Niagara Gazette

January 4, 2013

Hearing draws concern

By Justin Sondel
Niagara Gazette

Niagara Gazette —

Members of the public raised concerns Friday over a tax break for a Niagara Falls waste-energy company that has asked the county for help in supporting its expansion plans. 

Covanta Energy stands to receive a 15-year payment-in-lieu-of-taxes, or PILOT, agreement from the Niagara County Industrial Development Agency for $30 million worth of improvements it is planning at its facilities off of 56th Street.

The proposed tax break agreement is scheduled for a vote by the NCIDA Board of Directors on Wednesday. A public hearing held by agency officials on Friday at City Hall drew a handful of speakers, the majority of which voiced opposition to the county offering financial assistance for the proposed expansion. 

Henry R. Krawczyk, a resident who lives on John Road next to the existing Covanta plant, spoke passionately about the negative impacts he says the facility has had on the quality of life in his neighborhood, complaining about noise, air pollution and other concerns. He questioned why the NCIDA would offer tax breaks to a company in Covanta's line of work. 

"Why do we got to be the waste dump of the world?" Krawczyk said. 

Covanta has asked the NCIDA to support its plan to develop a rail transfer station that would allow the company to accept waste deliveries by train, including shipments of garbage from New York City. Other elements of the proposed expansion include a 190-foot tall smoke stack to act as a back up source of energy when there are gaps in waste deliveries, a mile-long steam line that would run between the Covanta facility and a new paper liner factory being built off Packard Road and a "special waste" building to be used in the preparation of waste for processing. 

Of the seven members of the public that spoke Friday, only one was in favor of the tax break. Russ Quarantello, the business manager for the International Brotherhood of Electrical Workers Local 237, said the tax break will be good for the area because of the construction jobs that will come with the new infrastructure. Provided, he said, that the company uses local labor.

"If it's their tax dollars, I feel that the jobs should go to local people," Quarantello said.

The PILOT includes a clause that requires the company to make a "best effort" to hire local labor, though there is no consequence in the agreement for hiring from outside the region.

Bill Rutland, the president of American Federation of State, County and Municipal Employees Local 182, said the same clause in previous NCIDA PILOTs has not stopped other companies receiving tax incentives from hiring out-of-state contractors. The language in the agreement isn't binding, Rutland noted.

"Who is going to police best efforts to use Niagara County labor?" Rutland said.

Supporters of the proposal have suggested that the expansion would not only benefit the local economy, but would be safe for the environment and surrounding community as well. 

James Regan, a spokesperson for Covanta Energy, said each load of "special waste" planned for delivery to the expanded facility would be inspected by a New York State Department of Environmental Conservation officer. He said "special waste" is an industry term used to describe loads that are not part of the company's municipal contracts and all materials in that category are non-hazardous. 

"It could be a range of things that are covered in our permit," Regan said.

The company has said that it will add 23 new full-time jobs, retain 86 full time jobs and create 160 construction jobs during construction. Covanta will save nearly $8 million in taxes over the 15-year period, but claim in their application to the NCIDA that the expansion will create $38 million in direct and indirect benefits for the community.

The deal breaks down to $347,000 in tax breaks for every new, full-time job created over the 15-year period and $73,300 per job when counting full-time jobs created and retained, though the company has shown no indication that it would be forced to shut down or reduce staff without the tax abatement.

Regan confirmed that the company had no plans to reduce staff or close down if the NCIDA doesn't grant them the PILOT. He said the jobs on site would be more likely to last into the future if the infrastructure improvements were made.

"Those jobs will be further supported with this investment," Regan said.

Amy Hope Witryol, a former state senatorial candidate who has investigated environmental issues in the region for over a decade, said the company's annual reports - including filings with the U.S. Securities and Exchange Commission - suggest Covanta doesn't need a tax break to expand. Witryol believes the company would go forward with the planned infrastructure upgrades regardless of the PILOT agreement.

"If the IDA approves the Covanta application the taxpayers of Niagara Falls, Niagara County and New York state will be asked to pick up an $8 million tab for stockholders of a New Jersey company," Witryol said.

Witryol said other municipalities where waste-to-energy plants operate receive host community payments or discounts with the company for waste disposal, neither of which the city of Niagara Falls will get as part of the agreement.

"The IDA application proposes instead that we pay Covanta for investments that it seems to be making in any case," Witryol said. 

Regan would not say whether the company would go forward with the investments or not if the company does not receive the PILOT agreement from the NCIDA.

"It has yet to be determined if all aspects of the project will move forward," Regan said in an email.

NCIDA Chairman Henry Sloma said he intends to support the deal. He said Covanta's investment does more than just create jobs, it builds energy infrastructure in a part of the city that is unappealing to most businesses.

"This will benefit everyone in that community," Sloma said.