The Galesi Group is poised to get another year of tax breaks for the Mohawk Harbor site in Schenectady.
The Schenectady County Metroplex Development Authority board voted Wednesday night to extend the payment-in-lieu-of-taxes agreement for the 60-acre riverfront site another year. It will be the third time that the Rotterdam developer has been granted an extension on the PILOT since it was first reached in July 2010.
The agreement requires Galesi Group to make annual payments of $40,000 on the brownfield site until it’s ready for development. Last year, the site was assessed at nearly $2.5 million.
Galesi bought the site that was once home to the American Locomotive Company in 2010 with the intention of demolishing the vacant and blighted buildings that stood there and replacing them with a mix of housing, commercial and office space. Today, the project has grown to become one of the region’s most anticipated. The entire $480 million redevelopment will include a casino, two hotels, condominiums, town houses, apartments, office and retail space, a harbor and a bike-hike trail.
But because the industrial site was home to decades worth of environmental contamination, cleanup and underground infrastructure work ended up taking longer than anticipated, the company said.
Galesi Group has asked for three extensions of the PILOT for “purposes of allowing [Galesi] to continue planning and pre-development activities in preparation of the comprehensive redevelopment of the project site,” according to the terms of a recent PILOT amendment.
Metroplex granted an extension in June 2012 and another in March 2014.
At their monthly meeting Wednesday, board members voted to extend it again through March 2016. The extension won’t be final until the board holds a public hearing, scheduled for Thursday, Feb. 26, at 5 p.m. at the Metroplex offices on the fourth floor of Center City.
“At the time we entered into this, you could have made the argument that nothing should be collected on the site,” said Metroplex Chairman Ray Gillen. “It was a brownfield. It was a dirty site. There was no income being produced from the site. So we reached a compromise. We said, let’s value this at $1 million, which would put taxes on it around $40,000.”
Gillen said as soon as infrastructure and underground work at the site is complete and the redevelopment starts to go vertical, each new building will be added to the tax rolls at its full value.
“As soon as we can take advantage of buildings being built there, we will,” he said. “This $40,000 was just a way to collect something on the site while the cleanup was underway. Once we go vertical, we’ll start adding significantly to the tax base, as was our plan all along. Right now, Galesi is spending millions of dollars to prep the site and clean up the site without any income coming in on the site, and we’re fortunate they’re willing to step up and do that. It’s going to pay off for them and for the community.”
Galesi has budgeted about $25.5 million on Mohawk Harbor site prep, said Metroplex Executive Director Jayme Lahut. Metroplex is also providing a sales tax exemption on any materials the developer purchases for this work, he said.
The state picked the Mohawk Harbor site in December for one of three upstate casinos. The gaming facility is expected to create 1,200 jobs and recurring revenues of $4.1 million each for the city and county and $2 million for the Schenectady City School District.
Gillen emphasized that the casino will not receive tax breaks of any kind, though the remaining portions of the site will qualify for Brownfield and Empire Zone tax benefits. Local governments will still receive full taxes on the site.