Lowes getting $3.5 million a year in Empire Zone benefits

The names of some familiar Big Box retailers have shown up on a list of Empire Zone beneficiaries after a Syracuse newspaper won a Freedom of Information lawsuit against New York State recently. The Syracuse Post Standard reported that a group of national chain stores including Lowes, Home Depot and Wal-Mart enjoyed an estimated $9 million in Empire Zone savings in 2005.

Lowes saved an estimated $3.5 million after receiving zone benefits for seven stores in New York State. They reportedly created 560 new jobs at the seven stores, although more than half were part-time. The company paid an average of $10.98 per hour, records show.

The Empire Zone program was intended to help non-retail businesses, but apparently the state has let some local governments give tax breaks to large retailers. Under the program, businesses in the zone can have their local property taxes refunded by the state as well as get a Business Tax Reduction Credit, Sales Tax Exemptions, Wage Tax Credits, Investment Tax Credits, Employment Incentive Credits, and Infrastructure Loans.

This doesn’t sit well with small retailers who are being hurt by state-subsidized competition. According to the article, Raby’s Ace Home Center, family-owned in Oswego since 1916, suffered when Lowe’s moved in three miles away.

“It’s a little frustrating when you are, in a sense, subsidizing your own competition, ” owner Robert Raby said. “We’re not anti-competition or anything like that. I guess we’re for fair competition.”

According to Livingston County Economic Development head Pat Rountree, however, such a scenario is unlikely to happen with the proposed Geneseo Lowes. Although the site is in a designated Empire Zone, state reforms in 2005 and 2006 have tightened up the rules on subsidizing retail he claims.

“Could Lowes file an application for Empire Zone benefits? Yes.” Rountree said. “Would it be approved under the 2006 rules? Highly unlikely.” That doesn’t seem so reassuring considering recent actions by the County Planning Board!

4 responses to “Lowes getting $3.5 million a year in Empire Zone benefits

  1. Not to disagree with your entire message here but I seem to recall previous blogs or printed columns that discussed “big boxes” paying minimum wage. In fact, I think that argument has been published more than once. At an average of $10.98 per hour, that’s approximately 88% higher than the new minimum wage effective July 24.

  2. The obvious answer is that this an average wage for the entire operation, including managers who make a lot more than $10 per hour. That means the entry level people probably make a lot less.

  3. I agree with you. But, it is unlikely if many, or any, are paid minimum wage.

  4. Wage data are zealously guarded by retailers. Even Wal-Mart, which has a whole army of opponents, has been able to keep this information private. I think it is likely that there are few Lowe’s employees making minimum wage. Unemployment rates are too low and public scrutiny of them is too high for them to be able to pay minimum wage. At the same time, minimum wage laws are critical to putting upward pressure on wages. That’s why big boxes work so hard to oppose increases in the minimum wage; not because they have a lot of minimum wage employees but because the whole wage structure is effected by an increase in the minimum wage. The minimum wage has fallen so far behind the poverty wage that there are relatively few full-time employees making that wage.

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