_________________

NEWS RELEASE                           For Immediate Release
_________________

Contact: Ray Gillen, Metroplex
               (51 377-1109      
               (51 461-7137 (cell)

Metroplex:  Former Vacant Buildings, Lots, and Government-Owned Property Now Generating Revenues for Local Governments in Schenectady County

Schenectady, N.Y., February 16, 2011 -- The Schenectady County Metroplex Development Authority today released information about all 40 payment in lieu of tax (Pilot) agreements administered by Metroplex, the City of Schenectady Industrial Development Agency (IDA) and the Schenectady County Industrial Development Agency (IDA).  Together, the Pilot agreements generated over $4.45 million in payments to local governments, school districts and County government with that number expected to grow as Pilots include regularly scheduled increases. An additional $1 million resulted from sales tax revenues from projects covered by Pilots.  Metroplex administers both the City and County IDA and started managing the Rotterdam IDA last year as part of Schenectady County’s unified economic development team.  

Susan E. Savage, Chair of the Schenectady County Legislature said, “Creating and maintaining jobs throughout Schenectady County remains our top priority,” said Susan Savage, Chairwoman of the Schenectady County Legislature.  “These agreements have allowed many of our local businesses to grow while attracting new investments and jobs that are benefiting our local taxpayers.”

Gary McCarthy, President of the Schenectady City Council said, “The Pilots that have been put in place under Schenectady’s unified economic development team have eliminated blight, created value and jobs and an increasing revenue stream for local government.”

Ray Gillen, Chair of the Schenectady County Metroplex Development Authority and Commissioner of Economic Development and Planning for Schenectady County said, “Almost 90% of the Pilot agreements cover projects built on land that was previously tax-exempt, buildings that were vacant or vacant land. We are taking property that paid little or no taxes and putting it back to use while we create new jobs and new revenues for local governments.”  

Metroplex currently administers 40 pilot agreements:  

-- 10 agreements are Pilots that resulted in new buildings being built on land that was previously vacant and paying just nominal taxes.  Having built buildings where there was vacant land, these ten agreements are generating new tax revenues of $1,056,079 each year with that figure growing as Pilot payments increase.

--14 agreements are Pilots that resulted in new buildings being built on land that was previously owned by the government or was tax-exempt.  These 14 agreements are generating new tax revenues of $1,567,742 each year on property that generated no taxes before with that figure growing as Pilot payments increase.

-more-

--11 agreements are Pilots that resulted in new tax base and new jobs in formerly vacant buildings. These 11 agreements are generating new tax revenues of $887,678 each year where nominal taxes were paid before on vacant buildings with that figure growing as Pilot payments increase.

--5 agreements cover building expansions.  These are Pilots that helped a company expand resulting in new tax base for the community. These Pilots generate $934,060 each year with that figure growing as Pilot payments increase.

In addition, a number of the projects listed created substantial new sales tax revenue estimated at more than $1 million per year.  

Projects Built on Vacant Land Were Paying $49,500 in Taxes Now Paying $1,056,079 in Pilot Payments

•     Railex at the Rotterdam Corporate Park paying $291,434.  The company built a new 220,000 square foot warehouse.  Pilot increasing.      

•     376 Broadway in downtown Schenectady. New 24,000 square office building paying $58,262.  Pilot increasing.

•     Marcellas at 564 Broadway in downtown Schenectady.  New 16,750 square foot facility paying $24,508. Pilot increasing. Project also creates sales tax revenue.

•     Unilux at Niskayuna Tech Park paying $130,434. The company built a 67,000 square foot manufacturing plant.  Pilot increasing.  

•     Belvedere Hotel at 1930 Curry Road in Rotterdam.  28,725 square foot building paying $54,516. Pilot increasing. Project also creates sales tax revenue.  

•     Opus Business Park (now Burdeck Street Business Park) Three buildings -- 15,600 square feet paying $15,865 with Pilot increasing.  35,100 square foot building paying $48,498 with Pilot increasing and 25,000 square foot building paying $48,720 with Pilot increasing.

•     Time Warner Cable at 1021 Highbridge Road in Rotterdam.  80,000 square foot office building paying $217,857 with Pilot increasing.

•     Dimension Fabricators at 2000 Seventh Avenue.  Assumed pilot on 152,000 square foot building paying $165,985 with pilot increasing.

