Critics Call State's IBM Deal Risky

February 25, 2014 Updated Feb 25, 2014 at 12:30 AM EDT

By John Borsa

February 25, 2014 Updated Feb 25, 2014 at 12:30 AM EDT

BUFFALO, NY (WKBW) - Critics of the state's deal to invest $55 million to lure IBM to downtown Buffalo are warning that the interests of taxpayers are not being looked after.

"That's the problem," said Jennifer Diagostino, executive director of the Coalition for Economic Justice in Buffalo. "it sounds like a great deal."

But Diagostino said that is only if the jobs materialize.

IBM will bring 500 high paying jobs to Buffalo, but it could take up to five years before the company hits that target.

IBM has a track record of falling short on promises while taking taxpayer handouts, Diagostino said.

"So in the Hudson Valley it got $93 million in subsidies and then slashed more than 3,000 jobs," she said.

As for Gov. Andrew Cuomo, who announced the Buffalo deal in Amherst on Monday, the deal is the latest in a nearly $400 million investment to bring the technology and medical industries to Western New York.

"IBM is major international corporation. And this is a big, big deal," he told reporters following the announcement of the deal at Classics V banquet hall.

"Construction will start this year. We hope to have it finished by 2015. We're talking about a 100,000 square foot facility," he said.

The location of the downtown project has yet to be announced. Sources said a number of sites are being considered, but nothing is a done deal.

In addition to the $55 million in state money for the Buffalo IT Innovation and Commercialization Hub, which IBM will be the anchor tenant, the state is also investing in two other projects.

$100 million for the New York Genome Center with the University at Buffalo on the medical campus and $225 million for RiverBend on the Old Republic Steel site.

RiverBend will include nearly $1.5 million in private investment from two California energy companies.

State officials did not disclose how much IBM will be investing in private dollars.

Local politicians praised the deal, including Erie Co. Executive Mark Poloncarz.

"I think it's important we have a national brand," he said. "I think it sends a strong message to have IBM bring 500 new jobs to downtown Buffalo."