Mixed IDA decision on Crossgates hotel tax breaks

The Enterprise — Elizabeth Floyd Mair

Deliberating: Donald Csaposs, left, the IDA’s chief executive officer, and William Young Jr., IDA chairman, look through their documents on the Pyramid Companies’ request for tax relief while A. Joseph Scott III, the IDA’s attorney, at right, argues a point.

GUILDERLAND — Public opinion has run strongly in favor of the Crossgates Mall hotel project. Residents’ response to the developer’s application for tax breaks from the Guilderland Industrial Development Agency has been more mixed.

Pyramid Companies had applied for a total of about $2.4 million in sales, mortgage-recording, and property-tax exemptions on its proposed 192-unit hotel.

The hotel would be located on Western Avenue, just to the west of the mall’s main entrance and exit.

The IDA’s vote on Wednesday night on Pyramid’s request was mixed. The board decided to approve Pyramid’s request for sales and mortgage-recording tax breaks, but it rejected the request for property tax relief in the form of an agreement on payments in lieu of taxes, or PILOT.

The estimated amount of the sales tax exemption is $800,000, and of the mortgage-recording tax, $230,000, for a total of just over $1 million.

James Soos, of Pyramid Management, declined to comment on the vote after the meeting.

The board took comments from the public. There were two, both negative. One was from Albany County Legislator Mark Grimm, who represents Guilderland and the other was from Karen White, who said that Guilderland places restrictions on residents’ water use every summer, and predicted that the new hotel’s use of water for laundry, toilets, and showers would exacerbate this problem.

The board also heard a recommendation from Chief Executive Officer Donald Csaposs — who has no vote — before it voted.

Csaposs outlined to them his reasons for recommending granting the sales and mortgage tax exemptions and turning down the PILOT agreement. Among his reasons for recommending approval of the two forms of exemption were that the completed project is expected to generate $460,000 in sales tax and $340,000 in occupancy tax during the first year of operation, and that these figures will rise to $637,000 and $473,000 respectively in the fifth year.

His reasons for suggesting turning down the PILOT agreement included: the project is a retail facility, rather than one involved in manufacturing or high-tech; the wage levels for permanent jobs are mostly not at “head of household” or high-tech levels; the IDA has no history of granting any form of exemption other than sales and mortgage tax exemptions on retail projects.

The level of benefit to the community does not rise to the level that IDA staff can recommend the approval of the request for a PILOT agreement, Csaposs told the board.

Board member James Shahda asked the others if anyone else had any inclination to discuss lowering the amounts of sales and mortgage tax exemptions to be granted.

The IDA’s attorney, A. Joseph Scott III said that it would be complicated to change the amounts. The board cannot treat one tax jurisdiction differently than another, and so it would need to confirm that any amount lowered would proportionately affect all parties involved, such as the state or the county.

Chairman William Young Jr. also said that Guilderland residents would bear all the loss associated with a PILOT agreement, whereas, for instance, half of the revenue from sales tax goes to the state. So, he argued, approving just the sales and mortgage tax exemptions, and turning down the request for property-tax relief, removes a significant proportion of the burden on town residents.  

All five member of the board who voted, voted the same way. Christopher Bombardier was absent, having recused himself from both the vote and also the discussion because, he said, of involvements with the principals.


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