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There is a lot of attention being given to the Town of Montgomery Industrial Development Agency’s (IDA) recently approved Payment-In-Liu-Of-Taxes (PILOT) agreement. As Supervisor I believe transparency and communication are vital in terms of the public understanding how we got here. Our Town IDA established a Uniform Tax Exemption Policy (UTEP) in 2000 and then updated it in 2008, almost 12 years ago. This UTEP outlines three levels of PILOT’s that could be offered to companies who meet certain criteria. In 2018, it was established that Project Sailfish (Amazon) would be eligible for a 15-year PILOT. This initial offering meant the project would not have to pay any new property taxes in the first five years of the agreement. In year six they would pay 50% of their taxes and that number would go up 5% each year until year sixteen when they would be paying 100% of their taxes. This same PILOT was approved more than five years ago to the UNFI warehouse on Neelytown Road. Over the last five years UNFI has paid zero new property taxes to the Town of Montgomery and Valley Central School District (VCSD). Unlike the process with UNFI, public outcry of the Project Sailfish PILOT along with the newly elected Town Board made a difference. From the beginning of this year we made it very clear that projects before the Town IDA should not be offered a PILOT agreement that included zero new property taxes over the first five years. Project Sailfish, now formally revealing their tenant as Amazon, had received their Planning Board approvals, Town Board zoning change and approval of their 15-year PILOT agreement in 2019 before the new Town Board took office. Due to a technicality in the transfer of their already approved 15-year PILOT agreement a second public hearing was triggered. The newly elected Town Board, at our reorganizational meeting on January 2, 2020, seized this opportunity to bring Project Sailfish and Amazon back to the negotiating table. We asked the Town IDA to halt their final approval of the PILOT agreement transfer and over the last month we used that time to negotiate. This strategy helped net the taxpayers an additional $1.4 million dollars in tax revenue over the first five years of the PILOT agreement. Unlike UNFI, due to a combination of public comments, VCSD outreach and a Town Board that listened to its residents’ concerns, we were able to maximize the benefit to our community. I am proud of the work our Town Board and IDA did to ensure this PILOT agreement did more to benefit our taxpayers than the PILOT agreement for UNFI.
Now here is the million-dollar question: Why do we offer PILOTs? No one believes that Amazon needs a tax break. It is an unsettling thought that ANY tax incentives should be given to one of the wealthiest companies in the world owned by the richest man in the world. These incentives are offered in New York State to allow us to compete with neighboring states like Pennsylvania who have lower taxes but offer similar infrastructure advantages that our 84/87 interchange brings to the table. If the Town of Montgomery did not offer PILOTs, these companies would still be able to take advantage of millions of dollars in incentives through the Orange County IDA or through an existing New York State 485b program. The NYS offered 485b program is a 10-year property tax abatement that starts with 50% of companies taxes being paid in year one increasing incrementally until the company pays 100% of their taxes in year eleven. I know that sounds like a good deal. Why not just let Amazon take the 485b and we have a 10-year agreement instead of a 15-year agreement? The answer is it usually does not get that far. If the Town IDA did not exist, companies would just go to the Orange County IDA. By going with our Town IDA, we have the leverage to ask for certain benefits specific to Montgomery and our surrounding communities. For example, our town IDA mandates the developer to hire 80% of their over 300 temporary construction jobs to local labor. This is just the tip of the iceberg. We were able to work with the Town IDA specifically on the Project Sailfish PILOT to ensure many items were included in what’s called a “recapture” or “clawback” section of the agreement. This means that if Amazon does not deliver on these promises they will have to repay any tax incentives given and would forfeit their future incentives over the 15-year lifetime of the agreement. Here are some of the items included in the Project Sailfish PILOT:
- Failure to offer educational & learning benefits to VCSD & its students
- Failure to establish 800 full-time jobs, 80% of which must be created within the first two years
- Failure to document, to the satisfaction of the Town IDA, the creation of jobs providing employees with at least 75% of the average county wage
- Failure to document, to the satisfaction of the Town IDA, at least 80% of the $75 million in private sector investment within the first two years. This does not include everything. There is much more. Official documents are available on the Town of Montgomery IDA website. Another key element includes the fees received by the Town IDA from these PILOT agreements that are meant to be put back into our community. While there are limits to how these monies can be spent, I look forward to working with the IDA to show our community how much of a benefit this can become. On this Project Sailfish PILOT alone the fees will be in the hundreds of thousands. There is so much more to learn about how we can create benefits for our community through our Town IDA. That is why I have called for a joint meeting with the Town IDA and officials of the VCSD to discuss editing the IDA’s UTEP policy to ensure moving forward we DO NOT offer 15-year PILOTs to companies that may be willing to come here for lesser incentives. The IDA has welcomed these conversations and we are working towards making changes to a UTEP policy that is more than 12 years old.
The Town Board is currently moving forward with updating our Comprehensive Plan and discussing a potential development moratorium on warehouses and distribution facilities. We will be announcing our Comprehensive Plan Committee members and a firm to assist us with our plan at our next work session on Thursday, February 20. I look forward to leading more of these conversations in the weeks, months, and years ahead.
It’s easy to read a headline and get upset. Its easy to just say that this PILOT helped pay for Mr. Bezos’s new $165 million mansion. It is much harder to dig deep and do the research needed to educate ourselves and come to the understanding that these incentives are available whether the Town IDA offers them or not. We must continue to educate ourselves so we can make the best decisions possible and maximize the benefit to our community. As always, I am a phone call or an email away if you have a suggestion, question or comment. As your elected Town Board, we will continue to push ourselves every day to learn more and research more so we can better serve the Town of Montgomery.