Back in March, the Erie County Industrial Development Agency slammed the brakes on giving tax breaks to hotel projects following the uproar sparked by its handouts for a remodeling of the Millennium Hotel in Cheektowaga.
The critics rightly questioned the economic value of doling out tax incentives for what should be the normal cost of doing business for an existing hotel - replacing furnishings, carpeting and the like.
So the IDA went back to the drawing board to revise its policy on hotel tax breaks. In July, working on its own and without consulting the five other suburban IDAs in Erie County, the Erie County IDA came up with a new proposal. That proposed policy would that would limit incentives to only hotels that are built or renovated in conjunction with a convention center, conference center or a major regional attraction. It also would permit aid to hotel projects that meet the IDA's adaptive-reuse policy, which encourages renovation of vacant buildings.
The adaptive reuse clause was a significant loophole, because it opens the door to hotels in any site that reuses an existing building that's been vacant for a few years.
But that didn't satisfy the suburban IDAs, who within the last month met with IDA officials. They wanted more flexibility, and they managed to get an extra phrase added into the policy the Erie County IDA approved on Wednesday that allowed projects that were part of a neighborhood enhancement area.
Now that's a loophole! In Amherst, much of the town's prime commercial property is part of an enhancement zone. Want to build or renovate a hotel on Sheridan Drive between Niagara Falls Boulevard and the Youngmann Expressway? You're in, because it's part of an enhancement zone.
Want to build a hotel or renovate one on the west side of Transit Road, between the Thruway and Main Street? There likely will be some tax breaks waiting for you, because it's part of an enhancement zone.
Think there's a market for another hotel along Main Street. Pick the right spot and you'll be in line for some hefty tax savings, because wide swatches of Main Street are part of an enhancement zone.
So much for the crackdown.
- David Robinson