Alternative tax deals net Schenectady County nearly $15M

Local governments in Schenectady County received $14.83 million in revenue last year from property owners who don’t pay taxes but have agreed to payments in lieu of taxes agreements instead.

The figure was up 4.6 percent from the year before, when 48 PILOT agreements generated $14.18 million in revenue. There were 53 PILOT agreements in place last year. The increase was smaller this year than last (revenue increased a hearty 53 percent from 2012 to 2013) because one of three sizeable agreements on General Electric’s Niskayuna property expired.

Locally, PILOTs are typically set to last 10 or 15 years, with payments increasing over the term. Once they expire, the property is placed on the assessment rolls and the owner pays the full taxes that result.

“These are good, solid revenue generators for the community,” said Ray Gillen, chairman of the Schenectady County Metroplex Development Authority, which administers the agreements. “Most of these projects were built at vacant sites that paid nothing or paid little, so we’re getting substantial new revenue.”

Critics are slow to cheer PILOT agreements. They’re often awarded to big developers known to have deep pockets, leaving many observers to wonder how much a property might have generated if the owner had to pay full taxes like anyone else. But in economic development, particularly in upstate New York communities seeking revitalization, the competition to land big projects is fierce. One of the ways to transform blighted, long-vacant sites that could very well go on standing vacant is to offer site-seeking developers an incentive in the form of temporary tax relief, Gillen said.

“We’re in an environment now where companies are looking at the START-UP program [the state’s new tax-free program] and the expectation is that if they come they should get some benefit, especially when they’re coming to a raw site that’s never produced taxes,” he said. “They’re saying, we’ll create a substantial tax base but we want some benefit in return.”

Of the 53 PILOT agreements Metroplex administers, 15 were negotiated on projects that were built on government-owned or tax-exempt land that previously paid nothing in taxes. Eleven were built at formerly vacant buildings that paid little or no taxes. Twenty were built on vacant land that previously generated little taxes. Seven agreements were negotiated either to help a company expand or to retain jobs in the area.

Two PILOT agreements actually decreased payments from 2013 to 2014.

The Cushing Center, a medical office complex at Ellis Medicine’s McClellan Street campus in Schenectady, saw its payments fall from $38,771 to $29,000. When the agreement was originally negotiated, Ellis was exempt from paying anything because of its nonprofit status. But as Ellis increased its footprint in the building, Metroplex sought to renegotiate the terms and finally closed a deal last month that will bring the total PILOT payments up to $53,000 this year and $76,000 next year.

The other drop came from Unilux Advanced Manufacturing, a Toronto company that assembles huge boilers at the county’s Niskayuna Commerce Park. When the company first opened its plant in town in 2005, it qualified for Empire Zone benefits. Those recently expired, Gillen said, causing a drop in the PILOT agreement from $144,525 to $125,122.

Several large projects made their first PILOT payments last year, including the long-anticipated Target in Glenville and Transfinder’s new $7 million headquarters at 440 State St. in downtown Schenectady. Other first-time payments were made on the Schenectady Armory site at 125 Washington Ave., the new YMCA housing program for men at 845 Broadway, the new Window Factory Lofts at 301 Green St. and a $3 million apartment-retail development at the corner of Hamilton Street and Broadway.

Local governments can expect to see new revenue this year from six new projects across the county, including upscale apartment projects at MVP’s old headquarters at 111 Liberty St. and the former Spencer Business School at 202 State St. in Schenectady; a new senior housing facility at 150 Dutch Meadows Lane in Glenville; the new Socha Plaza building on Route 50 in Glenville; Communications Test Design Inc.’s new digs in the Glenville Business and Technology Park; and the transformation of the long-vacant Grand Union in Rotterdam into commercial office space.

Below is the complete list of PILOT agreements to generate revenue in 2014, including the project name, address, 2014 revenue and 2013 revenue.

Fifteen projects were built on formerly government-owned or tax-exempt property that paid nothing in taxes. They generated nearly $1.79 million in revenue last year.

