The Schenectady City School District is suing to prevent the loss of more than $80,000 with the reassessment of a building housing a high-tech business.
The city of Schenectady last year settled a tax challenge brought by Worldstar LLC, the entity that owns the SuperPower building at 450 Duane Ave., lowering the property assessment from $5.8 million to $4.15 million.
City Corporation Counsel John Polster said the payment-in-lieu-of-taxes agreement with the Metroplex Development Authority dictates that Worldstar pays on a portion of the site’s assessed value.
“The question is: are those payments a tax, which needs to be refunded, or are they a contractual obligation that doesn’t need to be refunded,” he said.
Worldstar is currently in the 14th year of a 15-year PILOT agreement and its payment this year is based on 90 percent of the assessed value, according to Metroplex officials. The percentage of the assessed value that Worldstar makes its PILOT on increases by 5 percentage points each year until the PILOT’s final year in 2013, when the property would be assessed at 95 percent of full value.
If the PILOT must be refunded, then the school district would have to pay back Worldstar roughly $80,000 for 2009 through 2011.
Worldstar paid about $293,000 total for tax years 2009, 2010 and 2011. With the new assessment, they should only have paid $210,000.
The school district filed the lawsuit to prevent that change and named as defendants in the suit Worldstar, the city of Schenectady, the assessment board and the Schenectady IDA, which is listed as the owner of the building. The parties will meet in state Supreme Court on Aug. 21.
Polster said Schenectady will abide by whatever the court rules but he would prefer that the PILOT be determined a contractual obligation because the city has a number of properties that are bound by PILOTs.
Board of Education President Cathy Lewis said she was not aware of the lawsuit.
An employee who answered the phone at SuperPower, which manufactures high-temperature superconducting wire, confirmed that the business does not own the building.