AFTON – Why would a successful company need taxpayer dollars to take over another business?
That’s what a group of roughly 20 Afton residents asked the county’s Industrial Development Agency Wednesday at a public hearing regarding an agreement that would give Owego-based Wagner Lumber a large tax break for purchasing a struggling saw mill in the town.
The group also wanted to know why virtually no one in Afton knew about the deal, why the required public hearing was held at 10 a.m. on a Wednesday, and how no one knew about that, either.
“This was a poorly advertised meeting. And it’s a very poor time. This is a working class town,” said Village of Afton Mayor Sally Muller. “I’m speaking as a citizen. In the future, if the issue concerns our town, and the village is in the town, we should know more about what’s going on.”

What’s going on?
In July, Wagner Lumber filed an application with IDA for a Payment in Lieu of Taxes Agreement (PILOT), a state-authorized deal that cuts property taxes by 50 percent over 10 years as an incentive for industrial-type businesses to keep or create jobs in a county.
Chenango County’s IDA, like the ones that exist by state law in most counties, is granted the power to issue the break without taking the issue to public vote.
Les Wagner, the lumber company’s owner, says the deal would “help” him purchase Pomeroy Lumber, a mill located in Ninevah, on the outskirts of Afton, that was damaged in June 2006 flooding and on the verge of closing, according employees and Wagner officials.
Wagner would save between $145,000 and $197,000 in county, Town of Afton, and Afton school taxes if the PILOT is approved, according to IDA figures.
Wagner has not officially bought the property, but lists Wagner-Ninevah as one of its corporate offshoots on its website.
The total purchase is worth an estimated $1.525 million.

A corporate give-away?
“We have a hard enough time paying our taxes as it is,” said Afton resident Mike Bernhard. “Now we’re going to give a chunk of them away?”
Bernhard asked how Afton could afford to relieve Wagner of tax dollars when the town already can’t afford emergency services, has a tight school budget, and a flood-damaged town highway garage that has yet to be fixed.
The IDA claims Wagner would create 14 jobs on top of an existing 30 and invest several million dollars into the business.
However, the IDA admits those jobs figures and investment projections were provided by Wagner, and not based on any concrete or independent analysis.
When asked if the decision to give Wagner a tax break would be based on the company’s “word” that it would improve the business and the area, IDA Executive Maureen Carpenter replied, “Yes.”
When asked if Wagner is held to any sort of performance standards that require it return payback taxes if it failed to produce, Carpenter said, “No, there are no clawbacks (way to recapture money).”
If a private company is getting a break on Afton taxes, Bernhard and others said they want more accountability.
“Wagner made the terms of the tax breaks,” Bernhard said. “There should be requirements for performance, not just numbers on a sheet of paper.
“They (Wagner) should make the investment first and then come to us looking for tax breaks. We should decide, not the IDA.”

A record of job creation
Les Wagner defended his application for the PILOT by pointing out the growth his businesses have seen since he started with two employees in 1970 and currently has over 200. He specifically pointed to his most recent acquisition, Wagner Hardwoods in Cayuta, where he took over a defunct mill and nearly doubled its jobs from 62 to 113 in six years. For that project, he received a similar PILOT agreement from the Schuyler County IDA.
“I can’t speak for the future,” he told the Afton residents. “But our history is that we have constantly added jobs and invested our own money into our businesses. I expect we’ll do the same here ... we’re not trying to rip people off for money.”
Carpenter said the abatement in taxes does not outweigh what Wagner can bring to the area.
“This is not a giveaway,” she said. “The IDA isn’t trying to hoodwink anyone. They can go and get this PILOT agreement anywhere. We want them to invest here, because they know how to grow a company.
“We’ve taken this application very seriously ... sometimes we have to make tough decisions. But we don’t say, ‘we like this guy, we’ll give him a tax break.’ It’s not that easy,” Carpenter said.
She added that the IDA checks in on under-performing PILOT businesses and has to give reports to the state.

The argument
Wagner attorney Jim Franz told the board that approving the PILOT would help save a saw mill (Pomeroy) that was “given up for dead” after the June 2006 flood.
“Why do they have to look to us for the money?” asked Afton resident Pam Wylubski. “We had seven feet of water in our house on Caswell Street; we didn’t ask for any money. This is hitting home. We were all affected by the flood and didn’t get any help.”
When asked if the break, which would save Wagner over $37,000 in 2008, was what he was depending on to buy Pomeroy, Les Wagner said, “It would help.”
When asked if he would have to lay-off workers if he bought the property and didn’t get the deal, he replied, “I really don’t know.”
When asked if would consider buying the property if he didn’t get the deal, Wagner said, “If I based it on the attitude of the people in this town, I might say no.”
However, Franz told the IDA that Wagner “embraced” the community and wanted to build a business here. He said while the company would receive tax breaks, it would keep roughly 30 residents employed and keep their income on the tax roll. He added that manufacturing and the jobs it creates would also boost Afton’s local consumer and supplier economy.
An employee at the Pomeroy mill said Wagner was saving him and his co-workers from unemployment.
“Even before the flood, Pomeroy was struggling to make ends meet,” said Calvin Talmadge, the manager of the Pomeroy mill. “If Wagner didn’t step in, it would be closed and off the tax rolls right now.”

The numbers
“Are we going to have to raise taxes just to satisfy the $35,000 bite you’re going to take out?” Afton resident Dwayne Kane asked the IDA at Wednesday’s hearing.
The IDA could not provide what, if any, per $1,000 dollar assessed tax raise the deal would reflect on the town, citing that no budgets have been created yet.
“We need those kind numbers,” said Pam Wylubski. “If it’s a one dollar per thousand raise that keeps 30 jobs here, that’s great. If it’s a five or six dollar per thousand raise, that’s a different story.”
Carpenter believes the increase, spread over county, town and school tax, would probably be minimal.
Mike Bernhard, however, says that Afton residents deserve more concrete, independent figures, if they are going to be asked to shoulder a burden.
“I’m not an economist,” said Bernhard. “I’m just a guy that is incensed over how non-elected bodies can run roughshod over communities like Afton.”

What public hearing?
Several Afton residents complained that the hearing was under-publicized and at a bad time of the day.
Many got notice from Bernhard, who passed out flyers over the weekend.
Notice of the hearing was provided in both The Evening Sun and The Tri-Town News, fulfilling the legal requirements.
However, many said the meeting would have been better attended if it were held in the evening. The IDA will consider a request at its meeting Oct. 17 to hold another public hearing.
When asked why the meeting was scheduled for 10 a.m., IDA chairman Hugh Kearney said, “Traditionally, that’s when we’ve always held them. In all honesty, we never had much of a turnout before.”
When asked if the low turnout may be due to the time, Kearney said, “We’ve never had the hearings in the evening.”

What now?
The IDA could approve the PILOT at its next meeting at 9 a.m. Wednesday, Oct. 17. The meeting is open to the public and will be held in the Commerce Chenango offices in the Eaton Center in Norwich.