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East Fishkill Lawmaker Calls Gap Inc. Bid For More Tax Subsidies 'Obscene'

State Assemblyman Kieran Michael Lalor of East Fishkill says he opposes new tax subsidies for Gap Inc., a company whose Fishkill distribution center went up in flames last summer. Photo Credit: New York State Assembly
Gap Inc.'s distribution center in Fishkill was the scene of a massive fire last August. Photo Credit: Google Maps

FISHKILL, N.Y. -- A state lawmaker is leading the charge against more tax subsidies for Gap Inc., the company whose enormous distribution center in Fishkill went up in flames last year.

The $9.7 million in subsidies have already been gotten preliminary approval from the Dutchess County Industrial Development Agency.

But Assemblyman Kieran Michael Lalor, R-C-I, East Fishkill, said he thinks Gap Inc. may have come to the well once too often.

“Taxpayers shouldn't be expected to keep footing the bill for endless streams of corporate welfare,” Lalor said this week.

"Gap Inc. has already received millions in overly generous taxpayer subsidies from New York state and from local governments," the assemblyman said. "Enough is enough. What's to stop the company from coming back to the taxpayers again or picking up and leaving when business considerations dictate?”

"Given all the subsidies Gap Inc. has received already, this latest request is bordering on obscene," Lalor said.

A public hearing will be held on the subsidies request at 9:30 a.m., Friday, Feb. 17, at Fishkill Village Hall, 1095 Main St., Fishkill. To reach Village Hall, call (845) 897-4430.

Attempts to reach Gap Inc. spokesperson Debbie Felix for comment yesterday were unsuccessful.

According to state police, a preliminary investigation by federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) experts found that the eight-alarm blaze was “incendiary in nature.”

The Aug. 29 blaze sparked inside and destroyed the 990,000-square-foot Building 100. Building 110, a 1.9 million-square-foot warehouse, was heavily damaged by smoke but was reopened about a month after the fire.

(As of this week, no arrests had been reported.)

Gov. Andrew Cuomo had told The Poughkeepsie Journal that Gap Inc. has assured the state that there would be no layoffs because of the fire and that workers would continue to be paid.

The center, located off Interstate-84, employs about 1,300 people, depending on seasonal needs, according to The Poughkeepsie Journal.

Lalor said Gap Inc. should be “applauded” for keeping employees on the payroll, but added that “it is worth noting that taxpayers already stepped in post-fire and gave Gap Inc. $2.65 million."

Further subsidies, he said, would “work as a tax shift, with other taxpayers picking up the bill.”

Gap Inc. applied for the latest subsidies after the facility's fire last year, Lalor said.

He pointed to financial industry reporting that suggests Gap Inc.'s “bottom line may have benefited from the fire.”

The assemblyman referenced a MarketWatch article from November 2016, in which, he said, “analysts explained that the destroyed merchandise had not been selling well.”

According to Lalor, MarketWatch quotes analysts as saying, "To oversimplify, it seems that not being able to sell the damaged product helped drive higher earnings than had the product not been damaged in the first place ..."

Lalor said that Gap Inc.’s “stock price went up after the fire.”

“We shouldn't hand the company more tax dollars. New York needs across-the-board tax cuts that will benefit all New Yorkers, not more corporate welfare aiding a few select companies," Lalor said.

In 2014 Gap Inc. agreed to create 1,200 jobs and received $12 million from the state in Excelsior Job Tax Credits, as well as a $7.9 million sales tax exemption from the Dutchess County IDA, Lalor said, adding that he has requested information from the IDA on Gap Inc.'s 2014 PILOT property tax deal.

Citing IDA data, Lalor said the average salary at Gap Inc. in Fishkill is $40,000, while New York taxpayers have given Gap Inc. subsidies totaling $28,012.42 per job.

Lalor said that number was reached by “totaling the 2014 sales tax exemption, the 2014 Excelsior tax credits and the 2016 post-fire payment and dividing by the 805 full-time equivalent jobs the IDA reports at Gap Inc.'s Fishkill site.”

Those figures don't include “the 1999 and 2014 PILOT or sales tax and mortgage tax breaks given in 1999 when the facility opened,” he said.

“If Gap Inc. receives the latest $9.75 million tax exemption taxpayers will have subsidized the site at a rate of more than $40,124.22 per job,” Lalor said.

Lalor is an entrepreneur and author who founded Iraq Vets for Congress. He works in the defense industry, and is a former social studies teacher, and a U.S. Marine Corps veteran of the Iraq War.

To read The Poughkeepsie Journal reports click here and here.

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