticized by both Comptroller Thomas Dinapoli and Sean Ryan, a member of the Assembly representing Buffalo.

When COR sought its second round of tax abatements in 2013, the anticipated retailers going into the area once occupied by Lowe's were Dick's, Marshall's and Kohl's, though DIck's seemed to be the only sure thing at the time.

The GCEDC Board approved the $1.7 million in abatements with a finding that the tax relief would help bring new business to Batavia that would provide goods and services that are not readily available to local residents from current retailers.

It's important to note, that the proposed location for Kay's -- sandwiched between the AT&T Store and Sally's Beauty Supply -- is not part of that 2013 expansion and is not covered by the second around of abatements, though it is covered by the 2006 round of $4.3 million.

We've contacted a representative of COR Development for comment and have not received a response.  

Lease agreements are not public record, so we don't know whether Kay Jewelers is receiving a discounted rent bolstered by the tax breaks.

Officials at GCEDC were unaware of COR's intention to lease space to Kay and have not offered a comment on the plans.

Batavia is served by two locally owned jewelry stores: Valle's, on Jackson Street, and Lambert's, on West Main Street.

Jim Lambert said he's heard rumors for months that Kay was planning to open in Batavia and was disappointed to learn the new shop would be in a tax-subsidized development.

"Nobody gave me any tax breaks to open my business," Lambert said. "Everything we do, we do on our own. We don't get anything."

Kay Jewelers, with an advertising budget that includes radio, TV and glossy national magazines, plus the ability to heavily discount, absorb losses and give credit to high-risk borrowers will provide the local shops with formidable competition, Lambert said.

"For a place like us or Valle's, you just can't compete with their budgets for advertising and so forth," Lambert said.

He said he finds it interesting that Kay would open in Batavia, with a population of less than 25,000, when the chain is closing stores elsewhere.

"I'd be surprised if they could do $1 million here," he said. 

It's not like they don't have several other stores in Western New York already, he said.

"Personally, I didn't think it would actually happen," Lambert said. "I thought Kay's would be smarter than invest all that money in Batavia, but they afford to lose money for years and use it as a tax write-off. I can't afford to lose money."

The owners of Valle's wanted to get more information on the issue before commenting.

Besides Valle's and Lambert's, Kay will be competing with JC Penney and Walmart. Lambert noted that Walmart is already the largest seller of jewelry in the nation.

How much more can the market be divided and everybody still stay in business? Lambert wondered. Given the revenue demands of the chain, he said he will be surprised if Kay lasts in Batavia through two Christmas seasons, but in the meantime, the local businesses could be hurt substantially.

"It just kills the little man again," Lambert said. "It kills anybody who was born and raised in Batavia. It's going to cut into Valle's profits and it's going to cut into our profits and then they'll be gone in a couple of years."
Scott Ogle

"Despite the presence of two long-established local jewelry stores, national retail chain Kay Jewelers is planning a new store in Batavia Towne Center."

I'm not ready to condemn tax abatements for development out of hand, but this is not only wrong, but counter-productive as well. What are they thinking?

"Officials at GCEDC were unaware of COR's intention to lease space to Kay and have not offered a comment on the plans."

I see, just a tad reckless then.

Feb 6, 2015, 3:44pm Permalink
Mark Potwora

What do the county legislators have to say about this..They OK'ed labeling it a tourist destination so that they could hand out a tax abatement to COR..

Feb 6, 2015, 3:56pm Permalink
david spaulding

The corporate welfare that we have also called the "pick and choose" on this board. I try so hard to see how this helps us the laboring taxpayer and I can not. I am told this system will create jobs, Yes the old carrot being held in front of me of job creation. However when I look at the whole picture I see jobs at the local established mom and pop shops being lost. So when it is all said and done there is Not any more jobs then before the corporate hand outs.
Some how and some way there has to be a level playing field. If the corporate people are given a tax break then any and all local shops who are going to impacted by this corporate welfare should be given a tax break too.
To me the mom and pops are the real back bone to the local economy because the money stays here as with the corporation the money goes to stockholders and CEOs.

