Published: January 11, 2008 08:54 pm            

INDUCON: Tax burden lessens as sales rise at industrial park

SANBORN — Property sales are picking up at Vantage International Pointe, which means taxpayers are paying less to subsidize the industrial park formerly known as Inducon.

After struggling for years to find buyers for parcels at the business park off Lockport Road in Sanborn, county officials say they are finally nearing a day when all 159 acres on site will be owned by private investors.

“We’re poised to have this park full in about two years,” said Sam Ferraro, the county’s economic development commissioner.

Ferraro’s estimate is good news for county taxpayers who have for years been picking up the tab for special district taxes owed on park parcels.

Those special district taxes — used to cover debt service payments incurred by the Town of Wheatfield to support the park’s development back in the 1980s — cost the county $305,000 in 2001.

Last year, because more private owners had assumed responsibility for a larger share of the special tax, the county’s cost at Inducon fell to $170,000.

This year, economic development officials expect the county’s tax bill at Inducon will drop even further — to between $32,000 and $34,000 — as more property sales close and more private interests start paying the $2,500 per acre special district tax along with applicable town, county and school district taxes.

“You’ve gone from a cost (to the county) of $1,000 a day to under $100 a day,” said NCIDA assistant director Larry Witul. “That’s a big jump.”

Inducon started out in the 1980s as a business venture involving a private group of investors and the Town of Wheatfield. The original project planners had hoped to develop the site as a shovel-ready development park where companies, primarily from Canada, would set up shop and do business in Niagara County.

The project went nowhere near as well as planned, leaving the private land holders with too few investors to cover the cost of the park.

Mounting property tax debt forced the site into foreclosure and in the late 1990s, following an unsuccessful auction of the property, the county, through the Industrial Development Agency, assumed responsibility for the park and all the financial burden that went along with it.

From 1999 to 2001, the county failed to sell a single parcel at the site, according to Witul. Part of the reason had to due with the burdensome price per parcel which, due to escalating back taxes, had reached upwards of $50,000 per acre. Another factor, according to Witul, was the lack of any sort of marketing program aimed at encouraging companies to give the park a look.

“If you are not out there knocking on doors, you’re not getting customers to come in,” Witul said.

The park’s outlook started to change in 2001 with the construction of Vantage International Pointe, a 50,000 square foot, multi-tenant facility that now houses the IDA offices as well as several private companies.

Two years later, with the arrival of Ferraro as the head of the county’s new look Office of Economic Development, a formal marketing plan was implemented in an effort to bring in those Canadian firms the project’s original planners had hoped to draw all those years ago.

Also in 2003, the IDA convinced the Niagara County Legislature to reduce the county’s per-parcel asking price at Inducon from $18,000 per acre to $5,000 per acre. As part of the proposal, the IDA agreed to turn over the entire amount of revenue generated from each sale to the county, giving up two-thirds of the cut it previously received for each property sale.

“It’s a small relief we are providing for a big return,” Ferraro said. “The intent was to put the park on the map.”

While the move met with resistance in some circles, evidence suggests it has paid off.

At the end of 2002, the last full year without a marketing campaign at Inducon, the county had sold 18 of the 159 acres on site, with three companies actively doing business there.

From 2003 through 2007, the county sold 106 acres and developed 40 more.

Now, 50 acres of available space remain.

Due to the increased activity, the agency has been able to up its asking price at Inducon, from $5,000 to $10,000 per acre in 2007 and to $15,000 per acre this year.

North Tonawanda resident and IDA watchdog Don Hobel, a long-time critic of the county’s handling of the property, said the progress is encouraging, but he’s quick to note, however, that while things may have improved, the county, and its taxpayers, suffered substantial losses at the property during the early years when tax payments at the park were running at $900 and more per day.

“The people paid a pretty good dollar for that property when you consider the amount of money paid for special district taxes over the years,” he said.

Economic development officials say new development at Inducon is helping to recover those losses and then some. Ferraro said companies doing business at the park represent substantial investments in cash, new construction and, most importantly, jobs. In addition, Ferraro notes that the town, county and school districts now receive property tax payments they were not getting in the days when there was no development at Inducon. He added that companies doing business there also have an impact on the local economy due to the products and services they buy from other area vendors.

“That’s the spinoff and the advantage and where economic development really kicks in,” Ferraro said.

All but 2,000 square feet inside the 50,000-square-foot Vantage International Pointe building are now occupied. One former occupant, the gourmet basket supply business, Saksco, has since moved across the street from the center and into a 24,000 square foot building it constructed on its own with help from the IDA. For the first time, park will soon be home to a business incubator building. The facility, to be built by former IDA Board Member David Chamberlain’s DRC Development, LLC, will occupy 16 acres of land and will make available 80,000 square feet of space to investors interested in doing business in the county.

With continued marketing, both foreign and domestic, Ferraro and Witul are hopeful the park will continue to realize its full potential and become more of a bonus than a burden.

“We’ve been doing what we should have been doing a long time ago,” Witul said.

        

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