Price Chopper’s parent company was dealt a blow this week in its ongoing dispute with the state when it lost an appeal in state Supreme Court for nearly $1.3 million in back state tax credits.
Golub Corp., owner of the Schenectady-based supermarket chain, says it’s owed the credits from 2007 and 2008, but hasn’t received them because of what turned out to be, in essence, a clerical error.
The dispute traces to 2005 when Golub built a massive distribution and storage facility in the Rotterdam Industrial Park. Galesi Group owns the park but leases it out to an affiliate, FM Ventures, which then enters into leases with companies looking to occupy the park. On behalf of FM Ventures and Golub, Galesi attorneys negotiated a payment in lieu of taxes (PILOT) agreement with the Town of Rotterdam Industrial Development Agency. The PILOT exempts Golub from paying taxes on the property in return for annual payments that increase each year. Last year’s payment was $313,337.
Although it was in an Empire Zone, Golub was denied the credits from 2007 to 2008 by the Department of Taxation because it wasn’t “party to the August 2005 PILOT agreement.” On paper, that agreement was between FM Ventures and the IDA.
“It was understood that our landlord was entering into a relationship with the IDA on our behalf,” said Golub spokeswoman Mona Golub. “So there was hardly any question by the IDA that we were the business investing in this Empire Zone. We were the ones making the PILOT payments. We expected the tax credit. But our name wasn’t on the written agreement.”
Since then, the state Legislature has changed the language of the Empire Zones statute so that by 2009 this was no longer an issue. Golub has received the Empire Zones tax credits ever since.
But the Appellate Division of the state Supreme Court says there’s nothing it can do about the lost tax credits, which Golub said would have been $1.29 million total from 2007 and 2008.
“The pertinent language affirmatively requires in clear terms that, to qualify for the credit under such provision, the PILOT payments must be made pursuant to a written agreement between the [qualified empire zone enterprise] and the appropriate entity,” wrote J.P. Lahtinen in a memorandum and judgment entered Thursday.
The burden was on Golub, the court said, to show that it qualified for the credits in more than just spirit.
“We cannot, under long settled principles of statutory interpretation, essentially rewrite an unambiguous provision of a statute by ignoring explicit language, no matter how equitable such a result may appear.”
The decision was the same as an administrative law ludge’s and a tax appeals tribunal in previous legal battles.
Golub said Friday she was unsure which legal avenues the company might pursue now.
“We are looking at our options,” she said. “We had every expectation that we would have those tax credits coming back to us. So as far as we are concerned, the issue is still not resolved.”