No PILOT for Phillips Hardware but $315K in other tax breaks granted

GUILDERLAND — At its April meeting, the Guilderland Industrial Development Agency voted against granting real-property relief to Phillips Hardware. Phillips was seeking $87,000 in relief in the form of a PILOT, or payment in lieu of taxes, to help with building a new and bigger hardware store at the corner of routes 146 and 158 to replace its aging store, and to add a convenience store with gas pumps.

The PILOT abatement, over 10 years, would have meant a loss in tax revenue of about $82,000 for the Guilderland School District and $4,800 for the town of Guilderland, the board heard at its March meeting. County taxes would have been affected as well.

Phillips did receive two other forms of tax relief, which the IDA voted to grant in March, totalling about $315,000 in exemptions from sales and compensating-use tax and mortgage-recording tax.

Six members voted in April, Chief Executive Officer Donald Csaposs said, and the vote was 4 against and 2 for granting the PILOT to Phillips Hardware.

In April, the IDA received letters against granting the PILOT from both the school-board president on behalf of the board and from the town supervisor for the town board.

At the March meeting, Csaposs pointed out that the actual amount of tax relief to be provided would be a function of the assessed value of the completed project, a figure that no one can predict with certainty.

In his letter, Guilderland Supervisor Peter Barber wrote, “The Town Board respectfully objects to the IDA’s proposed determination that the project’s economic benefit, including the creation of three full-time, one part-time, and three seasonal positions, justifies the extraordinary awarding of any real property tax exemption.”

Barber continued, “The IDA has a well-established history which shows that it sparingly awards real property tax exemptions in only special circumstances where the applicant meets a documented and unsatisfied need, such as a senior facility which reserves beds for Medicaid patients, or provides a substantial economic benefit. The present application falls far short of this precedent.”

If Phillips Hardware’s request for a PILOT were to be granted, Barber wrote, it could set a precedent that would “substantially lower the threshold for such relief in future applications and unfairly shift tax burdens to other property owners.”

School-board president Christine Hayes wrote in her letter that the board “generally disfavors” the granting of property-tax exemptions. An immediate impact of a PILOT agreement could be, Hayes wrote, a lowering of the district’s tax levy-limit threshold, which “may create the potential for exceeding the ‘tax cap’ thereby requiring a supermajority of voters to pass the budget or alternatively, create fiscal challenges in the district’s ability to meet student needs.”

However, Hayes wrote, under certain circumstances that pose a substantial economic benefit to school-district taxpayers, the district might consider supporting, “at some level,” a specific request for a PILOT.

Jonathan Phillips, who owns Phillips Hardware, could not be reached for comment before press time, and his attorney, Paul Goldman, did not return a phone call.

The only PILOT the Guilderland IDA has granted was to Promenade at University Place, a facility for seniors that includes those with low incomes.

In March, the IDA board had voted to separate Phillips’s requests and grant the sales-tax relief as well as the mortgage-recording tax exemptions, so that Phillips could proceed with securing financing for the project.

At that time, the agency members voted to postpone any decision about the PILOT until April, so that they could get more information.

Pyramid, owner of Crossgates Mall, also applied for those same three types of tax relief for its hotel project on Western Avenue next to Crossgates. It got sales and mortgage-recording tax relief of just over $1 million but did not get a PILOT. Pyramid has since applied to the IDA for about $1.2 million in tax relief on a proposed complex of 222 apartments and townhouses it hopes to build on Rapp Road in Guilderland.


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