Municipalities will likely be getting less in tax payments than they hoped out of the Guilford Mills sale.
But local leaders are willing to trade lower tax revenue in exchange for the hundreds of jobs buyer Green Recycling Solutions International is planning to bring to Schoharie County.
The sale of the county-owned Guilford plant moved closer to reality Friday, when representatives from the county, Cobleskill town and village and Cobleskill-Richmondville met to see the payments in lieu of taxes (PILOT) GRSI is proposing.
All four must approve the PILOT for the sale to go forward.
The county, town and village have received nothing in taxes from Guilford for years. Under education law, however, the school district has been receiving $107,000--from the county--as its tax revenue from the plant.
All that will change under the proposed PILOT.
GRSI would pay $60,000 the first year, with $29,442 going to the school, $12,380 to the county, $13,564 to the village and $4,714 to the town.
The school district, then, would see a revenue loss of nearly $80,000, while the three municipalities would receive new revenue.
County Treasurer Bill Cherry pointed out, however, that the school's been getting revenue based on the plant's $4.5 million assessment, which he said is unrealistic.
"The truth is, Cobleskill-Richmondville has been getting an artificial amount for years," Mr. Cherry said.
The county never asked Cobleskill Assessor Alan Danforth to lower the assessment because a higher number made the plant look more attractive, Mr. Cherry said.
And, he added, as GRSI adds jobs over the years, "there's a huge upside. . . more tax revenue for the school and new students."
The $60,000 PILOT payment in the first year escalates every year until the 10th year of the agreement, when GRSI would pay $210,000 to the three municipalities and the school district.
Supervisor Leo McAllister wasn't impressed.
"We're not going to nix the deal on a couple thousand dollars," he said, "but they're getting a heck of a deal.
"We'd like the PILOT to be higher, but it is what it is. We're willing to give it a try."
Mayor Linda Holmes agreed, saying that the village's share is better than nothing.
But, Mayor Holmes added, "The whole idea is to create jobs."
Jobs are an essential element of the PILOT. In order to continue getting its tax breaks, GRSI must create 200 jobs within two years and 300 within three years.
"If they don't, the PILOT ends," said Ron Filmer, CEO of the Industrial Development Agency, who outlined the PILOT.
Another key factor in the agreement is that GRSI pay its fair share of taxes. Although $60,000 in the first year may seem low, the amount is what it should be if Guilford were assessed at what it's really worth--about $1.2 million, Mr. Cherry said.
"It's a fair share now," he said. "With the anticipated improvements to the plant, in 10 years it will reach the full taxable value of about $4 million.
"There are no giveaways. This is GRSI wanting to pay its fair share."
And, Mr. Filmer added, the tax breaks offered by the PILOT are necessary to get the project under way.
"GRSI needs assistance to get going while it's under construction and rehab," he said. "We're hoping this happens. We're cautiously optimistic."