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.