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Projects eligible for New York State Empire Zone benefits must first utilize the real property tax benefits associated with the Zone program before seeking real property tax abatement from the Agency.
In NYS, property owners pay a real property tax based upon the assessed value of improvements to a site. For IDA eligible projects, the property becomes 100% exempt from ad valorem real property taxes. In consideration of the local taxing jurisdictions, the IDA enters into a Payment In Lieu of Taxes (PILOT) agreement with the applicant.
(A) General. Pursuant to section 874 of the act and Section 412-a of the Real Property Tax Law, property owned by or under the jurisdiction or supervision or control of the Agency is exempt from general real estate taxes (but now exempt from special assessments and special ad valorem levies). However, it is the general policy of the Agency that, notwithstanding the foregoing, every non-governmental project will be required to enter into a payment in lieu of tax agreement (a “PILOT Agreement”), either separately or as part of the project documents. Such PILOT Agreement shall require payment of PILOT payments in accordance with the provision set forth below.
(B) PILOT Requirement. Unless the applicant and/or project occupant and the Agency shall have entered into a pilot Agreement acceptable to the Agency, the project documents shall provide that the applicant and/or the project occupant shall be required to make PILOT payments in such amounts as would result from taxes being levied on the project by the taxing jurisdictions if the project were not owned by or under the jurisdiction or supervision or control of the Agency. The project documents shall provide that, if the Agency and the applicant and/or project occupant have entered into a PILOT Agreement, the terms of the PILOT Agreement shall control the amount of PILOT payments until the expiration or sooner termination of such agreement.
(C) PILOT Agreement. Unless otherwise determined by resolution of the Agency, all PILOT Agreements shall satisfy the following general conditions:
(1) Amount of Abatement. The general policy of the Agency is not to provide the applicant and/or project occupant with any abatement other than (a) a Tier I Enhanced Abatement, (b) a Tier II Standard Abatement and (c) Tier III Limited Abatement (Bethlehem Central School District Only) as follows:
Tier I: Enhanced Abatement. This abatement is designed to enhance the regional competitive position of the Town in attracting high quality business development that meets very specific economic benefit criteria. The Tier I abatement schedule has been structured to fall in the middle of the continuum of abatement programs offered by competing regional communities and facilities (business parks). The proposed abatement schedule is as follows:
As with all BIDA PILOT programs, the abatement is against the increase in assessed valuation resulting from the completion of the project. It also assumes that the abatement program begins after the completion of construction and a Certificate of Occupancy (CO) has been issued for the project.
A separate application will be used for the Tier I abatement program. To be eligible for the Tier I abatement, an applicant must demonstrate the project’s ability to substantially meet the following criteria:
1. Extraordinary new job creation or capital investment
2. Net new business investment in the Capital Region
3. Reuse or redevelopment of abandoned or underutilized real estate
4. Consistency with the Town’s comprehensive plan recommendations
5. Market penetration; potential for catalytic effect for subsequent projects
6. Consistency with regional target industries
7. Business development that promotes economic diversification
In addition, applicants will be required to submit an economic impact analysis in a form that is acceptable to the BIDA that demonstrates the project’s economic benefits based on the Tier I abatement schedule. In addition, the application should include information that demonstrates the applicant’s relevant experience in undertaking similar projects, as well as their credit worthiness and financial strength. Also, applicants will be required to indicate that in the absence of the Tier I incentive, the project will not proceed.
Tier II: Standard Abatement. This tier is the typical abatement program that the majority of applicants will be entitled to and mirrors the current tax abatement policy of the Agency. The abatement is available Town-wide and is structured similarly to the Section 485(b) abatement program. The level of incentive is distinguished from the Tier I abatement only by the fact that it includes the abatement of the BCSD taxes for projects located within the district. Similar to the Tier I abatement, the abatement commences at 50% of the increase in assessed valuation resulting from a project and then declines by 5% per year for a ten year period. This abatement is designed for projects that are eligible for IDA assistance and meet a standard level of economic impact including job creation, business development and tax generation. This abatement program provides abatement against the Town, County and
School District
taxes throughout the Town.
