Subsidy Sheet: State Taxpayers Lose $225 million to Athenex Pharma Boondoggle

May 26, 2023

File under stories you won’t read in the Downstate media: Buffalo-based Athenex biopharma has filed for bankruptcy. Athenex was hailed as a “game-changer” by profligate corporate subsidizer Andrew Cuomo, who pumped $225 million of our state tax dollars into the company as part of the Buffalo Billion debacle.

The dismaying thing is that the joke is on us, New Yorkers who pay taxes and rely on government services and investment. From day one, it was obviously economically and fiscally idiotic to spend $200 million in state tax dollars building Athenex a new pharma factory in Dunkirk, New York. The town is far from transportation hubs and big labor markets. Further, the math for this deal never worked for state taxpayers, who at best would have been paying $1 million per new factory job.

Will New York State government learn anything from the Athenex fiasco?

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New York Corporate Giveaway News:

  • ESD handed out $112.9 million throughout the Capital Region for projects targeting “blight.” Blight designation is fraught with controversy, hard to define, and subject to abuse by agencies, including ESD. 
  • The NY Power Authority allocated more than 66 megawatts of low-cost power to private firms this week, including Plug Power, which is located at the heavily-subsidized STAMP site in Genesee County. Plug Power already has one of the biggest subsidy deals of any business in the state at $4 million per job created.
  • “Let’s blame AI” makes for tasty tabloid fodder, but this Albany bill is going nowhere. The state’s $7.7b tax film/TV production credit reimburses 30% of production expenses with your tax dollars and has zero to do with “AI” or computer-generated VFX or characters. Still H/T to the writers union, which is on strike and knows where to squeeze.

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Fun Fact: There is no requirement in the New York State constitution that spending or public policy be based on facts or that, by default, our government has to tell us the truth.

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If you got this from a friend, sign up here. Subsidy Sheet is written by Elizabeth Marcello and John Kaehny.