PILOT agreement better than possible alternative
Monday, June 25, 2012 - 12:51 pm

To the Editor:

This Tuesday, the Potsdam Town Board will be asked to approve or disapprove a payment in lieu of taxes (PILOT) agreement with Potsdam Affinity Cottages for the multi-million dollar college themed housing development proposed for Outer Main Street. Their vote, like that of the Village and School boards, has the ability to veto the entire deal. At stake is over $2.2 million in tax revenue for our community.

The request for a PILOT is not a new phenomenon, nor is it unique to Potsdam. PILOTs are everywhere these days and both the Town and PCS have entered into numerous such agreements in the past. Pretty much whenever a sizable investment is made by a developer, you can be assured that some form of PILOT will be requested.

PILOTs are inherently unfair. Designed to improve the odds of a project’s success, they decrease the costs incurred by a developer, unleveling the playing field. In many cases, the ability to secure a PILOT determines whether a project gets built or not, while in other cases the denial of such an agreement has no effect on the developer’s plans. This is the catch. Municipalities like the Town and School District are not mind readers. They simply do not know whether denial will result in a taxable project or a vacant field.

In a nutshell, this 12-year agreement provides for $2.2 million in tax revenue. Were the Town or School District to exercise their veto, the result would be either $3 Million in taxes, or nothing. This is a cruddy gamble and if it makes you sick to have to choose between millions in tax relief for you and your neighbors or keeping the moral high ground, good.

For myself, I grudgingly support tax relief. As PILOTs go, this one was well negotiated, the terms are much more equitable than Affinity’s original proposal. Despite whatever you hear from members of the Town or School Boards, both groups were represented at the negotiating table as equals. Not one of these folks can claim to have been blindsided by this agreement.

There is a desperate need to add taxable infrastructure to our community. Everyone cries this mantra. If your desire for tax relief is as strong as mine, contact the PCS District Office or the Town and make sure your voice is heard, before they jeopardize millions in revenue.

Tim Connolly, Potsdam