Feb 6, 2015, 5:03pm Permalink
Howard B. Owens

A point of clarification that may not be clear.

It's not surprising that the folks at GCEDC had no idea that Kay was planning to open a store. COR is under no obligation to inform or consult with GCEDC on who it is bringing in as tenants.

The tax abatements were blank checks. COR is free to run its mall as it sees fit. There's no obligation or restrictions on who they bring in as tenants.

Feb 6, 2015, 5:32pm Permalink
Dave Olsen

I will condemn tax breaks for development out of hand. Particularly retail development. High taxes are a huge part of the problem for anyone wanting to own a business in NY State. Giving anyone a break has to be paid for by someone else. Taxes will never be lowered until the burden is spread equally, then it can be lowered equally.

The only way I personally would accept tax breaks for new businesses is if the county budget was cut by the same amount. I don't see that as a great idea, but at least it doesn't expect established, long-paying local people to pay for someone elses benefit.

Feb 6, 2015, 5:53pm Permalink
Scott Ogle

Thanks for the clarification, Howard. The blank check aspect seems even more reckless and damaging to other established businesses. Collateral damage indeed.

Feb 6, 2015, 6:05pm Permalink
Lisa Schwab

I for one would stay with a local store like Lambert's and skip the big chain store. I have bought some amazing things from them. They give you one on one service and and make sure you leave with something amazing. They will work with you to find what you really are looking for. The things I have bought from them are all show stoppers and have the wow factor. They have an investment to make sure you leave happy. A big box store does not have that connection to people.

Feb 6, 2015, 8:05pm Permalink
Pam Desjardins

When my husband said he would upgrade my diamond last year we went all over the city of Buffalo looking. Kay's jewelers associates were not being upfront with me about the diamond I was looking at in their store. They didn't realize that I had done my homework. They were really out to rip me off! We finally asked ourselves why we weren't shopping local and went to the fine jewelry stores in Batavia. The one I chose was with the help of Tina Lambert who also did not know that I had educated myself. She was straight-up honest with me and very helpful. She focused on listening to what I was looking for and not how much Lambert's could profit from the sale. Jim was equally as professional and helpful. He brought in several stones for me to choose from and I couldn't be happier with my ring. I will never again shop at a chain jeweler - I don't know what I was thinking in the first place!

Feb 7, 2015, 10:36am Permalink
Raymond Richardson

At one time, people were happy with the corporate chains that started popping up in different industries, nationwide.

Start looking at some of those chains now. People have changed their mindset and are seeing the scripted customer service for what it really is: Increasing the corporation's profit margin, nothing more.

Many corporate chains have either gone out of business, are on the brink of going out of business, and/or have filed Chapter 11 or 13 bankruptcy.

I do as much business with local merchants here in Rochester as I can. I prefer the mom and pop retailers over the corporate chains.

When we eat out, 98% of our restaurant choices are local eateries over the corporate places. The decor, the service, and the food quality at the local restaurants can never be matched by a chain.

Hopefully, Kaye's will not succeed in Batavia.

Recently, I went to Lambert's to get an anniversary ring sized for my wife. Was much less than Kaye's in the Greece Ridge Mall wanted.

Feb 8, 2015, 3:33pm Permalink
Scott Ogle

"Was much less than Kaye's in the Greece Ridge Mall wanted."

That’s good to hear, Raymond. Usually the story goes the chain undercuts mom and pop. I get the impression that our locals are pretty savvy, though.

Feb 8, 2015, 5:03pm Permalink
Mark Potwora

In the end the only people to blame are we the people who allow A GCEDC to hand out these tax abatement....Blame your county legislators and state representatives for creating this mess....they allow these tax abatement to happen. Don't forget it was our county legislature that oked COR to get a new tax abatement by designating it a tourist destination..What joke..Blame your government ...

Feb 8, 2015, 7:27pm Permalink
Raymond Richardson

"It's been said, we get the government we deserve."

I always thought we get the Government whom we vote in.

Same though when you get right down to it.

Feb 8, 2015, 11:55pm Permalink

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