COMIDA & Public Pollution

Getinge Sourcing LLC May Receive Benefits

A public hearing is scheduled for 6:00pm tomorrow night regarding the possible receipt of COMIDA benefits by Getinge Sourcing LLC. The hearing will be held at the Henrietta Town Hall at 475 Calkins Road.

Getinge is asking COMIDA to assist in the renovation and equipping of a land parcel on East Henrietta Rd. including the reconfiguration of the manufacturing floor, building office space and constructing a new showroom. COMIDA will apply its standard set of mortgage and property tax exemptions.

Getinge Sourcing LLC has also drawn the attention of another organization.

PlanetHazard.com allows visitors to "learn about the unknown hazards around you - the toxins you may be breathing. PlanetHazard uses information from the EPA to map over 86,000 companies throughout the United States that emit hazardous air pollutants."

Getinge Sourcing LLC is listed in the Rochester area as an emitter of chromium, nickel and manganese.

PlanetHazard also displays a searchable map that allows users to pinpoint locations like schools, populated areas and parks in relation to the respective company.

100th Post: Your 5Linx Story

Takin' it to the Streets

Just over two months ago we relaunched the current version of the Water Buffalo Press. It is now 100 posts later and we would like to thank everyone who visited, read, commented and linked.

Our first post examined the company 5Linx, located in Henrietta, NY, and its worthiness of millions of dollars in funding and incentives given its employment of the suspect MLM business model. Today, this is still our most visited thread with the most recent comments coming just two weeks ago:

dj_paige said...
PyramidSchemeAlert.org? Why didn’t I think of that? This whole thread should be made widely available somehow -- perhaps by putting it on its own page with a catchy title so that Google can search for it, and people can find it.

On that note, with assistance from PyramidSchemeAlert.org, we have begun building a file for review on 5Linx and its business operations. We invite anyone who has had a 5Linx experience, positive or negative, to either post his or her story in the comments section below or email your story to waterbuffalopress@gmail.com.

Once the information is complied it will be submitted to the Federal Trade Commission and Office of the NYS Attorney General for review.

All of our 5Linx stories can be found in the COMIDA section of our archives. We thank you for your input, more to come -

COMIDA Announces Projects

Latest Round of Incentives

COMIDA has announced the latest incentives approved:

Linden Properties /Magnetics Technologies Corp. - Magnetic Technologies is a custom manufacturer of precision magnetic tools. It expects to create 50 new jobs with its $2 million project that includes the renovation of its 70,000 square-foot facility. It will receive sales and mortgage tax exemptions of $72,000.

Getinge Sourcing - A global provider of infection control equipment, the company is proposing a $4.2 million renovation at its Henrietta site. It will receive sales tax exemptions of $200,000.

Eastside Medical Urgent Care - offers after-hours medical services and is proposing an expansion of its Penfield site that would create 12 jobs. It will receive a tax exemption on equipment purchases of $113,000.

Silt Fencing - installation services for site developers. It will be purchasing $50,000 in new equipment and will get a sales tax exemption of $4,000.

AeroEd Inspection Services - inspection and reporting services for commercial aviation customers and is purchasing $91,000 in new equipment. It will receive a sales tax exemption of $7,280.

Durant Associates - asbestos abatement and will be purchasing new equipment totaling $200,000. It is creating two more jobs and will get a sales tax abatement of $16,000.

Durant Associates received incentives from COMIDA and the MCIDC in December of 2005. The incentives were also for a $200,000 equipment purchase of a crane. It is not clear whether any specific equipment was listed in the most recent application as information available to the public has yet to be updated. More as soon as meeting minutes are posted -

COMIDA Strikes Again

Allworx: 5Linx Redux?

Three things we can safely assume:
1. Maggie likes to smile and have her picture taken with giant ribbons
2. COMIDA simply subsidizes existing businesses in the area rather than attracting new ones
3. Telecom companies like to spell their names with an X

COMIDA announced today more tax incentives for an area business. This time the recipient is Allworx, and what do they sell? . . . oh lord . . . that's right . . . VoIP! And what do they see as their target market to spur growth . . . yep, small to midsized businesses. Sound familiar?

This is almost the exact same line we heard regarding the 5Linx benefits a month ago and, like the 5Linx situation, the site developer also receives benefits under the guise of the achievements of the telecom provider. What did Techniplex do to warrant multiple incentives for the same site? Like LeFrois Development, this seems like an instance of one company piggybacking on another for tax breaks. Essentially, Monroe County has now subsidized two companies offering the same product to the same market section.