Government or Tax–exempt Land/Buildings Were Paying $0 in Taxes Now Paying $1,567,742 in Pilot Payments    

•     MVP at 625 State Street in downtown Schenectady. 175,000 square foot office building paying $256,569 with Pilot increasing to $700,000.

•     Hampton Inn at 450 State Street in downtown Schenectady.  62,000 square foot hotel paying $104,038 with Pilot increasing to $200,000.  Project also creates sales tax revenues.

•     400 State Street.  60,200 square foot building paying $20,892 increasing to $92,000.

•     Fortitech at 2105 Technology Drive.  130,000 square foot facility paying $164,399 with Pilot increasing.

•     Broadway Center 140,000 square foot office building paying $294,282 with Pilot increasing.

•     Cyclics 22,000 square feet on Technology Drive paying $50,938 with Pilot increasing.

•     Utech at 135 Broadway paying $12,339 with Pilot increasing.



-more-

•     M&P Labs 18,000 square foot facility on Technology Drive paying $77,605 with Pilot increasing.  

•     Northeast Analytical 15,520 square foot facility on Technology Drive paying $57,161 with Pilot increasing.

•     Astria Solutions 27,000 square foot building on Technology Drive paying $41,962 with Pilot increasing.

•     426 State Street 34,000 square feet paying $75,000 with Pilot increasing.  Project also creates sales tax revenues.

•     Former Scotia Navy Depot paying $261,084 with Pilot increasing.

•     Columbia McClellan Group 45,550 square feet built on formerly tax-exempt property $68,791 with Pilot increasing.

•     Fortitech at the Schenectady County Airport paying $82,682 with Pilot increasing.  

11 Formerly Vacant Buildings Now Paying $888,038

•     BN Partners at 1510 Maxon Road in downtown Schenectady.  New 240,000 square foot office paying $140,150 increasing to $800,000.  This was vacant Big N Plaza.

•     Center City in downtown Schenectady. $150,000 with Pilot increasing.  This was vacant Center City building.  

•     Villa Italia $21,150 with Pilot increasing.  This was vacant garage. Project also creates sales tax revenue.  

•     JMR Development $135,357 with Pilot increasing. This was vacant Two Guys store.  

•     411 State St. Acquisition $25,000 with Pilot increasing to $40,000.   This was vacant dollar store.

•     401 State $63,250 with Pilot increasing.  This was vacant Woolworth’s store.

•     409 State $33,000 with Pilot increasing.  This was vacant dollar store.

•     Contec $63,897 with Pilot increasing. This was empty building.

•     World Star $173,842 with Pilot increasing. This was vacant Maqua building.  

•     SROA Realty $73,985 with Pilot increasing.  This was vacant Two Guys Automotive.

•     Bombers $8,407 with Pilot increasing.  This was vacant boxing gym. Project also creates sales tax revenue.

5 Expansions Paying $934,060

•     Three Pilots at GE Global Research for chemical engineering expansion, new Pilot manufacturing facility and expansion of Energy Learning Center.  Paying $357,460 with Pilot increasing.  

•     Environment One expansion $77,376 with Pilot increasing.

•     SI Group Niskayuna expansion $499,224 with Pilot increasing.

In addition to the Pilot payments generated by the 40 projects, each project also pays so–called ad valorem taxes which cover special district taxes that are not covered by Pilots. This provides additional payments to local governments in terms of fire district taxes, special district assessments and other special fees and charges.

Quoted Text

What Does Ad Valorem Tax Mean?
A tax based on the assessed value of real estate or personal property. Ad valorem taxes can be property tax or even duty on imported items. Property ad valorem taxes are the major source of revenue for state and municipal governments.

Municipal property ad valorem taxes are also known as "property taxes". Investopedia explains Ad Valorem Tax
The phrase ad valorem is Latin for "according to value". In the case of municipal property taxes, property owners have their property assessed on a periodic basis by a public tax assessor. The assessed value of the property is then used to compute an annual tax, which is levied on the owner by his or her municipality. Ad valorem taxes are incurred through ownership of an asset, in contrast to transactional taxes, such as sales taxes, which are incurred only at the time of transaction.

