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EDA will hold another hearing for Troutburg tax breaks on Feb. 3

By Tom Rivers, Editor Posted 17 January 2014 at 12:00 am

Agency sees 53:1 cost benefit ratio for incentives

ALBION – The Orleans Economic Development Agency will have another public hearing on a tax abatement plan for the Cottages at Troutburg, a 10-year proposal that would save the developers $227,777 in taxes with the town of Kendall, Orleans County and Kendall School District.

The abatement plan applies to the 126 acres by Lake Ontario, and doesn’t include future improvements. Any of the new cottages, a sewer plant and other land improvements would taxed by the three government entities.

The tax breaks drew a crowd of 75 residents to a public hearing on Wednesday morning at Kendall Town Hall. Many of the speakers objected to giving tax breaks for residential development.

The EDA board was scheduled to vote on the PILOT (payment of lieu of taxes) plan this morning, but instead will take up the issue on Feb. 14. The board and EDA chief executive officer Jim Whipple will give residents another chance to comment on the plan on Feb. 3 during a 7 p.m. meeting at Kendall Junior-Senior High School.

The EDA sees the project as a significant benefit to the community, boosting the tax base by about $30 million if the 400 cottages planned for the site come to fruition.

The EDA completed a cost-benefit analysis of the project. It counted $12,139,093 in benefits to the community over the 10-year tax abatement schedule.

If 300 cottages are built, the EDA calculated $7,139,250 would be paid in property taxes for the 10 years, about $900,000 would be generated in sales tax by the residents of the cottages, and $2.9 million would be generated in wages for 13 workers at the site. Other benefits identified by the EDA: $425,000 in building material, $425,000 in building labor, and about $200,000 in other expenditures for equipment and “soft costs.”

For every dollar that is given up in the tax breaks, the EDA calculated $53 is coming back to the community over the 10 years. The EDA uses a 10 to 1 ratio as a minimum for a tax abatement plan.

“This is well above that,” Whipple told the EDA board this morning.

Although the tax break proposal would save the Wegman Group $227,777 in taxes on the land, it also sets a schedule for the company to pay $186,363 to the three local governments over 10 years.

The PILOT sets the value of the land and existing structures at $1,305,200. The tax bill for that assessment would be $41,414 per year based on a combined $31.73 tax rate for the town, school and county.

The Wegman Group would pay no taxes on the land the first year of the plan, and would pay 10 percent more of the $1,305,200 assessment each following year until it’s at the full tax bill.

The land had been a Salvation Army camp and was tax exempt for about a half century. The Wegman Group paid $1.5 million for the property and is spending about $1 million for site improvements, including a sewer plant and new roads.

“He’s investing a lot of money,” Whipple told the EDA board about the Wegman Group.