The County has changed its tune slightly, however, and we would like to think that the comments of the WBP (along with its comrades like RochesterTurning in the local progressive blogosphere) made the County realize that we will not be misled.

Whereas the 5Linx release promised the creation of "high-paying jobs," this release states the Allworx expansion "has resulted in more good paying jobs in our community." This quote is a grammatical atrocity, but that aside notice that there is no allusion to job creation. Are we to assume then that COMIDA is now helping businesses without any projection of additional job creation? At the least Maggie has realized she can't make promises which she cannot deliver on, such as the promise of 133 high-paying jobs that will never materialize.

Fortunately, Allworx is no 5Linx; they operate under a traditional business model that uses compensated, salaried employees and their founders do not have questionable backgrounds like Craig Jerabeck of 5Linx, or suspect government ties like William Faucette of the 5Linx Millionaires Club. Additionally, Allworx does not target private consumers and its consulting branch, InSciTek, is well-recognized within the Rochester business community.

It cannot be forgotten though that, despite the apparent success of this business, the tax breaks will eliminate any growth in our commercial tax base that would benefit Monroe County residents by helping to ease their tax burden.

Maybe Maggie needs to go back to her high school economics textbook and review the definition of laissez-faire. Being a Republican, it's a concept to which she supposedly subscribes.

Note: All 5Linx articles can be found in the January archives

COMIDA Public Hearing

Project: Urban Focus, LP

COMIDA is holding a public hearing on Monday the 12th, at 9:00am when so much of the public is available to attend, at the Ebenezer Watts Conference Center on South Fitzhugh St. As we understand it, the County would lease the property to the developer but the release regarding the hearing contains the following paragraph:

The Agency proposes to finance the Facility by using its tax-exempt revenue bonds in an aggregate principal amount of up to $12,000,000 to pay a portion of the cost of purchasing and renovating the Facility (the "Bonds"). It is intended that interest on the Bonds will not be include as gross income for Federal income tax purposes pursuant to Section 103 of the Internal Revenue Code. The Bonds will be special obligations of the Agency payable solely from certain amounts payable under an agreement with the Company and certain other assets of the Issuer pledged to the repayment of the Bonds. THE BONDS SHALL NOT BE A DEBT OF THE STATE OF NEW YORK OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING MONROE COUNTY, AND NEITHER THE STATE OF NEW YORK NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING MONROE COUNTY, SHALL BE LIABLE THEREON.

If Monroe County assumes no debt through the issue of the bonds then the County Leg is nothing more than a pass through entity for the purpose of giving the purchasing entity tax breaks. Is this really the best use of this governing body and these incentives?

The release makes no mention of job creation, it is a simple private entity to private entity transfer with the interjection of the County. Would this transfer not otherwise occur without the COMIDA incentives? Doubtful.

Detailed financial information regarding the project is available at the public hearing, unfortunately a 9-5 job will prevent me from attending. Thus far WBP requests for copies of this info have gone unanswered. If there is anyone who can update, or who can translate the paragraph cited above, feel free to leave your comments.

Ultimately, what type of project is benefiting from COMIDA this time? Drum roll please . . . low income housing. That's right, low income housing - a development sector which already benefits from tax breaks and investment incentives at the town, state and national level.

Are We Supposed to Feel Better?

The D&C Henrietta blogger has posted his Final Followup on 5Linx and now everything is right with the world. Only -

- Spurred by articles at the Water Buffalo Press, 5Linx has applied for membership in the Direct Selling Association as a response to highlights here on the WBP that non-membership indicated questionable business practices by the respective entity. According to a representative from the DSA, 5Linx will not be accepted for membership as their application did not illustrate practices consistent with the strict guidelines of the DSA.

- As highlighted in our earlier article, Find the Red Queen, the supposed $6 million investment in the community is nonexistent as it can only be assumed, since exact figures are unavailable to the public, that $6 million has been returned to the company in the form of government investments and abatements.

- The championing of 5Linx as a leader in telecom is overstated, as 5Linx reps do not carry inventories; rather, 5Linx serves as a third party marketer providing website marketing materials (at a price) to direct sales representatives whose websites redirect customers to carriers.

- The pyramid nature of the business model is illustrated in the new jobs that will be housed in the expansion: According to Denise Nowak with 5Linx this inhouse sales team "provides quotes to small and medium size businesses that our independent representatives come across that would like to use our GLOBALINX service", (although the acquisition of leads from a supposedly independent representative raises questions about how independent this realtionship is) essentially these business leads are the most profitable and the 5Linx founders (the top of the pyramid, which includes ACN defectors) want to ensure that the profits continue to be weighted at the top of the structure. What is left for the independent reps to market to are private residential clients, undoubtedly less profitable than business sales.

