Companies fall short at creating jobs

A state oversight agency has found that companies receiving financial incentives from industrial development agencies by 2012 had 1,642 fewer jobs across New York than they agreed to create when receiving IDA tax breaks five years earlier on their new construction, expansion or relocation projects.

The 280 still-active projects approved by IDAs in 2008 received nearly $183 million in financial assistance over the five-year period.

In Westchester County, companies by last year had created 82 fewer jobs than they projected when starting their IDA-backed projects in the recession year of 2008.

The state report did not include the Mount Vernon and New Rochelle IDAs, which had not filed their required annual reports with the state when the survey was conducted, and the inactive Mount Pleasant IDA.

The job-creation findings were included in the 2013 annual report released last month by the state Authorities Budget Office. The Albany office oversees 45 state authorities and 529 local public authorities.

Of the local authorities, 112 are industrial development agencies and 292 are local development corporations. The growing number of local authorities also includes urban renewal agencies, water and sewer districts, solid waste authorities, parking and airport authorities and eight land banks.

Officials at the oversight agency noted that public authorities have more than doubled in number statewide since the office issued its first watchdog report six years ago, when 281 authorities operated in New York.

Authorities Budget Office Director David Kidera in the report said his office this year took a longer five-year view of job creation numbers for IDA projects in response to claims from development officials that comparing IDA-approved tax exemptions for companies with changes in net employment after the first year of a project is misleading. IDA advocates have argued that job growth typically ramps up over the life of a project while financial assistance is often provided before the start of a project to spur business investment.

“IDA officials also claim that it is important to measure the success of a project over time,” Kidera noted.

In Westchester, the Peekskill and Port Chester IDAs each reported one company project still active since 2008. The Peekskill company”™s project created one job as promised and received tax exemptions valued at approximately $1.53 million. In Port Chester, a project that received $17,756 in tax exemptions created 25 fewer jobs than the 50 promised in 2008.

The Yonkers IDA reported two still-active projects last year that in 2008 were approved for tax exemptions valued at about $1.03 million. Those companies employed a total of 14 workers last year, two more than their projected job creation numbers at the start of the projects.

The Westchester County IDA in 2012 had two business investment projects still active after five years. The companies”™ combined employment numbers fell 59 jobs short of the 460 jobs they were projected to create in 2008.

Enforcing so-called clawback provisions in its agreements with companies, the Westchester County IDA recaptured $389,573 in sales tax exemptions from Nokia Corp. in 2012, when the company closed its regional office on the Platinum Mile in Harrison as part of a global consolidation. The IDA approved financial incentives for the Finnish mobile-phone company during its $30 million renovation project at 102 Corporate Park Drive in 2006.

Nokia”™s agreement with the IDA required it to employ 225 workers in Harrison in 2012. Other counties in the lower Hudson Valley region showed greater job-creation failures by IDA-backed companies in the last five years.

In Orange County, six companies that received a combined total of about $3.28 million in tax breaks from the Orange County IDA were expected to create 504 jobs. Instead, by 2012 they had 209 fewer full-time positions than at the start of their projects, a difference of 713 jobs between what was promised and actual employment.

The Rockland County IDA in 2008 backed six projects with tax exemptions valued at $748,364. By 2012 those companies had added eight jobs, after pledging to create 183 positions.