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Xerox and Webster at odds over tax breaks
Webster, N.Y. --- The Town of Webster and Xerox appear to be at odds over a proposed expansion and the company’s current assessment. The former comes with an application for various tax breaks and incentives; the later is a lawsuit pending in court.
"I am absolutely all for tax breaks for 190, 200 jobs but when you get a corporation like Xerox that's got $22 billion in sales,” Town Supervisor Ronald Nesbitt said. “And they're asking my residents to fork out more for tax breaks I have a problem with that.”
"While I understand how people feel about this for us it's a little bit less emotional and it's more business facts,” said Xerox Property Manager John Farnan.
The Proposed Expansion
Xerox plans a $5 million expansion to its toner plant, building #216. The expansion calls for adding 50,000 square feet to the existing building and the company plans to invest $30 million in manufacturing equipment.
The application to COMIDA (County of Monroe Industrial Development Agency) lists XEROX as employing the equivalent of approximately 5,987 full time employees in Monroe County. This expansion project is expected to yield 25 new jobs, yet the “job creation requirement” number is just four jobs. The project is also expected to create about 70 temporary construction jobs.
The proposed incentives include providing Xerox with a sales tax exemption on all materials purchased for this expansion. COMIDA estimates that to total about $160,000. There is also a 10-year PILOT (Payment In Lieu Of Taxes) agreement that would reduce the tax rate Xerox pays in the first decade after construction. An estimated value of that incentive is $281,000 for a total incentive package worth about $441,000.
COMIDA estimates that Xerox will pay about $776,000 in taxes over the course of that ten-year PILOT. That equates to an average annual payment of $76,000 that would be divided between the County, School District, and Town.
The company has said they are considering a number of different sites for this expansion as they ship toner products globally and a Webster location is not absolutely necessary.
"Xerox is simply applying for something that's available to it as a competitive advantage to try and decide where we can place our plant,” said Farnan.
"We have the opportunity for a $5 million investment in real estate, $35 million in equipment going into the facility, the promise of at least 25 new jobs,” Judy Seil the executive Director of COMIDA said. “We're looking at it from the standpoint of we're in a competition, they've got off shore alternatives and we have to put our best foot forward.”
"You going to move it some place else without tax breaks? Ok. Try it go ahead, if you can move it move it,” countered Supervisor Nesbitt. “But I don't think so I think this is a bluff, I think they'll build it if we don't give them the tax breaks.”
Assessment Battle Ongoing
Supervisor Nesbitt contends that the timing of this application is poor considering the time and expense his town, school district, and lawyers are spending on a lawsuit Xerox filed against Webster. The lawsuit stems from a dispute over the assessed value of at least three properties on the Xerox campus.
Nesbitt said the company is paying taxes on those properties at an assessed rate of $15-per-square foot. He said that was the standing rate set by courts many years ago but now Xerox is asking to have its assessment lowered to $5-per-square foot on those properties.
“I bought a new home, 1,500 square feet, $195,000 that's $130 a square foot on new construction,” explained Nesbitt while comparing his own situation to Xerox. “And here's a corporation in town worth $22 billion telling me that their buildings are worth $5 a square foot, I don't believe it.”
The Village of Webster stands to gain revenue with the above expansion in the form of more sewer fees. Yet Mayor John Cahill said he stands by Supervisor Nesbitt on this issue. The Mayor also said he thinks the practice of corporate tax breaks should be reviewed.
"I would like to see the threshold be a lot higher than just 10 or 15 jobs to receive significant tax abatement,” said Mayor Cahill. "I think that it's definitely something that needs to be looked at and the impact on the taxpayer needs to be put at the forefront that's my feeling on it. I agree with a lot of people that are starting to take notice and look into these things.”
"Essentially the town and Xerox tried to sit down and talk some time ago and apparently it didn't go as well for either side and in fact we did bring suit against the town,” said Farnan of the ongoing tax assessment lawsuit. "We are the biggest taxpayer in town and oh by the way I think we use the least amount of services they don't plow our roads, they don't cut our grass, we do all that ourselves.”
The COMIDA board is scheduled to meet at 11 a.m. on Thursday in the county’s Watts Building on Fitzhugh Street to conduct a final vote on the Xerox application.