Tax break for golf clubhouse irks Amsterdam school board

AMSTERDAM — A recently approved property tax break for the new clubhouse planned at the Amsterdam Municipal Golf Course has the Greater Amsterdam School District Board of Education worried about the impact to the city tax base.

The Amsterdam Industrial Development Agency Board of Directors unanimously approved a payment in lieu of tax agreement for the soon to be constructed clubhouse building at the city owned golf course on Upper Van Dyke Avenue during its March 21 meeting.

Lance Orcutt bought the clubhouse property from the city through limited liability corporations after the former building was severely damaged by burst pipes. He paid the cost of demolishing the former structure to make way for construction of the modern new facility.

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Under the 10 year PILOT agreement, property taxes will start out at just 10% of the total assessed property value and will rise by 5% each year. Full property taxes will be paid on the site after the agreement expires.

Exactly how much the property taxes for the new clubhouse will be will not be known until a final assessment has been set after the 14,000 square foot structure with a dining room, bar and banquet space has been built at an estimated cost of $3 million.

Members of the GASD Board of Education during a special meeting on Wednesday questioned the decision of the AIDA to issue a PILOT agreement for the project that will impact the district’s tax base within the city. Lowering the share of taxes paid on one property requires those costs to be redistributed to all other taxpayers.

“It scares me when we play with the levies like this,” said Curtis Peninger, board vice president.

PILOT agreements are normally issued for projects creating large numbers of jobs, Peninger argued. He suggested the tax break wasn’t warranted based on the scale of the clubhouse project.

The tax exemption for what is effectively a restaurant and bar seemed unusual to board member Mark Kowalczyk. He questioned whether it would lead to all incoming businesses expecting the same treatment.

“I believe it sets a dangerous precedent going forward,” Kowalczyk said. “There’s no reason they all can’t come in and ask for one.”

The decision is unfair to long running city businesses that don’t receive the same benefits, added Gavin Murdoch.

“I don’t see the equality on that,” Murdoch said. “It’s a bad look for the people who have been here forever and don’t get any financial relief in their taxes.”

The school board approved a 5-1 motion to send a letter asking the AIDA Board of Directors to reconsider its decision on the PILOT agreement that is “not in the interest of the district taxpayers.”

“It’s always a goal to work collaboratively to make things better in the city, but this has ramifications,” said Nellie Bush, school board president.

School board member Rev. Kent McHeard voted against the resolution after indicating his support for the PILOT agreement.

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AIDA Executive Director Amanda Bearcroft on Friday said there is no option for the Board of Directors to reconsider a PILOT agreement once it is approved, nor to consider the related contract issued to the property owner.

Letters to officials from the school district, the city of Amsterdam, and at Montgomery County notified them that the AIDA was considering a PILOT agreement for the clubhouse property were sent out before a decision was made, Bearcroft noted. No comments on the proposal were returned by any of the three taxing entities.

Bearcroft said the PILOT agreement was warranted based on the substantial investment in the city involved in the project, its economic benefits and the number of jobs it will create. The level of the tax exemption was determined through discussion among the AIDA Board of Directors, attorneys and project representatives.

“Having this built is a great economic asset,” Bearcroft said. “It’s an event space that is much needed for the community and the county that we currently don’t have in the area.”

The tax base won’t actually be impacted by the decision as the property was formerly owned by the city and was fully exempt from all property taxes.

“Although we granted a PILOT, we are going to be generating tax revenue off of this business, which is more than we received in the past so it is getting something back on the tax rolls,” Bearcroft said.

Even with the tax break in place, Bearcroft suggested that the tax revenue from the new building will likely be greater than what the substantially smaller former clubhouse could have brought in if the property had been taxable.

In its first year of operation, the clubhouse is expected to create around 18 total jobs. That number is expected to grow the following year to around 26 total jobs.

Construction of the clubhouse is expected to begin this year for targeted opening ahead of the spring 2023 golf season.

Reach Ashley Onyon at [email protected] or @AshleyOnyon on Twitter.