GUILDERLAND — The Guilderland Industrial Development Agency voted on March 11 to approve two forms of tax relief for Phillips Hardware, to help the local company build an expanded hardware store and a separate convenience store, with Dunkin inside, and with gas pumps outside.

The new hardware store will be just over twice the size of at the aging store at the intersection of routes 158 and 146. In addition, the board also decided to approved the concept of entering into a Payment in Lieu of Taxes, or PILOT, with the applicant.

The total amount of tax relief is estimated at about $315,000, which breaks down to approximately $188,000 in sales and compensating-use tax exemptions; $40,000 in mortgage-recording tax exemptions; and $87,000 in real-property tax exemptions.

PILOT

IDA board members heard at the March 11 meeting that the amount of the PILOT abatement over 10 years would mean a loss in tax revenue of about $82,000 for the school district and $4,800 for the town.

Donald Csaposs, the IDA’s chief executive officer, said this week, “The actual amount of tax relief to be provided would be a function of the assessed value of the completed project. Neither I nor anyone else can predict that value with certainty.”

IDA Chairman William Young asked at the meeting if the school district and the town — the two entities that would be affected — had weighed in with the IDA board with their thoughts about a PILOT agreement.

A. Joseph Scott of Hodgson Russ, who advises the Guilderland IDA, said that neither had weighed in, and that president and owner Jonathan Phillips was trying to put financing together by the end of the week and that the agency had been moving quickly to accommodate that schedule.

Splitting consideration of the PILOT request from the other two forms of tax relief and treating them differently would allow Phillips to move forward with his financing, Scott said.

Scott said that, if there is “some hue and cry” from the town and the school district, the agency can take that into account at its next meeting.

Both the town and the school district indicated this week that they had received notification of their right to comment on the request.

Scott said this week that the county is also an affected tax jurisdiction, and that the IDA is required to notify it as well as the school district and the town. Legally, the agency is obligated to notify these entities of any public hearing on a PILOT project, which it did, and then to notify them again in the case of any PILOT application that is a deviation from the form traditionally used.

Phillips’s is a deviation, Scott said, which would actually give Phillips less of a tax break than the traditional arrangement. The traditional one, Scott said, gives real-property tax breaks of 50 percent for each of the first five years, and the percentage then decreases by 10 percent for each of the next five years, until it reaches 0 at year 10. With Phillips’s proposed arrangement, the tax break would be for 50 percent in the first year, but it would then decrease by 5 percent each year.

Scott said this week that the reason for notifying the taxing jurisdictions was both from the board’s desire to be transparent and also a legal obligation. “The board members had the right inclination,” he said.

The Guilderland Town Board discussed the Phillips PILOT application at its meeting on March 19, with town Supervisor Peter Barber telling the board that the IDA had only granted one PILOT application before, to Promenade at University Place, a facility for seniors that included those with low incomes.

Pyramid applied for a PILOT for its hotel project on Western Avenue in front of Crossgates Mall, but it was not granted, although it did get sales and mortgage-recording tax relief totaling just over $1 million from the IDA.

Barber reminded the board that the IDA is a completely separate body and can choose to ignore any objections, if the town board, school district, or county should choose to object. Barber said he is concerned that approving Phillips’s application would set a precedent.

Councilman Lee Carman said he would be abstaining from any discussions and votes because he helped Phillips secure financing for the project.

The superintendent of the Guilderland schools, Marie Wiles, said on Tuesday that the school board’s Business Practices Committee plans to discuss the matter and report back to the board. She said she couldn’t comment any further at this point.

Csaposs said this week that the public hearing on this project is closed. He anticipates there will be an agenda item relating to a decision on the applicant’s request for a PILOT.

Context

On March 11, Phillips’s attorney discussed the report that had been done for the IDA by Camoin Association on the number of stores selling hardware within a radius of a 14-minute drive and about the demand for hardware and other products that the expanded hardware store would sell as well as for gas. The study set the radius as the distance driven in 14 minutes because, it said, on average, consumers will drive 14.07 minutes to make home and garden supply purchases.

In that area, 26 businesses sell hardware, paint, and lumber, the study says. Of those, four are hardware stores, it said, including the Phllips at routes 158 and 146, as well as the Phillips Hardware in Voorheesville, Illinois Tool Works, and Robinson Ace Hardware. Four of the 26 are “home centers”: 84 Lumber, Bellevue Builders, Home Depot, and Premium Plywood Products.

Phillips Hardware, based locally, has a total of five hardware stores in the area. According to the IDA staff project review and recommendation, which was written by Csaposs, the Phillips family has been in the hardware business in the Albany area since the late 19th Century. Jonathan Phillips lives in Guilderland and is active in local sports and in community philanthropic events.

The staff review notes that projected employment for the new hardware store and convenience store in the first year of operation is seven full-time, three part-time, and three seasonal employees, “a meaningful increase from the current employment level.”

Scott said that the report concluded that the project “fulfills a unique need in the community.” In fact, the report makes many conclusions, none of which suggest definitely that the store is needed. One of its conclusions is, “The trade area is well served by stores that sell building materials and supplies. However, Phillips Hardware fills a unique need within the community by being a local source for tools, services, small gifts and knick-knacks and favorite brands.”

Csaposs had earlier issued a recommendation to the agency that it approve Phillips’s request for sales tax and mortgage-recording tax exemptions estimated at $188,400 and $40,310 respectively, but that it not grant a PILOT.

The meeting was sparsely attended. David M. Aitken, who is director of government affairs for Pyramid, the company that owns Crossgates Mall and wants to build a 222-unit apartment-and-townhouse complex next to the mall, was among the few onlookers. Aitken has been representing Pyramid at its meetings with the IDA.

In January, Csaposs had issued a recommendation that the agency deny Pyramid’s request.

Shortly after his recommendation came out, the IDA had been poised to vote on Pyramid’s application, but at the last minute, mid-meeting, Aitken asked for the vote to be tabled so that he could discuss Csaposs’s recommendation with staff and with counsel.