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Editorial: Penalize SI Group for violating PILOT

Editorial: Penalize SI Group for violating PILOT

Company didn't keep its end of the bargain

In Fulton County, we recently learned about two economic development officials getting a sweet deal from their agencies, with each receiving huge bonuses in 2007 and 2008 for basically doing their jobs. In Schenectady County, it’s something far more common: a company getting the sweet deal — in this case, SI Group with a payment-in-lieu-of-taxes agreement negotiated by the Rotterdam Industrial Development Agency in 2008.

The typical PILOT assesses at full value and starts the payments as a percentage of that assessment, with the percentage steadily increasing over a number of years to 100 percent. That’s not what happened in Rotterdam, where the assessments and payments were locked in from 2008 through 2022, regardless of the true value of the property or the tax rate. At the time, town and county Democrats strongly criticized the agreement, but they’ve been much quieter since then-IDA Chairman Angelo Santabarbara switched parties and became a Democrat.

As in the past, SI used a threatened assessment challenge to make the PILOT — with lower but guaranteed payments — sound like a good deal, especially for the Schalmont school district, which gets roughly two-thirds of the $625,000 the company will pay this year. But the IDA gave up so much that even if the school district, town and county had to give the company refunds for years of alleged overpayments, they would still be well ahead without the PILOT.

The IDA’s justification for the PILOT, besides the guaranteed payment, was SI’s promise to build a new, “green,” $12 million biomass boiler and create seven new jobs. But the boiler hasn’t been built or the jobs created, and employment is actually down 11 due to people taking early retirement.

If SI were just allowed to go on without being penalized, what is to prevent other companies from making promises to get PILOTs and then not living up to their end of the bargain? Assuming the PILOT can’t be redone (and apparently it can’t for something like this without agreement from both sides), SI should at least be forced to pay the maximum penalty called for in the agreement— an increase in annual payments of 7.5 percent .

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