When was the last time you vacationed at Costco?
When we heard Nassau County Industrial Development Agency officials are considering giving tax breaks to Costco to build a store in Oceanside because it would be a tourist destination, we kept waiting for the punchline. Because this obviously is a joke.
Giving tax incentives to retailers generally is bad business. Helping one store gives it an unfair advantage over others that do not get a break. Retailers typically offer low-paying jobs, not what our sluggish regional economy needs -- though Costco does pay better than most. And most retail stores likely would be built without tax breaks. That certainly seems the case with Costco, whose success story includes more than 650 stores worldwide, and six on Long Island.
State law bans IDAs from giving tax breaks to retail projects, but it contains three exceptions -- for projects located in distressed areas, offering services not available in the area, or related to tourism. The last one is the same notorious loophole Babylon Town's IDA used several years ago to give a boneheaded tax break to Tanger Outlets at the Arches in Deer Park. Costco received tax breaks last year from two upstate IDAs via those exceptions. One store in Rochester qualified as being in a distressed area; another in Syracuse was judged to be a tourist destination.
A Costco in Oceanside fits none of those categories. It likely would draw legions of shoppers, some surely from beyond the immediate area, but not tourists -- unless you consider crossing the border from Queens an act of vacation. It's great that Costco sees a profit-making opportunity in Oceanside and wants to transform the site of a former oil storage facility, but not at taxpayer expense.
The IDA should not grant the tax breaks, and the State Legislature should rewrite the law. Driving miles, even lots of miles, in search of bargains makes one a smart consumer, not a tourist.