Plan would save Troutburg developers more than $200K in taxes

By Tom Rivers, Editor Posted 8 January 2014 at 12:00 am

KENDALL – A proposed tax abatement plan would save a company more than $200,000 in property taxes over the next decade as it works to develop The Cottages at Troutburg.

The Orleans Economic Development has crafted a 10-year tax savings plan for the 126-acre former Salvation Army site in the northeast corner of Kendall along Lake Ontario. The plan only applies to the land. Any new seasonal cottages will be taxed at 80 percent of their value.

The land is currently assessed at $1,305,200. The EDA will have a public hearing 9 a.m. Jan. 15 at the Kendall Town Hall for a tax abatement plan or PILOT (payment in lieu of taxes).

The EDA is proposing the Wegman Group not pay any taxes on the land for the first year and then pay incremental 10 percent increases in taxes until it is at 100 percent after 10 years.

The plan would save the company $41,414 the first year, according to Orleans Hub calculations. (I multiplied the $1,305,200 assessed value by a $31.73 tax rate. The rates in Kendall include $17.21 for the school district, $10.09 for the county and $4.43 for the town.)

That loss in revenue would be absorbed by other residents. The company would pay about $4,145 in the PILOT the second year with $4,145 increases added the following years until it is as the full $41,414. Orleans Hub calculated the plan would save the Wegman Group $227,791 over 10 years.

The EDA typically works out PILOTs to reduce the tax burden for companies when they are in the early stages of projects. The deals typically help companies with their cash flow so they can get their projects off the ground in the early capital-intensive stages.

The Wegman Group has about 10 cottages under construction. The company believes 400 cottages could be built at the site over the next decade, increasing the site’s assessed value by about $25 million.

To offset the loss in the taxes for the land through the PILOT, the Wegman Group would need about 25 of the new cottages to be built. That assumes they are assessed for $60,000 with the town then discounting them by 20 percent due to their seasonal status.

The site historically didn’t generate any tax income for the community because it was tax exempt under the Salvation Army.

The PILOT plan isn’t final. Residents and local officials will have a chance to weigh in on the plan during the public hearing on Jan. 15.