Suit to target state aid to businesses by Thomas J. Prohaska

Cohocton Wind Watch has contributed to this litigation and is part of the legal action.

A taxpayer group is planning a lawsuit against the state to try to prove state aid to businesses, sometimes called “corporate welfare,” is unconstitutional.

However, Lee J. Bordeleau of Lockport, the coordinator of Free Niagara, said he needs people willing to pony up $100 to pay for the lawsuit.

Attorney James Ostrowski of the taxpayer group Free Buffalo said he is researching the suit, which he said will try to enforce the provision of the State Constitution that bars the use of public money for private enterprise.

“We’re hoping to bring a suit to see if this language, which has been in the State Constitution in one form or another since 1846, actually means anything,” Ostrowski said.

Bordeleau, a stockbroker, earned some notice last year when he paid for a billboard on Route 78 in Lockport, calling attention to Niagara County’s status at the time as the highest-taxed county in the nation based on a percentage of housing value.

He said he has 20 people who have paid $100 each to start the suit, but he needs at least 10 more to make a contribution and lend their names as plaintiffs. He can be reached at 433-0574.

If his group wins the suit, everyone will get that $100 investment back, and the state will be responsible for court costs, Bordeleau said.

Ostrowski said the lawsuit was Bordeleau’s idea but one that he heartily embraces. Free Niagara is an offshoot of Free Buffalo.

“I have always believed for a long time that these sorts of grants were illegal,” Ostrowski said. “There’s various exceptions, but none of them apply to the types of corporate welfare we see today.”

Anita Laremont, senior vice president and general counsel for the Empire State Development Corp., saw it differently.

“Grants provided by ESDC are made in full compliance with the New York State Constitution and all applicable laws,” she said. “Grants funded by ESDC are investments for the benefit of the people of this state.

“Projects that receive funding from ESDC further a variety of public purposes, including economic development and job creation. As a result, grants made by ESDC generate significant corresponding economic and other benefits that are enjoyed by the public generally. These corresponding benefits outweigh any incidental benefit to private individuals or enterprises and help fulfill ESDC’s statutory mission.”

Ostrowski said his strategy is not to sue only the state, but about 10 businesses that are recipients of what he considers objectionable state grants.

“We’re going to pick what we think are the most egregious examples,” Ostrowski said.

Bordeleau said he thinks a prime target should be the $5.1 million the state supplied to the downtown Hyatt Regency Buffalo for a refurbishing project last year.

Stefanie Zakowicz, spokeswoman for the Buffalo office of the Empire State Development Corp., said that 2007 grant was split equally among pots of money controlled by the Assembly, the State Senate and the governor’s office.

Bordeleau also objects to the $650 million aid package the state cooked up to persuade Advanced Micro Devices to build a computer chip plant about 25 miles north of Albany.

Economic development agencies often argue that without such aid packages, many companieswouldn’t build in New York.

tprohaska@buffnews.com