All in all, the type of business that our region should brag about and subsidize?

Find the Red Queen: COMIDA, 5Linx & Trillium

Following a story broken here by the Water Buffalo Press the Rochester blogs have been abuzz lately with talk of COMIDA's questionable investment in the Henrietta based company 5Linx. The history can be reviewed in the Water Buffalo Press archives, what follows is a summation of information gathered so far by the Press and its sources -

County Executive Maggie Brooks held a press conference last week to announce COMIDA benefits tied to a project involving expansion plans for 5Linx. The press conference, as well as some reporting on the event, was misleading as 5Linx seemed to be the sole beneficiary of the benefits. In actuality the incentives were passed along to LeFrois, the development company building the office park expansion, the second such incentive they have received on the property according to an official with Monroe County.

Unconfirmed reports suggest that 5Linx heads may have felt "pressured' by the owner/developer but these sources wish to remain anonymous and statements were unclear as to the type of pressure applied.

Rochesterturning.com refers to high-ranking 5Linx officials with former government ties, this is likely a reference to William Faucette Jr., former Chief of Staff under Rochester Mayor Bill Johnson and founder of the 5Linx Millionares Club. Faucette is likely the individual who has posted to this blog under the user name positive1. There is no information that suggests Faucette used his ties to improperly influence the funding process, but his ability to set up tours of 5Linx facilities for local bloggers covering the issue raise questions about his relationship with the 5Linx founders and how strictly the company adheres to the restrictions placed on businesses employing the MLM structure.

5Linx received COMIDA incentives in October on the purchase of VoIP equipment, the very same equipment that is billed as their breakthrough in the telecom industry and the same equipment that was likely distributed down through the 5Linx network of independent sales representatives for a profit.

5Linx was also the beneficiary of equity from a branch of the Trillium Group in Pittsford that oversees the investment of funds drawn from the New York State Common Retirement Fund. Funds directed by the office of the Comptroller are reinvested in businesses, these investments range from two to five million dollars. The direction of state funds by a private firm is questionable as there is no way for the taxpayer/voter to hold the decisionmakers responsible, however the practice is common across the state and is the sixth such investment by this branch of Trillium.

The legitimacy of the 5Linx business model is questionable, as is any that employs the MLM structure, but concerns are only multiplied by 5Linx founder Craig Jerabeck's questionable dispute with Verizon that resulted in the downfall of his former company @Wireless and the fact that neither 5Linx nor GlobaLinx is recognized in the membership of the Direct Selling Association whose membership includes companies like Avon and Cutco. Additionally, quotes from Jerabeck regarding the cost of operating a business in New York state and references to North and South Carolina suggest 5Linx was considering relocation; in which case 5Linx likely misrepresented their intentions to secure funding from Trillium, as I would hope Trillium is not in the practice of investing New York state tax dollars in companies who plan to relocate.

While none of these activities or funding initiatives are outside the realm of law the return on the investment for the New York state taxpayer remains to be seen. In all 5Linx has promised to create over 150 jobs in return for the incentives they have received, time will tell if they live up to their end of the deal. The numbers, however, do not illustrate a benefit to our area. Quotes from Maggie Brooks cite the investment of $6 million in the community from the 5Linx expansion, but the combined COMIDA incentives added to the possible $5 million investment by the Trillium Group, drawn from the New York State Retirement Fund, totals over $6 million in funding and tax breaks returned to the company. All this equals a net loss for our community. In the coming days the Water Buffalo Press will attempt to discern what guidlines, if any, exist for the receipt of funding from COMIDA and Trillium. We will also highlight COMIDA funding recipients as many, like LeFrois Inc., have received mulitple grants over the past two years.

The Water Buffalo Press will continue to monitor the project's progress and report as neccesary -

5Linx Update

Company Not Recognized by Direct Selling Industry

Website membership searches of the World Federation of Direct Selling Associations and the U.S. Direct Selling Association do not yield search results for GlobaLinx or its parent the Henrietta, NY based company 5Linx. Each website, whose membership includes companies like Avon and Cutco, indicates that non-membership is a warning sign that the company in question may not be legitimate.

