County, town, village, and school officials are considering a 20-year tax break agreement with the developers of the proposed grocery store and townhouses in Middleburgh.
The tax agreement, known as a payment in lieu of taxes or PILOT, would have two components. The proposal was announced at last week's Middleburgh school board meeting. The proposal will be officially presented to the county, village, town, and school this month.
The townhouses and supermarket are being proposed for the land across from the former pharmacy on Route 30.
The PILOT will be split between the proposed town houses and the supermarket, according to the plan detailed by MCS Superintendent Michele Weaver.
The tax break agreement for the store is much more complex than the one for the townhouses.
According to the proposed PILOT, the developers would not pay any additional taxes on the supermarket and former pharmacy building for the first five years of the agreement.
In other words, the assessed value of those parcels would not be increased. Currently, about $2,200 in property taxes is being paid on those parcels.
For the first five years the developers would continue to pay a total of $2,200 a year, with no loss or gain to the school, village, town, and county.
For years six through 10, the owners would be paying the current $2,200 plus five percent of the assessed value of the buildings, which are still to be determined.
The payments for years 11 through 15 would be the current $2,200 plus 10 percent of the assessed value of the buildings and for years 16 through 20, the payments would be $2,200 plus 20 percent of the assessed value.
After the end of the 20-year agreement, the property would be assessed at 100 percent of the value.
The school district, along with village, town, and county, will be getting more in tax revenue in the future, Jim Becker, one of the developers, stressed last week.
"You're not losing taxes, this is on top."
The smaller portion of the PILOT would be a tax break agreement model that would be built for the townhouses.
The model would be assessed at half of the assessed value. The half assessment would also be for any townhouses that would be built and leased. There would be no tax break on townhouses that were built and purchased.
In all, 15 buildings with 60 townhouses are proposed and they would be built on an "as needed" basis.
The townhouses are in integral part of the project, Mr. Becker told school board members last week.
"We're not going to do one without the other," he said.
He added, "The grocery store, we'll lose money on."
The developers are trying to keep the rent low on the supermarket to help it succeed, Mr. Becker told board members.
"It's not a money grab on our part."
A total of about $14,500 is currently being paid on all the parcels that would be included in the project.
The developers will also help the managers of the supermarket buy equipment and those costs are coming in high, according to Mr. Becker.