PLATTSBURGH — The Plattsburgh City School District’s opinion of a possible PILOT agreement remains unchanged.
For several months, district representatives have been outspoken in their opposition to a proposed payment in lieu of taxes, or PILOT, arrangement that would support an incoming development slated for the Durkee Street parking lot.
Most recently, Superintendent of Schools Jay Lebrun, on behalf of the district’s Board of Education, outlined the various concerns via letter addressed to County of Clinton Industrial Development Agency, or IDA, Executive Director Renee McFarlin.
That notice was later disseminated to a range of bodies, including the Clinton County Legislature and the City of Plattsburgh Common Council.
"The Board of Education strongly opposes this PILOT deviation proposal," the letter says. "We encourage the IDA Board to work towards a less-substantial PILOT arrangement with this developer and to thereby mitigate the negative impact."
IN LIEU OF TAXES
As part of its state-funded Downtown Revitalization Initiative, the City of Plattsburgh signed a development agreement with Albany County-based Prime Plattsburgh LLC for the construction of a multi-use project on the Durkee Street site.
Prime submitted an application for a PILOT agreement back in 2019, without which, they had said, the development would not be possible.
The developer’s initial application was for a 20-year agreement to abate any property taxes for the first four years and then, via incremental increases, slowly ease them into full taxation upon PILOT completion.
Per that request, Prime would have paid 34 percent of its total property taxes over those two decades.
In its latest version, to appear before the IDA Board at its Monday, Feb. 10 meeting, the four-year period of full abatement no longer existed. Instead the developer would annually pay $17,000 in taxes for those first four years.
The updated PILOT agreement had also been shortened, would require Prime to pay full taxes throughout the construction period and would end with the developer paying a total 33.4 percent of its taxes over the 18-year span.
"The PILOT schedule now being contemplated is 18 years and offers a comparative increase of $140,080 to their initial request," McFarlin explained.
"More importantly, the 18-year schedule will put the property on the tax rolls two years earlier, which will provide as much as a $750,000 increase over the 20 years initially proposed, if not more."
This version of the prospective agreement, however, could still see adjustments.
"As with every project applicant seeking a PILOT deviation," McFarlin said, "negotiations regarding the terms of the final schedule are ongoing until the Board of Directors considers final resolutions."
NO SALES REVENUES
Throughout all of its forms, the Plattsburgh City School District, as one of three affected taxing jurisdictions, has expressed discomfort with the possible payment in lieu of taxes.
The district, which has the highest tax rate of the three, feared any sort of PILOT agreement would put the district's budget, and therefore its school programs, in jeopardy.
"Our budget and our revenue sources are a lot narrower," longtime School Board Member Fred Wachtmeister told The Press-Republican. "We basically go with the local tax levy and state aid.
"If you look at the sources of revenue that the county and the city have, it’s much broader," he said, referencing user fees and sales-tax revenues. "We, in a sense, are the most vulnerable of the taxing jurisdictions."
In his letter, Superintendent Lebrun expressed the same sentiment, adding that the district was heavily reliant on property tax.
"As such, the Plattsburgh City School District's proportionate share of total property taxes is larger than those of these other governments," he says.
"While foregoing property taxes in the hopes of increased sales tax revenue may advantage cities, towns and counties, this is injurious to school districts."
Another issue the City School District took with Prime's ongoing PILOT agreement application process was its continued changes.
As noted with the most updated version, the proposed agreement has shifted since its initial application based on variables, like projected tax rate increase percentages and length.
Officials of the School District have referred to these shifts as "manipulative" on the part of the IDA, but, McFarlin retorted, the changes were the result of new information.
"One thing that happened was we got the tax rates for the 2020 tax year for both the city and the county and the 2019/20 tax year for the school district," she said. "That actually changed the numbers a little bit, because it wasn't as high as I had plugged in.
