Union College isn’t the only non-profit in Schenectady that Mayor Gary McCarthy would like to see financially contribute more to city operations.
“Union may think we’re focusing on them,” he said. “They’re one of many entities that I’m trying to deal with so people pay their fair share.”
The city of Schenectady, like other cities in the region, has a substantial number of property owners who are exempt from paying taxes. Some are owned by non-profit organizations, some by the city itself.
Those properties represent about $1 billion, or 30 percent, of the city’s approximately $3.6 billion in total assessed valuation, according to the city’s 2015 assessment roll.
By comparison, the city of Albany has $12.3 billion in total assessed value in 2015 with $7.2 billion wholly exempt, or 59 percent. Albany’s percentage is primarily due to the number of state and government owned buildings there.
In the city of Troy, there is $3.2 billion in assessed total with $1.4 billion wholly exempt, or 43 percent. And the city of Saratoga Springs has an assessed valuation of $3.8 billion with $5.8 million, or 1.5 percent, wholly exempt.
There are 1,446 properties in the city of Schenectady that are tax-exempt. Almost half, about 48 percent, or 689 properties, are owned by the city of Schenectady and the Schenectady Urban Renewal Agency (SURA).
The city of Albany has 2,962 wholly exempt properties with 696 in Troy and 350 in Saratoga Springs.
In Schenectady, some tax-exempt properties make payments to the city, county and school district in the form of payment in lieu of taxes, or PILOT, agreements. There are also partial exemptions due to breaks given to veterans and senior citizens.
But there are entities by state law that are totally exempt from paying taxes, including charities, churches and schools.
There are 40 school district and educational properties, 191 religious properties, 56 charitable properties and 37 hospital properties in Schenectady. There are also 58 performing arts buildings and 78 moral/mental improvement properties.
Union has a total of 76 properties that are wholly exempt in the city, including off-campus student housing. That’s 5 percent of the total number of wholly exempt properties in Schenectady.
Earlier this month, McCarthy sent a letter to Union President Stephen Ainlay pushing for tax payments for the college’s off-campus properties and the cost for city services including fire and police.
McCarthy said on Thursday he has received a response to the letter, dated March 17, from Ainlay. He declined to discuss it further.
Ainlay declined to comment for this story.
In an email, Union College spokesman Phil Wajda said, “In regards to the letter, the president has relayed to the mayor that we will give the letter a thoughtful response.”
The college’s off-campus properties have a total of more than $31 million in assessed value, McCarthy said in the letter. That’s about 3 percent of the total assessed value of wholly exempt properties in the city.
“The removal of that property off the tax rolls has an impact of roughly 2 percent on the tax rate,” McCarthy said. “For city taxes, that’s a little over $600,000 a year. That means the rest of the taxpayers have to subsidize that amount each year.”
He said in the letter if Union paid taxes for its off-campus properties it owns, it would provide the city, county and school district with $1.35 million in additional revenue each year.
In his letter, McCarthy asked Ainlay for the total dollar value of the scholarships provided under the Union-Schenectady Neighborhood Restoration Program in the College Park Neighborhood.
Wajda said a total of three students, one currently enrolled, have met the requirements for a scholarship to cover tuition, for a total of more than $400,000.
Union does pay taxes on a handful of properties the college owns on Park Place, which are rented to faculty and staff, Wajda said.
McCarthy estimated that the city’s cost for fire and police services at Union, both on and off campus, totals about $600,000 a year. Council President Leesa Perazzo had estimated the cost at $700,000.
The city could not provide a breakdown for the cost for services when asked more than a week ago for this story.
McCarthy said city staff is working to come up with a more accurate number by next week.
When asked how he got his current estimate, McCarthy said “[Former Mayor] Brian Stratton went over this a number of years ago. It has to be updated.”
Wajda pointed to the college’s annual economic impact, which is a total of $300 million across the Capital Region. A 2013 report says Union generates about $8.4 million in taxes a year.
Union currently has 2,200 students and 865 employees, including 211 full-time faculty members.
McCarthy said he is not looking for only Union to contribute to the city, but other wholly exempt entities as well.
He pointed to other colleges that make PILOT payments by using private developers for projects, like Rensselaer Polytechnic Institute in Troy and Schenectady County Community College.
SCCC pays about $61,000 a year in taxes as part of its lease with the Galesi Group for space at Center City, according to Ray Gillen, chairman of the Schenectady County Metroplex Development Authority. SCCC’s student housing PILOT is $30,000 and climbing, he said.
“Union should seriously consider using private developers to build student housing as many colleges do,” McCarthy said in the letter. “This would allow the city to collect a PILOT payment rather than have a new $7.95 million building, which is (once again) off the tax rolls,” referring to Union’s new residence hall.
McCarthy noted in the letter that other colleges and universities also make PILOT payments, including Boston University, Syracuse University and Yale University.
Ellis Medicine, a nonprofit, leases space at 600 McClellan St. and pays a PILOT there of $48,653, according to Gillen. Also, Albany Medical Center will lease space on upper Union Street and pay full taxes, he said.
Proctors, which is also tax-exempt, makes payments of about $5,000 to $10,000 a year to the city, McCarthy said.
“I’m looking for fairness and equity and for everyone to participate in the renovation and rebirth of this community,” he said.
Aside from non-profits, there are some for-profit companies classified as wholly exempt on the city’s tax roll but make tax payments through PILOT agreements, like General Electric’s main plant with a $2.8 million annual payment to the city.
The city could also establish a fee for nonprofits, including Union, to pay each year. A curb fee was previously proposed by former Mayor Brian Stratton.
In 2010 Stratton proposed raising $1.4 million for the 2011 budget by setting a fee for every foot of frontage on every property in the city, including nonprofits. The goal was to collect the bulk of the money from the nonprofits.
“We’re looking at some of those options,” McCarthy said.
Reach Gazette reporter Haley Viccaro at 395-3114, [email protected] or @HRViccaro on Twitter.