Tier III: Limited Abatement (
Bethlehem
Central
School District
Only). This tier is the basic tax abatement scenario is that is available to all BIDA applicants whose projects are located within the Bethlehem Central School District (BCSD). In effect, this abatement limits the tax abatement to the same level of abatements that a non-IDA project would be entitled to. This tier correlates to the Section 485(b) abatement program that all commercial projects are entitled to apply for. Relating to projects located within the boundaries of the Bethlehem Central School District (BCSD), this abatement is limited to relief from
Albany
County
and Town of
Bethlehem
taxes only as the BCSD has taken the steps necessary to opt out of the abatement program. The program provides for an initial 50% abatement on the increase in (County and Town) assessment resulting from a project and the abatement declines by 5% per year for a 10-year period. This abatement should be reserved for projects that meet IDA eligibility requirements but have minimal or relatively modest economic benefits as measured in terms of new employment opportunities, consistency with the recommendations of the Town’s Comprehensive Plan, tax base expansion, or local economic multiplier effects.
The amount of any PILOT payment would equal the amount of taxes that would be levied on the project by the affected taxing jurisdictions if the project were not owned by or under the jurisdiction or supervision or control of the Agency. If an applicant or project occupant desires to obtain an exemption under Section 485-b or any other abatement provided by the State and/or local law, it is the responsibility of the applicant and/or project occupant to apply for same.
(2) Special District Taxes. As indicated above, the Agency is not exempt from special assessments and special ad valorem levies, and accordingly these amounts are not subject to abatement by reason of ownership of the Project by the Agency. The PILOT Agreement shall make this clear and shall require that all such amounts be directly paid by the applicant and/or project occupant.
(3) Payee. Unless otherwise determined by resolution of the Agency, all PILOT payments payable to an affected tax jurisdiction shall be assessed, billed and collected directly by the same officials which assess, bill and collect normal taxes levied by such affected tax jurisdiction. Pursuant to section 874(3) of the Act, such PILOT payments shall be remitted to each affected tax jurisdiction within thirty (30) days of receipt.
(4) Enforcement. An affected tax jurisdiction which has not received a PILOT payment due to it under a PILOT Agreement may exercise its remedies under Section 874(6) of the Act. In addition, such affected tax jurisdiction may petition the Agency to exercise whatever remedies that the Agency may have under project documents to enforce payment and, if such affected tax jurisdiction indemnifies the Agency and agrees to pay the Agency’s costs incurred in connection therewith, the Agency may take action to enforce the PILOT Agreement,
(D) Required Filings. As indicated in subsection (B) above, pursuant to Section 874 of the Act and Section 412-a of the Real Property Tax Law, no real estate tax exemption with respect to a particular project shall be effective until an exemption form is filed with the assessor of each county, city, town, village and school district in which project is located (each, a “Taxing Jurisdiction”). Once an exemption form with respect to a particular project is filed with a particular Taxing Jurisdiction, the real property tax exemption for such project does not take effect until (1) a tax status date for such Taxing Jurisdiction occurs subsequent to such filing, (2) an assessment roll for such taxing Jurisdiction is finalized subsequent to such tax status date, (3) such assessment roll becomes the basis for the preparation of a tax roll for such Taxing Jurisdiction, and (4) the tax year to which such tax roll relates commences.
(E) Real Property Appraisals. Since the policy of the Agency stated in subsection (C) (1) is to base the value of a project for payment in lieu of tax purposes on a valuation of such project performed by the Assessor of the applicable Taxing Jurisdiction, normally a separate real property appraisal is not required. However, the Agency may require the submission of a real property appraisal if (1) the assessor of any particular Taxing Jurisdiction requires one or (2) if the valuation of the project for payment in lieu of tax purposes is based on a value determined by the applicant or by someone acting on behalf of the applicant, rather than by an assessor for a Taxing Jurisdiction or by the Agency. If the Agency requires the submission of a real property appraisal, such appraisal shall be prepared by an independent MAI certified appraiser acceptable to the Agency.
