The Fulton County Center for Regional Growth has sold one of its industrial buildings to a private business, allowing the tax-exempt structure to be placed on property tax rolls at full value.
Al Gentile purchased the building at 178 Corporate Drive in Gloversville for an undisclosed amount. The building has a full market value of $950,000, according to the Fulton County Real Property Tax Service Agency.
Gentile operates a pallet-making business called Gen-Fame. He has been a tenant in the 42,000-square-foot building for a decade. He plans to expand his business and add eventually to his workforce of 15, depending on the economy. “I thought it was a good opportunity and the opportunity was there,” he said. He would not disclose what he paid for the building.
Mike Reese, president and CEO of the CRG, said the building is the first the CRG has sold since it put six properties up for sale or lease through a real estate broker in May. The properties are owned and managed by the center’s subsidiary, the Crossroads Incubator Corp.
“Our intention is to sell off the real estate portfolio owned by CIC,” he said. “We are trying to sell the portfolio to pay down mortgages we have against the buildings.”
The portfolio includes Estee Commons, a 39-unit upscale apartment complex that was once Estee Middle School of the Gloversville Enlarged School District; the former Johnstown Hotel, currently headquarters for the CRG, and other large structures built by the CIC over the years.
The CRG will use the proceeds to further economic development initiatives in the county. These initiatives may include constructing buildings for companies seeking to do business in the county, Reese said. “We would have resources to reinvest in Fulton County for new projects as we go forward,” he said in an earlier interview.
Reese said Gentile decided to buy the building during discussions with the CRG about leasing additional space. “That is when he made the decision to purchase,” he said.
The Fulton County Industrial Development Agency actually held title to the building, said Fulton County Planning Director James Mraz. The arrangement goes back to when the building was constructed in 1995.
Under this arrangement, the IDA was able to convey exemptions on sales tax and mortgage tax to tenants, including offering them tax breaks under the now defunct Empire Zone Program. Gen-Fame, for example, received approximately $4,000 in business tax credits under the Empire Zone Program in 2005.
Also under the IDA agreement, the CIC did not pay full property taxes on the building and instead paid a payment-in-lieu-of-taxes agreement, or PILOT. The amount the CIC paid increased gradually over the duration of the long-term agreement; the exemptions have since expired, Mraz said. As a result, Gentile will pay full taxes on the property himself for the first time since the building was built, officials said.
In a related note, the CRG’s chief financial officer, Jamie Levendusky, has left the agency. Reese said Levendusky had been hired approximately 10 years ago specifically to manage the CIC properties and act as an accountant. When the CRG decided to unload the properties, her duties changed, he said. The CRG board this year made her chief finance officer, reporting directly to board members. This was an attempt to provide more accountability within the agency following alleged past malfeasance by two executives since fired.
Reese said the CRG board has not yet decided whether to hire a replacement for Levendusky. Until the board decides, it plans to contract for accounting services from an outside vendor.
Reese said the CRG now has four employees, part of an effort to streamline operations.