Buffalo – Assemblyman Pat Burke, Chair of the New York State Assembly Committee on Cities, announced legislation today that would prevent Empire State Development and other entities operating under the New York State Urban Development Corporation Act from granting property tax exemptions or PILOT agreements benefiting private development projects in cities without the approval of the city council or equivalent local governing body.

Burke introduced the legislation in response to Empire State Development’s proposed redevelopment of the former Aud Block at Canalside, where the State is proposing a $225 million dollar development, with $197 million - or 88 percent - coming from taxpayers. The project is centered on a 30-year tax exemption, meaning the privately developed property would not go onto Buffalo’s tax rolls at its full value for three decades.

“Explain to a homeowner in Buffalo why they should pay every dollar of their property tax bill while New York State cuts a special deal for an out-of-state company with $5 billion in assets,” Burke said. “If Albany wants to saddle Buffalo taxpayers with the cost of subsidizing a multibillion-dollar company, the people who actually live here should have a say before that giveaway is made.”

Burke said his legislation is based on a simple principle: Albany should not have the power to give away local tax revenue without local approval.

Under Burke’s bill, before Empire State Development could approve a property tax exemption, abatement, PILOT or similar tax benefit for a private project located within a city, the city’s legislative body would have to approve the agreement following a public hearing.

At least 30 days before that hearing, ESD would also have to publicly disclose the project’s expected market value, the property taxes it would otherwise owe, the value and duration of the proposed tax break, the total amount of city tax revenue being forfeited, all other anticipated public subsidies, and — critically — an explanation of why the project supposedly cannot proceed without taxpayer assistance.

“If this is such a great investment, put the numbers on the table,” Burke said. “Tell taxpayers what the property is worth. Tell them what the developer would normally pay in taxes. Tell them exactly how much money taxpayers are giving up. Tell them every other subsidy the developer is getting. And then explain why a company worth billions of dollars needs working families in Buffalo to assume its risk.”

Burke also questioned the economics of spending approximately $1 million per residential unit to construct new housing in a region where existing homes can be purchased for a fraction of that amount.

“Politicians keep telling middle-class families that there isn't enough money to make their lives more affordable,” Burke said. “Then somehow there is always another tax exemption, another subsidy and another special arrangement available when a wealthy developer comes to the table. That is backwards.”

Local Tax Dollars Require Local Consent

• Burke’s legislation would amend the New York State Urban Development Corporation Act to require approval from the governing body of any city and county whose property tax revenue would be reduced by an ESD tax arrangement benefiting a private project.
• The bill would also prevent ESD from circumventing limits that apply to locally approved tax incentives. If the State wants to provide a tax exemption longer than the city itself could ordinarily authorize, it would require approval from the city’s legislative body.
• The legislation would not prevent ESD from investing in economic development, providing grants or loans, financing projects, or maintaining the traditional tax exemption for property actually owned and used by the State for a governmental or public purpose.