I changed it to 1.5 percent, because it was more realistic," she continued. "As we went through the process, I did keep the School District updated on what was going on."
CONFLICT OF INTEREST
District officials have voiced other upsets with the Prime PILOT application, as well, such as, in their opinion, the project's lack of job creation, the development's estimated future assessment value and conflicts of interests on the IDA board.
IDA Board Chairman Trent Trahan said any allegations of the latter, however, were simply false.
"There is a website in the state that lists what really makes up conflicts of interests," Trahan said. "If a board member has a conflict, then that individual does recuse themselves."
In his letter, Lebrun wrote that he and the Board of Education were concerned that City of Plattsburgh Assessor Timothy Surpitski "appears not to have been consulted about the appropriate assessed valuation for the development in question."
"On January 15th, district employees met with the City Assessor to inquire about the validity of the assessed figures being used in the PILOT schedule, and he reported having never been contacted about this matter," he added.
As for the building's future assessment, Lebrun opined that a development which was to cost around $22 million to construct would have a higher future assessed value than the $10 million figure which had been presented.
But McFarlin, who said she met with Surpitski, said the figure had been estimated to the best of the IDA's ability.
"In our experience thus far," she said, "property costs roughly one-half to even two-thirds in some situations, more to build than they will be assessed at."
Surpitski confirmed with The Press-Republican that he and McFarlin had met regarding the development’s future assessed value.
"She had requested some information and then I said, 'Well I need some specifics in order to be able to entertain that,' and the timeframe that existed between the school district asking me that question and her getting me the information I think is where this discrepancy lies."
He went on to say that, at this stage in the project, changes could be made and that he has not received a concrete set of plans as he normally does with similar projects.
"I’ve been told at this point in time those don’t exist because we’re still in the early development stages."
Surpitski said he and McFarlin met on Friday, Jan. 31, adding that the two meet often enough, though not on a regular basis.
He commented that McFarlin has been good about providing additional information he needs, and that he has been updated as the project is.
The district had many concerns regarding the number of students expected to enter the city as a result of Prime's development, which, in part, was to include a 114-unit apartment complex.
By latest estimate, per the city's recently OK'd environmental impact study, that development could bring on board an estimated 22 new school-age students.
While district officials saw this figure as a surprise, based on former correspondence with city officials, and felt the study used to generate the figure was outdated, being from 2006, their major concerns were in regard to funding.
No matter how many students, Lebrun said, it will cost money to educate them.
"This influx of students is projected to yield additional local cost — net of any state aid generated — of approximately $335,400 per annum," his letter says.
Though that figure had been based on a former estimate of 30 school-age students, Lebrun said the ratio was still the same.
City of Plattsburgh Mayor Colin Read said there are two sets of new market-rate housing projects in the city with rents comparable to the Prime Plattsburgh project.
In the 90 total units, just four families have young children, he added.
CHANGE OF PROCESS
City School Board member Roderick Sherman hoped the PILOT application would be paused to allow for further communication between all involved agencies.
"If they have sales tax coming in, perhaps the city could share a portion of their PILOT with us — or the county," he said.
If nothing else, Sherman hoped future changes be made at the state level regarding payment in lieu of taxes procedures.
"Maybe we can reach out to other places and get this whole process changed a little bit so that school districts are more involved and better involved," he said.
"We’re not the first school district to face this sort of problem. It happens all over the state."
Wachtmeister said he agreed.
"This is really an issue that Assemblyman (D. Billy) Jones and Senator (Betty) Little ought to be dealing with," he said. "To ensure that school districts are not big losers."
Email McKenzie Delisle:
The County of Clinton Industrial Development Agency Board will meet at noon Monday, Feb. 10 in the legislative meeting room on the second floor of the Clinton County Government Center, 137 Margaret St. in Plattsburgh.
A resolution to approve the Prime Plattsburgh LLC PILOT is on the agenda, located at clintoncountyida.com.
The meeting is open to the public.