Quoted Text

Definition of Payment in Lieu of Taxes
By Ken Burnside, eHow Contributor .updated: September 5, 2010


Payment in lieu of taxes is a mechanism to help compensate municipal governments for nontaxable lands or organizations.Payment in lieu of taxes (often abbreviated as PILOT or PILT) is a program where a municipality receives a payment in lieu of property or sales tax revenue, either from a nonprofit organization or from another government entity that owns a real asset, such as land, or a valuable right-of-way.
.Municipal Tax Base Compensation
Because federally owned land is exempt from municipal, state and county taxes, a PILOT payment compensates the municipality in which the property is located for lost tax revenue. Similar arrangements exist between many state university programs and the municipalities surrounding the campus.
Nonprofit Organizations
Nonprofit organizations are often exempt from sales and equipment taxes, even though they benefit from many city-provided services. A PILOT payment is often negotiated to cover the proportionate costs of the services they benefit from, based on businesses of similar size or cash flow.
Infrastructure Development Tool
PILOT payments are also used as an inducement to get infrastructure improvements done in rural areas. Current examples include PILOT tax abatements to help cut the costs of putting in wind farms and to generate some local revenue for the municipalities they're near.
.

What is missing from the press release is the money given to each of these "projects".

This is crap.

What is the NET effect of the taxpayer handouts.

When will the financially struggling homeowners be exempt from paying property and school taxes and instead pay pilots that are only a tiny fraction of the tax they would otherwise pay.

We need to be told how much they would pay in taxes using the assesed value and pay the full taxes--the city taxes, all the city fees (that we pay), the county taxes, and the school taxes.

And further, on the net effect.  Give business $10 million taxpayer handout and then they pay $10,000 in a pilot??????   Don't make me laugh.  

The claim of generating sales tax revenue is also NOT VALID.   A co-worker of mine is in the midst of a $30,000 re-do of their kitchen.  They bought all the new appliances at Marcellas, I think he said the fridg, coooktop, the hood, oven, dishwasher, garbage disposal, microwave, and maybe something else.  He and his wife shopped around and chose to buy the stuff at Marcellas.   NOT ONE PENNY OF SALES TAX WAS GENERATED for the city and county.  NOT ONE PENNY!!!!!!!!!!!!!!    They live in Montgomery County and the sales tax that is "collected" from them goes to Montgomery.

Now the other thing when you talk appliances is that buying a dishwasher is TOTALLY EXEMPT from sales tax, ditto a gas range, a built in microwave, such items that are installed under that capital improvements provision, so even if you live in Schenectady county, the taxpayer handout to Marcellas will NOT result in collecting sales tax from the customer in many situations.

The business does not "generate tax revenue" because the tax is paid by the taxpayer who is making the purchase and it is based on where the taxpayer lives.  So the Schenectady taxpayer pays taxes to the city, pays taxes to give the tax handouts to the business, and then on top of that double taxing (in a manner of speaking), pays sales tax on top of that!

But I will say something about that press release.  It's quite obvious that the socialists are running scared, thanks to people like Pat Z who is one who locally started this forcing of divulging otherwise secret information, and other people who have been squeaky wheels, along with internet forums and blogs like this and others, taxpayers are beginning to scrutinize more carefully the use and mis-use of their tax dollars.   So a press release like that is what they think will smooth it over and make the taxpayers happy.  

However, like I said, what is needed is a side by side comparison of what the total property tax bill would be if not tax exempt so that we can see the difference.  MOST DEFINITELY the full tax bill would be many many times larger than the pilot.  And when you think of the multimillions given in the taxpayer handout, it's going to be many years, more likely decades, til the cumulative pilot payment total will reach an amount equal to the handout. And then the pilot will STILL be far less than a full tax bill.

And the other thing needing an answer is how many people have bought existing houses in the city, thus resulting in taxes getting paid on the houses.  Quite the opposite, the more Metroplex spend the taxpayers' dollars, the more people move out of the city, abandon their houses, let their houses go to tax foreclosure.

I was pleased to see this for two reasons.

1)  It means that the outrage is not just isolated to a few people.  Sheeple are (very slowly) waking up.  The corruption is getting the attention of the media.

2)  It is appropriate to hear all sides of the story.  While I disagree with 95% of  DV's opinions on this city and local government - he does provide a great service by giving us - at least those who are open minded - another perspective to consider.  

However I look forward to Pat and others analysis to break this apart.

If I was doing a thorough analysis, I would consider the following:

1)  Ok $4.x million in total PILOT revenue...  During that period of time, how much bond interest did Metroplex have to pay?
2)  The businesses that relocated...  How does their current PILOT compare to their previous property taxes, as well as what their current property taxes should be.
3)  As someone mentioned - how much funding did each of the above get.
4)  Is it possible to FOIL sales tax records from other businesses that may have suffered due to these Metroplex handouts?  (I'm guessing not, but just an idea)

Ya'all better bend over folks. This press release is just the spring board for supporting an increase for the plex's bonding ceiling!!!
Ok....is the present ceiling for the plex $75M? And how much do they have left....about $5M? So out of $75M....how much was the return on investment?

