Calls on Albany to Stand-Up For Small Businesses Suffering in Queens
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Standing together with Ridgewood business owner Howard Mishler, Councilman Joe Addabbo pointed across the street at a Hess gas station which receives $13,761 in Industrial and Commercial Incentive Program (ICIP) monies.
“My business is suffering because of outsourcing and a bad economy, but a big international corporation like Hess gets close to $14,000 to stay in the neighborhood? I have been here for thirty-eight years, employ local people, and give back to my community. Gas is nearly $5 at the pump and the oil companies are busy lining their pockets at my expense. Our tax dollars and our representatives should be working for us, and they’re not,” said Mr. Mishler who owns AY-Host Paper Corporation.
A recent report by the Center for an Urban Future found that Queens leads the outer boroughs for job growth and overall economic development. However, despite employment increases of 80% in some Southern Queens neighborhoods, areas in the mid portion continue to lag. In addition, the 15th senate district contains almost half the ICIP businesses in all of Queens, receiving over $7 million in ICIP benefits in 2008. Despite a disproportionately high investment of ICIP monies, the Center for an Urban Future found that the district includes three of the lowest performing zip codes: 11385 (Ridgewood), 11379 (Middle Village), 11421 (Woodhaven).
A September 15th article in AM-NY reported that in 2008, alone, ICIP cost the city $512 million in taxes it otherwise would have collected. This is more than double the $190 million in 2002. The number of businesses taking advantage of the incentive also increased dramatically, from 3,868 in 2000 to 6,030 in 2008, city records show. Yet it was not until this past June that the state legislature approved an ICIP "reform" bill at the mayor's urging. Even then, the bill fails to address the underlying problems of ICIP by continuing to permit corporations and retail to receive subsidies. In addition the bill does not require job creation. Lastly, the Manhattan Borough President found that 75% of companies receiving ICIP monies would’ve proceeded with their projects regardless of subsidization.
“I’m proud that my Council District has seen record growth, but I’m concerned about our neighbors to the north. It’s appalling that the state continues to offer incentives to
corporate entities while family owned businesses close their doors. We need to end corporate tax breaks for companies, which outsource jobs and detract from our tax base. In these tough fiscal times we cannot afford to lose millions of dollars in revenue. I’m glad that Albany finally realized it’s time to get serious about small businesses, but for some of our residents it’s too little too late,” said Councilman Joe Addabbo.
Since 1984, when the ICIP began in an effort to spur the development or renovation of commercial or industrial properties, it largely has been chain corporations -- such as Rite Aid and McDonald's -- that have benefited from the rubber stamp program while small businesses suffer. According to the Center for an Urban Future the Middle Village area has seen an 8% decline in employment, while in Ridgewood the rate is double at 16%.
Companies that have received the most number of ICIP exemptions between 1984 and 2004 include: Rite Aid of New York, Inc. – 137, McDonald's Corporation - 112 , Amerada Hess Corporation – 41, ExxonMobil Corporation - 33 Amoco Oil Company – 30. However, an analysis of the low performing northern portions of the 15th senate district revealed that those companies receive a total of $286,650 in ICIP aid. A further analysis of all ICIP funded businesses in the 15th senate district reveals that companies such as Home Depot, Coca-Cola, and corporately owned gas stations, receive a total of $7,188,726 in ICIP aid.
The funding is broken down as follows:
Middle Village: $241,649,706, Glendale: $1,369,381, Ridgewood: $332,756, Maspeth: $1,632,628, Woodhaven: $95,237, Rego Park: $55,092, Elmhurst: $387,855, Howard Beach: $193,223, Ozone Park: $185,318, and Richmond Hill: $168,839.
Whereas some areas in the northern portion of the district have seen growth like Maspeth (15%), it pales in comparison to the southern portion in the 32 Councilmanic District represented by Joe Addabbo, which includes Ozone Park (80%), South Richmond Hill (49%), and Howard Beach (20%).
The New York City Economic Development Corporation conducted an analysis of the Industrial and Commercial Incentive Program (ICIP) in 2007, largely concluding that the program cost the city hundreds of millions of dollars per year in unnecessary tax breaks. EDC’s findings were particularly damning in regard to retail establishments that are eligible to receive subsidies under ICIP, concluding that the tax breaks are almost entirely a waste of taxpayer money.
Senate Democrats have repeatedly introduced measures to reform Industrial Development Agencies, all of which have been blocked by Senate Republicans. Such measures would curtail tax breaks for corporations that outsource jobs, and instead create permanent new jobs that pay fair wages.
