• The Rochesterian in Your Inbox:

    Join 638 other subscribers

We hear threats all the time from businesses wanting tax incentives from government. They threaten to move out of town. They threaten to not spend money on improvements. They threaten to close up shop.

Wilmorite, owner of Greece Ridge Mall, threatened to walk away from a redevelopment project if it didn’t get a PILOT agreement. The $12 million to $14 million project involved tearing down the Bon-Ton and replacing it with nice restaurants. The County of Monroe Industrial Development Agency said Wilmorite needed the PILOT to get bank financing.

Worried the mall would deteriorate, a tentative deal was reached among the town, county and school district.

Was the threat real?

A government official who didn’t want me to use his name said yes. One need only look at Irondequoit Mall, now named Medley Centre. Wilmorite built the mall and when it declined, gave up and sold it. The mall is still awaiting redevelopment. One could say Wilmorite gave up on Sibley, though that’s a bit more complicated.

Judy Seil, head of COMIDA, doesn’t like calling the Greece Ridge incentive plan a “tax break.” She said the mall is reducing its square footage by knocking down the BonTon, so it’s actually not taking advantage of what would likely have been a property tax reduction. I’m skeptical of that explanation, because if this wasn’t a tax break, why would Wilmorite need it in the first place?

Aside from serious questions about whether tax breaks for retail projects are wise, this entire episode begs other questions about malls in general and Greece Ridge in particular. America is discovering it built too many malls. People are shopping more on the Internet. In Rochester, we knocked down Midtown. Medley is almost empty. What’s the long term plan for Greece Ridge? Will restaurants keep it afloat or will it need more taxpayer support in the future?

Remember when East End businesses harshly criticized former Mayor Bill Johnson for subsidizing the High Falls entertainment district? They said the High Falls area was getting an unfair advantage.

What’s likely about to happen at the Mall at Greece Ridge Center is along the same lines. Wilmorite stands to get $3.6 million in property, sales and mortgage tax abatements over the next 30 years. Many restaurants in town (or their landlords) don’t get this kind of help, but we’ve gotten numb to subsidies for the big box retailers.

Unfair competition is one reason skeptics oppose tax breaks for retail. Another reason is the jobs are often part-time and pay low wages. Finally, unless retail is in an economically disadvantaged place, the development is likely to occur anyway. (Wilmorite has said in the past, it cannot do these types of mall upgrades and stay competitive in the industry without taxpayer help.)

Greg LeRoy of Good Jobs First said this country has a glut of retail space. “Retail isn’t economic development. The only time (incentives) are justified, is a neighborhood that’s been demonstrably red-lined.”

West Ridge Road, packed with businesses, isn’t a disadvantaged and isolated neighborhood. Meanwhile Greece and other municipalities and school districts are squeezed for cash.

A 2011 study found St. Louis spent billions on retail incentives with very few gains in jobs or sales tax. The problem is we don’t suddenly have more money to spend just because more stores open.

“If you want retail to succeed, make sure people have good paychecks,” said LeRoy.

But then you look at Medley Centre and ask, “If this project doesn’t happen at Greece Ridge, will we end up with another Medley Centre?”

I don’t know. But it’s legitimate to ask what is the role of the taxpayer.