They say the return is $4.5M in pilots and $1M in sales tax. What period of time does this cover???

Can someone confirm or correct this?

If all the pilots were generating the kind of money that we are being led to believe there should be a drop in taxes, more sales tax generated, an increase in population due to created jobs, and more homes would be being sold. This report smacks of a dog and pony show to try to cover some political behinds.

" •     Villa Italia $21,150 with Pilot increasing.  This was vacant garage. "

No it was not, there was a business there!

Quoted from GrahamBonnet

" •     Villa Italia $21,150 with Pilot increasing.  This was vacant garage. "

No it was not, there was a business there!

And the next question is how much in taxes was Villa Italia paying before?  And how much did it reduce the tax base of the municipality that they were pulled out of when they left?  How has that cost been made up?

Again one must look at the iNITIAL investment numbers to accurately deduce the actual return on investment.   What did it cost, interest etc. vs. the return, if any for a NET profit.   Basic accounting, or if it suits the situation, voodoo acct.

Quoted from GrahamBonnet

" •     Villa Italia $21,150 with Pilot increasing.  This was vacant garage. "

No it was not, there was a business there!

Everyone may want to refer to the last CC Comm. mtg. of 2/7/11.  In it you will hear discussed a expansion loan of $600,000.00 for Villa Italia discused by the CC and Mr. Gillen.  It cites a bldg. value of 1.2 million.   This is to be used as collateral for the expansion loan, from whom I do not know..   It is stated that they have repaid 1 loan and are current on the other.   Is there a lien on the bldg. and can they borrow against a bldg. if it is not completely theirs?   Can they only borrow against what they have only paid back?  Maybe someone out there can get the facts better than I.     The comm. mtg. was being aired on OSM.

Three questions

1. How much business did these businesses take away from businesses that pay full tax?

2. Metroplex spends $8 M a year to generate $1 M in tax revenue?

3. Why haven't taxes gone down in the city?

Obviously, the Nattering Nayboobs of Negativity can't handle the  TRUTH ... even when it slaps them across theface ----

METROPLEX is a success ---- properties which paid little or no property tax are now generating millions of dollars in PILOTS and the PILOTS are increasing each year.

Great job -- Mr. Gillen and your great team over their at Metroplex and the County Economic Development office.


and to you Nattering Nayboobs ... go suck a lemon.

Quoted from DemocraticVoiceOfReason

Obviously, the Nattering Nayboobs of Negativity can't handle the  TRUTH ... even when it slaps them across theface ----

METROPLEX is a success ---- properties which paid little or no property tax are now generating millions of dollars in PILOTS and the PILOTS are increasing each year.

Great job -- Mr. Gillen and your great team over their at Metroplex and the County Economic Development office.


and to you Nattering Nayboobs ... go suck a lemon.

Obviously YOU cannot handle the TRUTH, DV, even when it slaps you in the face.

Metroplex handed out gazillons more money than the taxpayers will ever see back on any pilots for at least a generation.  

BAd job Mr Gillen when the NET EFFECT IS A LOSS---LOSS TO THE TAXPAYER.  Give a business multimillions in handouts and then get a a few thousand in a pilot.  

What is needed is for these buinesses to be mandated to pay back the metroplex handout AND pay the full taxes based on full value property assessment.


By the way DV, if Metroplex has done such a good job, then would you care to tell us what peoples tax bills were BEFORE Metroplex and what peoples tax bill are today????????   Well???????   Try answering that one.   I have cousins to live in the city and who live in the same house for 25 years, they have NOT made an additions to the house, and their tax bill as nearly tripled since Metroplex.  Now explain that one DV.  

If Metroplex is so great then explain why the crime rate has skyrocketed compared to before Metroplex.
If Metroplex is so great, then explain why property values are plummeting AND tax bills have risen out of sight.
If Metroplex is so great, how come no one wants to buy a house in the city?
If Metroplex is so great, how come people are leaving the city in droves or abandoning their houses altogether, such that the city has a record high number of vacant residential houses?


Answer those questions DV.    Go suck a lemon DV because the ONLY ones who have benefitted from Metroplex are the political cronies, and the millionaires downtown.