Dec 28
2023
J. Dale Shoemaker’s subsidy reporting
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Another year coming to a close. Another 525,600 minutes (almost) expired. As Jonathan Larson asked three decades ago: How do you measure a year?
It’s an especially tough question for a reporter like myself who writes about the economy and economic development. There’s any number of metrics — interest rates are up, now steadying; inflation is up, now slowly coming down; wages are up slightly; so is rent — but all of those numbers tend to miss the big picture. Are we in a recession? Or is the economy doing great and we’re just in a “vibe-secession,” caused by our own pessimism? Lord knows the national press, various analysts and the Biden administration have worn their fingers numb debating the question.
In lieu of abstract charts and Twitter debates, and because I write primarily about Western New York, I do my best to focus on more material questions. For example: Who is the government giving tax breaks to and what is the company doing with the money? How do those tax breaks affect local schools? What are the working conditions like at the factory, nonprofit agency or coffee shop? And are government agents seeking to lure jobs and investment to the region spending their resources wisely?
In January, for example, I wrote a deep-dive piece on how the state’s nearly $1 billion investment in the Tesla factory in South Buffalo delivered almost nothing that was promised. In exchange for a free factory, Tesla said it would manufacture its Solar Roof in Buffalo. I found that Tesla struggled so greatly to produce that product that it eventually brought hundreds of desk jobs to the factory to meet the state’s job requirement. Those workers — who help train the algorithm that runs Telsa’s self-driving cars — later announced a union drive. Tesla then fired several dozen from that division. On the other side of the factory, I wrote about how Tesla managers allegedly discriminate against Black employees.
Throughout the spring, I turned my focus to subsidies that Buffalo and several local industrial development agencies granted. There was the $433,000 in grants and tax breaks approved for a pair of fast food restaurants in Niagara Falls. Then $39 million for a supplier of the semiconductor industry to locate in rural Genesee County. Then $4 million for market-rate apartments and condos in North Tonawanda. Then $3 million for a defense contractor worth billions — the 14th tax break the Erie County IDA has given the company. And finally $17 million in state and local tax breaks for a developer who’s pledged to turn an old factory into apartments.
I wrote a few stories about the Brown administration’s financial support for Braymiller Market, a downtown grocery store, at a time when advocates said the city’s East Side is in need of more supermarkets and access to healthy foods. Even after community outcry, the Common Council approved for Braymiller a $563,000 forgivable loan, which came on top of millions in additional subsidies the store benefited from previously.
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I also sunk my teeth into the agreement New York signed for the new Buffalo Bills stadium, located directly across the street from the current one. That billion dollar deal included a weak relocation clause — meaning the Bills may not stick around as long as the politicians say they will — lax oversight and a community benefits agreement structured to give team owners Terry and Kim Pegula a tax write off.
In June, I published a two-part series unpacking how tax breaks are hurting some Western New York school districts. I reviewed financial reports for districts in Niagara, Chautauqua and Wyoming counties, finding that the IDAs there granted so many property tax breaks that the schools had thousands of dollars less to spend per student. I followed up that examination with a dive into the “false promise” of IDA subsidies and how the agencies are paid handsomely for the tax breaks they dole out.
In July I reported on a plastics company that circulated a fake scientific study — generated by artificial intelligence — as it sought tax breaks for a new plant. Nevertheless, the IDA granted the tax breaks.
This fall I discovered that a wastewater pipeline the Genesee County Economic Development Center was building for a major industrial park was likely to violate the federal Clean Water Act. That sparked a major lawsuit from one county against another and misleading statements from the folks at Genesee County EDC. Construction of that later caused multiple spills of drilling fluids near sensitive wetlands, prompting the feds to shut the project down. Those spills then got the Tonawanda Seneca Nation involved: The tribe is suing the federal agency that granted the Genesee County EDC a permit for the pipeline. How did Gov. Kathy Hochul, a major supporter of the industrial park, respond? With a $56 million infrastructure grant.
I ended the year with a story about about how IDAs around New York are eyeing the housing market, with Arabella Saunders from New York Focus. After lawmakers Hochul failed to adopt housing legislation this year, she issued an executive order that IDAs seized upon because they felt it gave them permission to subsidize housing developers carte blanche. We explored how those subsidies could have serious consequences for New York schools — and exist in a legal gray area. We’ll be keeping an eye on this story in 2024.
So, how should I measure my year? If there’s a cohesive narrative here, it’s that New York loves tax breaks. Vibe-secession or not, the subsidies flowed from government hands to developers and industrialists alike. I suspect the trend will continue in 2024 and I plan to keep watchdogging the people and agencies that shape WNY’s economy.
To everyone who read my work this year, I thank you. If you have any tips or questions for me, my line is open. Email me at jdshoemaker@investigativepost.org or text me at 814-215-0509. Happy New Year everyone.
