Categories

Home : general

Family Dollar PILOT revision settled

No opposition was voiced to replacing the payment-in-lieu-of-taxes agreement that covers the Family Dollar distribution center at a hearing Tuesday.

Pending before the county Industrial Development Agency is a new agreement for the Griffiss-based operation. It would fix problems that arose with the current tax agreement because of modifications in how property tax benefits received by Family Dollar are being calculated at the state level, according to Steven J. DiMeo, president of Mohawk Valley EDGE. How Empire Zone benefits are calculated changed between the time the agreement was drawn up about eight years ago and when it actually took effect.

As a result, Family Dollar is not getting reimbursed by the state for its PILOT payments at near the anticipated level. The warehouse opened in 2006.

Property tax reimbursement was a factor in Family Dollar’s decision to pick Griffiss over other locations in the Northeast when it looked at sites for a distribution center.

Family Dollar is paying about $2.7 million a year under the existing PILOT, but receiving only about $1.8 million back from the state. As initially envisioned, Family Dollar expected 100 percent reimbursement through 2015.

What’s before the IDA is an agreement that ends in 2025 and takes into consideration Family Dollar’s shortfall:

-- through 2015: The company pays full taxes based on assessment of $50 million. There would be no PILOT in effect.

-- 2016-2020: Under a PILOT, it pays two-thirds of taxes based on an assessment of $50 million.

-- 2021-2025: The company pays three-quarters of taxes based on assessment of $50 million.

The 10 years of partial tax payments allow the firm and Griffiss Local Development Corp., as developer of the Griffiss business park, to account for the unrealized reimbursement under the existing agreement.

The existing agreement calls for Family Dollar to pay the equivalent of full taxes through 2015 and then two-thirds through 2020. Starting in 2021, there would be no PILOT.

Represented at Wednesday’s hearing were the Rome School District and city, two of the taxing jurisdictions affected by the proposed agreement. The county, which also would be impacted, did not send a representative.

"We support the agreement," said Rome Superintendent Jeffrey P. Simons. "I think I can speak confidently on behalf of the district."

He said the district is mindful of the local economic impact of the distribution center.

His comments came after DiMeo reviewed the agreement and answered questions from school officials and others. Simons also talked with counsel and two school board members privately after DiMeo spoke but before the superintendent endorsed the agreement.

Separately, the school district and IDA are in a legal battle over a new 25-year tax-free agreement for Griffiss Utility Services Corp.

A feature of the proposed Family Dollar agreement stipulates that the assessment for tax purposes will be maintained at about $50 million throughout the duration of the PILOT as Family Dollar agrees to end its assessment grievance over this figure.

The company is seeking a reduced assessment in the $30 million to $40 million range, according to Mohawk Valley EDGE.

When the current PILOT was drawn up, it was anticipated the assessment would be in the neighborhood of $37 million. The higher assessment means Family Dollar has been paying more through the PILOT than originally projected.

The IDA board is likely to approve the new tax agreement at Friday’s meeting.

RomeSentinel.com

Calendar

April 2014
Su Mo Tu We Th Fr Sa
  12345
6789101112
13141516171819
20212223242526
27282930   
March