COMIDA's Numbers Don't Add Up

The County of Monroe Industrial Development Agency approved incentives for four other projects at its meeting.
They include:
HOLT ROAD INVESTORS It is proposing to construct a 9,300-square-foot child care center on the west side of North Ponds Park in Webster, creating 33 full-time jobs. The incentive package totals $126,000.
ROCHESTER LODGING ASSOCIATES The company is proposing to renovate the 98-room Best Western Rochester. It would create five full-time jobs. The incentives total $99,000. NORTH FOREST PROPERTIES It is proposing to construct a 13,764-square-foot building at 105 Canal Landing Blvd. in Greece that would create 30 full-time jobs. The incentives total $188,000.
THE BENNETT GROUP The consulting and training firm, which specializes in education, is purchasing $112,621 in mailing equipment to be used at its training facility. The incentives total $8,900. - As reported by the Democrat & Chronicle

Fresh on the heels of reports that COMIDA had to revoke incentives to certain companies for noncompliance comes the announcement of another $421,000 in tax break incentives for child care, a hotel and mailing equipment. I have a question - why does Rochester Lodging Associates receive incentives totaling $99,000 for the creation of five jobs while Holt Road Investors who is creating seven times the number of jobs only receives $27,000 more in breaks? Also, what mailing equipment costs $112,000 and why is the County helping The Bennett Group purchase this equipment? This does not strike me as an instance of giving incentives to prevent a business from relocating, rather, it appears like the public subsidization of a private entity.

5Linx - Legit or MLM Scam?

5Linx Gets Second Grant From COMIDA

The Democrat & Chronicle reported yesterday that COMIDA (which stands for the County of Monroe Industrial Development Agency and will be the subject of a story to come later here on the Water Buffalo Press) awarded a $600,000 grant to 5Link, a "telecom" provider based in Henrietta. The Henrietta Blog of the D&C praised the company for brining hi-tech jobs to the area, over 130 of them as reported. As I posted on the Henrietta Blog yesterday:

5Linx uses a business strategy called "MLM" or "Multi Level Marketing" to sell their "products;" what this essentially translates to is a Pyramid structure that recruits people to invest in a startup much like Tupperware or Cutco knives. They do not even sell their own products, they resell things like cell phone service and satellite tv. Much like the Fast Ferry founders and Maplestar, they receive millions in government funding and tax breaks under the guise that they will add "hundreds of jobs" only to see the C-level employees pocket the profits and split town. 5Linx currently employs 30 people and we are to believe they will add 130 in the next year through a work at home pyramid structure that forces their "employees" to recruit others? Neither COMIDA, nor Monroe County, nor the D&C, nor this so-called blogger have done their research and that is why our region continues to get swindled by moneymen who make big promises. Ever seen the Simpsons episode where the town decides to buy the monorail? - that's Monroe County and Rochester. Mark it down, 5Linx will never create that many jobs and despite what Maggie Brooks says in her photo "pat myself on the back for doing nothing" op this is not a company our area should brag about.
1/17/2007 4:55 PM

Another blogger, known as alocalbusinessman, posted that he has attempted to contact the HR department of 5Linx only to continually be routed into voicemails. Wouldn't a company poised to take on a massive undertaking such as the hiring of over 130 people at least need an HR department in place to oversee and train the employees?
But let's just say that 5Linx is legit and is as succesful as their C-levels would like us to believe, why then would they be in need of such a sizable grant from the government (the second such grant they have received)? One might answer to pay for the cost of the massive facility they are building in Henrietta, however, the building of the site was announced before the grant was received. By any measure, should our tax dollars be going to businesses so succesful that they expect better than 100% growth in the near future? Certainly a business so succesful would understand if we used 600,000 taxpayer dollars on something like education or our economically depressed City instead of a big fancy call center in a suburb that has no trouble attracting companies.

One of 5Linx claim to fame is the issue of Inc. 500 that names it as one of the fastest growing companies in America (based on projected hires that haven't happened yet), but even the magazine is skeptical about the methods employed by the company:

"What it does - Sells VoIP services and video phones to consumers and businesses through multilevel marketing. Why it's growing - The multilevel marketing model is designed to produce fast revenue growth. It also, of course, produces controversy in many cases. In 5Linx's case, CEO Craig Jerabeck says strong consumer interest in VoIP helps 5Linx sign up the direct sales representatives it needs to recruit."

There merits have come under the pretense of video-phone sales but an exploration of their website reveals that the basis of their business is the resale of cell phones, Dish TV and medical benefits cards. Last time I checked medical benefits didn't fit under the category of 'telecom.'

More to come -