Lack of tax-sharing deal may doom Johnstown business park plan

PHOTOGRAPHER: Jason Subik

If the town of Mohawk and the city of Johnstown can’t reach a tax-sharing agreement for a proposed regional business park at a meeting scheduled for Thursday, leaders on both sides say the project probably won’t happen.

Mohawk Supervisor Greg Rajkowski said he’ll present his town board’s “final proposal” for revenue-sharing to city officials Thursday.

“We’ll see if they accept the offer,” he said.

The two municipalities have been trying to negotiate a tax-sharing deal to coincide with an inter-county land annexation of 352 acres from Mohawk into the city of Johnstown. The land would be used to expand the Johnstown Industrial Park on Route 30A.

The county governments of Fulton and Montgomery counties both back the idea of a regional business park, but the project can’t move forward until Mohawk and Johnstown agree on a tax-sharing formula.

Johnstown’s industrial park is nearly full and needs the land to continue to market the area to companies looking to build. Mohawk has the land but doesn’t have the water and sewer services Johnstown can provide.

Rajkowski said up until recently his town board had been adamant about requiring a 50/50 split of tax revenues from the park in exchange for allowing the land annexation. He said he’s now willing to lower the percentage cut for his town, but the sticking point he won’t compromise on is making the tax-sharing agreement permanent.

“Currently the state statute only allows revenue-sharing to occur over a maximum of 40 years. Right from the beginning of our talks, one of our requirements has been that we want the revenue-sharing to go on forever with no termination,” he said. “We know it will take our state legislators to change that law.”

Mohawk officials want the tax-sharing agreement to be contingent on new state legislation that would enable permanent tax-sharing for the two municipalities. Rajkowski said they also want the two sides to agree to pursue a railroad connection for the park and the railroad tracks in Fonda.

“That would be to alleviate some of the truck traffic through Fonda,” he said.

Johnstown Mayor Sara Slingerland said she is reluctant to agree to pursuing a permanent tax-sharing agreement. She said the expanded industrial park would be permanently within the taxing boundaries of the Fonda-Fultonville Central School District and as such would provide the residents of Mohawk with significant permanent school tax revenues in addition to a 40-year tax-sharing agreement for the town government. She said the Johnstown Industrial Park already provides about $1 million in tax revenues for Fonda-Fultonville and none for the Greater Johnstown School District.

Slingerland said if Mohawk holds out for a permanent tax-sharing agreement, that could be the end of negotiations between the two.

“These agreements have to makes sense for everybody. What I’m concerned about are the long-term risks and liabilities that we may be exposing the city to. For us the length of this agreement is a very large sticking point because we just cannot predict the future,” she said. “Once that park is established, the risk and the liability falls completely on the shoulders of the city of Johnstown.”

Slingerland said she would be willing to allow a tax-sharing agreement to start only when a taxpaying tenant actually moves into the park, giving Mohawk the maximum revenue benefit from the 40 years of sharing.

Rajkowski said the private owners of the 352 acres of land the city wants to annex have entered into option agreements with the Fulton County Economic Development Corp. to allow the EDC to purchase the land. He said he believes that unlike in annexations within a county, the private owners will not be able to petition for a land annexation between the counties without approval from the county and town and city governments involved in the transfer. He said he won’t reveal his new terms for dividing the tax revenue until Thursday, when he meets with Slingerland.

“We’re bending, we’re going for less of a percentage than we originally wanted to go for, but we really won’t be able to bend any further. It took me a while to convince the town board to even make a counteroffer,” he said.