—MVP headquarters, 625 State St., Schenectady: $357,347, up from $318,103

—Hampton Inn, 450 State St., Schenectady: $167,787, up from $165,277

—Bow Tie Cinemas, 400 State St., Schenectady: $90,939, up from $62,536

—One Broadway Center, Schenectady: $321,795, up from $316,978

—Office building, 2135 Technology Dr., Schenectady: $47,960, up from $45,422

—Utech, 135 Broadway, Schenectady: $26,790, up from $24,856

—M&P Labs, 2210 Technology Dr., Schenectady: $105,639, up from $101,538

—Pace Analytical Services, 2190 Technology Dr., Schenectady: $53,087, up from $49,602

—Astria Solutions Group, 2165 Technology Dr., Schenectady: $59,456, up from $55,554

—Witbeck Building, 426 State St., Schenectady: $101,190, up from $89,054

—Scotia Navy Depot, Glenville: $287,352, up from $285,991

—Cushing Center, 624 McClellan St., Schenectady: $29,000, down from $38,771

—Fortitech, Schenectady County Airport, Glenville: $104,780, up from $96,895

—Bombers Burrito Bar, 447 State St., Schenectady: $22,951, up from $20,967

—Schenectady Armory, 125 Washington Ave., Schenectady: $12,750, first payment

Eleven projects were built at formerly vacant buildings that paid no or little taxes. They generated nearly $1.44 million in revenue last year.

—BN Partners (Galesi Group affiliate), 1510 Maxon Rd., Schenectady: $610,281, up from $584,020

—Center City, 433 State St., Schenectady: $300,739, up from $229,583

—Villa Italia Bakery, 226 Broadway, $31,213, up from $29,041

—JMR Development, 600 Liberty St., Schenectady: $75,000, same as last year

—Galesi Group, 411 State St., Schenectady: $24,849, up from $24,793

—The Metropolitan Lofts, 409 State St., Schenectady: $33,157, up from $32,952

—World Star LLC, 450 Duane Ave., Schenectady: $176,246, up from $164,678

—Mohawk Honda, 175 Freemans Bridge Rd., Glenville: $105,033, up from $99,004

—Columbia Altamont, 1925 Curry Rd., Rotterdam: $37,346, up from $34,342

—845 Commons, 845 Broadway, Schenectady: $30,000, first payment

—301 Green St., Schenectady: $12,240, first payment

Twenty projects were built on vacant land that formerly generated nominal taxes. They generated $2.56 million in revenue last year.

—Railex, Rotterdam Corporate Park: $325,135, up from $318,808

—376 Broadway, Schenectady: $82,152, up from $78,689

—John D. Marcella & Son Appliances, 564 Broadway, Schenectady: $68,619, up from $62,954

—Unilux Advanced Manufacturing, Niskayuna Commerce Park: $125,122, down from $144,525

—Three buildings, Burdeck Street Business Park: $142,964, up from $123,188 (combined totals)

—Dimension Fabricators, 2000 Seventh Ave., Glenville: $225,801, up from $223,081

—Argo Turboserve Corporation, 588 Broadway, Schenectady: $41,797, up from $21,697

—Alco site, Erie Boulevard, Schenectady: $40,000, same as last year

—FG Rotterdam Holdings (Galesi Group affiliate), Rotterdam Corporate Park: $34,473, up from $33,629

—EMI Guide Rail, Rotterdam: $11,560, up from $10,641

—NE IP Holding, Rotterdam Corporate Park: $146,795, up from $81,267

—FM Ventures, Rotterdam Corporate Park: $512,221, up from $496,037

—Long Pond Village Apartments, Rotterdam: $227,117, up from $214,070

—Capital Living Nursing and Rehabilitation Centre, 526 Altamont Ave., Rotterdam: $351,415, up from $298,854

—Target, Glenville: $203,001, first payment

—245 Broadway, Schenectady: $9,280, first payment

—Town Homes at Union Square, 1011 Barrett St., Schenectady: $4,000, same as last year

—Civco Realty, 440 State St., Schenectady: $13,481, first payment

The remaining PILOTs were company expansion or retention projects that generated $9.04 million last year.

—GE Global Research Center, Niskayuna: $385,239, up from $356,044 (two PILOTs combined)

—GE Schenectady campus: $2,828,430, up from $2,786,087

—GE Rotterdam campus: $4.8 million, same as last year

—Kingsway Arms Nursing Center, 323 Kings Rd., Schenectady: $270,747, up from $245,220

—SI Group, 1000 Main St., Rotterdam Junction: $692,539, up from $689,670

—Golub Corp., 501 Duanesburg Rd., Rotterdam: $64,396, up from $58,629

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