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Is Xerox, which posted profits of $1.3 billion last year, getting a call center courtesy of taxpayers?

Xerox – after several weeks of mildly threatening to locate the call center elsewhere – decided to proceed with plans to renovate a portion of Building 200 in Webster. The call center would employ 500 people over two years and cost $4.3 million.

The company had already been awarded $271,000 in county sales tax breaks. But the state press release made clear what sealed the deal: a $1 million grant and $5 million in job creation tax credits.

If you do the math, $1 million plus $5 million minus $4.3 million means Xerox comes out ahead.

Lieutenant Governor Bob Duffy and County Executive Maggie Brooks seemed genuinely started when I pointed out the call center would essentially be free and questioned the accuracy of the state’s press release.

But both defended giving the project incentives.

“It’s not about giving anyone a free call center. It’s all about leveling the playing field for companies that want to stay here because they have a larger investment,” said Brooks.

“I can assure you that other governors in other states would be right there offering to build this,” said Duffy.

A Xerox spokesman disputed the idea the company would be getting a free call center. He tax credits are not cash and they are paid out after many years and only if Xerox creates and retains jobs. But the spokesman could not say exactly how much money the tax credits would be worth.

Austin Shafran, a spokesman for the Empire State Development Corporation, also said this is not a free call center. He said tax credits are paid out over 10 years and Xerox must adhere to its job creation and investment agreement.

“Only after verifiable proof has been demonstrated will the company get the tax credits,” Shafran said. “The tax credits are paid off over a long term period, get paid off over 10 years.”

Shafran says it’s not fair to compare tax credits with Xerox’s $4.3 million investment. I disagree because Xerox may not have moved forward with the call center without the incentives. Tax credits are worth money, whether Xerox realizes that savings up front or down the road. The fact is the company could eventually recoup its $4.3 investment.

As for the jobs being created, Xerox couldn’t say how much they would pay. Innovation Trail points out call centers don’t pay a whole lot. Also, Xerox is being rewarded for creating 500 jobs after eliminating 500 local jobs in 2011. (Two-hundred-fifty were outsourced to another company, much to the consternation of those workers.)

Whether the state foots the bill for some or all of this project, it’s clear taxpayers are paying a lot so a multi-billion dollar corporation can rehab an existing building to create low-paying jobs.

10 Responses to Free Call Center?

  1. January 26, 2012 at 6:58 pm Kathy Flood responds:

    Interesting. So tell me, what would happen to all the jobs in India? Have you ever tried to order xerox toner? Local jobs need more priority. I think it sounds shady. Good work, Rachel.

  2. Do you want 500 people to get jobs in Rochester or not? Even if these are $12/hour jobs that’s $1.2M a year that will be spent here and paying taxes here. It’s also 500 people off the unemployment rolls in NYS.

    What’s the issue?

  3. January 26, 2012 at 7:20 pm Richard Ross responds:

    I agree with you Rachel

  4. January 27, 2012 at 12:12 am James Simons responds:

    mike, the focus shouldn’t be just on this creation of 500 jobs. Sure any job creation is better than none, even if the jobs are low paying, as these will be.

    However, if you look at the big picture of Xerox then this call center is a blip on the screen compared to the jobs they have cut. The company has cut tens of thousands of jobs worldwide to create a profitable company. These were most middle-class jobs that paid a decent living wage and offered benefits. So the idea that 500 low paying jobs can make up for all of the better jobs cut here over the years is laughable.

  5. Sorry, I still don’t get it.
    · They transferred people to another company, would you have preferred Xerox lay them off instead?
    · These aren’t middle management jobs…very true but if Xerox had middle management job needs why are they laying them off?
    · Xerox is getting a tax payer funded facility here, that may be true and the alternative is they would get a taxpayer funded site somewhere else

    We will have 500 more people employed in this area and people are complaining? Ask the unemployed or people making minimum wage if they’re going to stay home to protest the “free” facility. My guess is you can ask them while they are standing in line filling out their Xerox applications.

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