The state comptroller in a recent audit criticized Yonkers Industrial Development Agency officials for failing to do cost-benefit analyses to verify that some IDA-backed economic development projects were viable and beneficial to the community. But a consulting economist for the city IDA who said he has “rigorously” analyzed some of the same projects cited by the comptroller”™s office found significant financial rates of return for the city and agency from projects receiving tax exemptions and abatements.
And Yonkers Mayor Philip Amicone, who chairs the city IDA, last week challenged the timing of the criticism from Comptroller Thomas P. DiNapoli while IDA officials countered some of the audit findings.
The state audit reviewed the IDA”™s approval and monitoring of seven economic development projects completed during a three-year period from 2005 through 2007. They included three senior-citizen and affordable housing projects; rehabilitation and restaurant construction at the Yonkers Pier on the Hudson River; construction of a Nissan car dealership on Central Avenue; the nValley Technology Center redevelopment on Nepperhan Avenue and the installation of video lottery terminals and construction of restaurants at Yonkers Raceway.
Among their findings, state auditors said IDA officials did not establish criteria or adequately document why they approved or denied project proposals. The Yonkers Pier and Central Avenue Nissan applications were approved even though the applications were incomplete, they said.Â
IDA officials noted the audited projects were approved before Ellen Lynch became chairman and CEO of Yonkers IDA in 2007. Lynch has begun a process of more fully documenting reasons for approval or disapproval of a project. But IDA officials said evaluation criteria must be flexible, taking into account the specifics of each project.
Auditors also found IDA officials did not adequately monitor projects to ensure they met or made reasonable progress toward their employment projections or other performance goals. For five projects audited, 971 of 1,161.5 promised jobs were created, a shortfall of 190.5 jobs or 16.4 percent, according to the comptroller”™s office.
Yonkers IDA officials, however, said the shortfall for all seven audited projects totaled 92.5 jobs.
The agency since 2007 has retained Marc M. Goloven, a former chief regional economist at JPMorgan Chase, as its economic consultant. Lynch, the IDA head, said his analyses of the compounded annual rates of return on the incentives extended by the IDA ranged from a low of 8 percent on a housing rehabilitation to a high of almost 30 percent on Yonkers Raceway. The IDA and city provided approximately $15 million in financial assistance to the raceway project and the city expects to recoup 14 to 15 times its initial concession in less than 10 years, she said.
Goloven last week said his financial analyses were “far different” from and more rigorous than state auditors”™ review of project application forms. “I feel that there was a significant rate of return on each of the projects I examined,” more than the city would have earned on money invested in five-year certificates of deposit or high-grade bonds, he said.
DiNapoli in a statement accompanying the audit questioned the IDA”™s reason for being. “If an IDA cannot prove that projects are worth taxpayer investment and if an IDA does not hold businesses responsible for not meeting their obligations, what is the point in having an IDA in the first place? This audit demonstrates that Yonkers IDA officials need to do a better job of ensuring that YIDA-sponsored projects can benefit the community by creating jobs or increasing the tax base,” he said.  Â
“In all of our projects, the goal is to make smart public investments that will attract private business to stay and grow in Yonkers,” Lynch said in response to the comptroller”™s criticism. “Any objective analysis shows that the Yonkers IDA is on the right track by supporting projects that foster economic growth, jobs, tax revenue and opportunity for our business community and Yonkers residents. We will continue to ensure that we get a rate of return that far exceeds our investments.”
Said Mayor Amicone: “It makes no sense that, at a time of significant economic recession, the comptroller has chosen to attack an agency that has undeniably brought substantial economic revitalization to the city of Yonkers. Now is the time to support, not undermine, agencies like the Yonkers IDA that work to bring, jobs, revenue and stability to our cities. Comptroller DiNapoli should be applauding the Yonkers IDA for helping to make our city a national model for economic recovery.”
