Posted on July 9, 2019
The Bundles of Money at Hamburg Development Companies
By: Sean Doyle, Hamburg Development Companies
Sorry folks, not the case. Now that I’ve got your attention, let’s talk about what tax incentives are and how they work. Industrial development agencies like the Hamburg IDA are often scrutinized for recklessly dolling out tax incentives to rich investors who are overdeveloping our Towns. Our region faces many, many challenges with regard to business development. Since late 2018 we’ve lost over 1000 jobs in Western New York.
The Hamburg IDA is working to increase tax base and employment options for our residents. is How We do it.. First, we seek out qualified businesses or developers to invest in our community. We tout the benefits of the area and explain why their project would thrive here. Next, we work with them on their financial model and see if we can get them to the Hurdle Rate. This is the return amount that inspires the investor to go forward with the project. Last, if that rate cannot be accomplished, we look towards incentivizing the project to make it happen.
For example, Immaculata Academy, the project site is a vacant school that sits abandoned for over 3 years now. The proposed multi-family project is encumbered with environmental remediation of the asbestos in the building, downsizing due to wetland requirements, decreased revenue due to zoning covenants. The Hamburg IDA is able to help the owners achieve that hurdle rate by discounting taxes for the first 7 years of the project. With the Hamburg IDA incentive of about $1.5 million, the region gains about $4 million in regional benefits largely property tax and sales tax revenue. The owner’s incentive draws down over that 7 years. In year 8 the owner pays the fully assessed tax amount. New jobs are created and a great housing option is available to the Town.
So the bundles of money are not there. Our focus is to drive development in a rigorous and responsible approach for our taxpayers. For more information contact Hamburg Development Companies at 716-648-4145 , on Facebook, or on the web at www.HamubrgIDA.com.