New Era to leave Derby, facing criticism after nearly two decades of tax incentives

For most of the past 25 years, New Era Cap Company was on the receiving end of tax incentives through agreements with Erie County and the Town of Evans. Tuesday, it announced plans to shut down its manufacturing plant in Derby, catching the town and county by surprise.

Mary Hosler, Town of Evans Supervisor, outlined the specific incentives the company has received since 1993 for its location in Derby.

New Era Cap Derby location was involved in two pilot agreements for most of past 25 years. In 1993, company only paid 20% of its county, town, school tax bill. Was paying 90% in 2016 when last agreement ended. #'s from Town of Evans. @WKBW pic.twitter.com/oBJ0dyVhhA

— Josh Bazan (@JoshBazan) November 14, 2018

One pilot agreement ran from 1993 to 2007 and covered the main property at 8061 Erie Road. New Era only had to pay between 20 and 50 percent of its annual property tax bill to the county, town and school district over that period of time.

A second pilot agreement was reached for 2012 to 2016, after the company paid its full tax bill for four years. In that agreement, New Era paid between 70 and 90 percent of its total tax bill each year. The agreement covered five pieces of property in Derby.

"Erie County, Town of Evans, the school district and the employees all took short-term financial cuts," Supervisor Hosler said. "New Era Cap is picking up and leaving. Well, we didn't realize the long-term gain yet. The town, the school district, Erie County, because now their tax abatements went away in 2016."

These type of tax incentives are pretty common and a spokesperson for New Era says they have nothing to do with the planned closure of the Derby plant. The company, instead, points to a need to adapt to a changing industry.

New Era released a statement Tuesday which reads in part:

This contemplated decision is part of the Company's ongoing effort to more closely align its business model with its competitors in the global sports, lifestyle and apparel industry by moving away from owning and operating manufacturing plants.

"I feel like they've given up on the town of Evans and we never gave up on them," Supervisor Hosler said.

To read more about the plant's planned closure, click here.

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