What’s in it for us?

Promoting development, abating taxes

By LIAM MAYO
Posted 4/5/22

MONTICELLO, NY — It’s often said that only two things in life are certain: death and taxes. With exemptions and abatements (the lessening of taxes), the latter is far from …

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What’s in it for us?

Promoting development, abating taxes

Posted

MONTICELLO, NY — It’s often said that only two things in life are certain: death and taxes. With exemptions and abatements (the lessening of taxes), the latter is far from preordained.

In Sullivan County, tax exemptions and abatements fall to the purview of the Sullivan County Industrial Development Agency (IDA). The IDA, founded in 1970, has the authority to offer tax benefits as incentives for development in the county.

While the IDA’s uniform tax exemption policy—the policy that guides the exemptions and abatements it offers—was first set in 1970, the nature of development is ever-changing, and the IDA’s policies have required revision as the county has seen fit to prioritize different types of development over the years. Its most recent round of changes, proposed by a six-member committee formed last September by legislative chair Rob Doherty, was voted on and approved at the IDA’s March 14 meeting.

These changes highlight some of the county’s most pressing concerns: issues of housing, opportunities for sustainability and development at the county’s international airport.

Affordable housing

A number of the changes proposed for the tax exemption policy address the county’s issues with housing affordability.

A lack of affordable housing in the county poses a significant challenge for the county’s workforce, with people unable to find housing even while working, and employees unable to find workers living locally. To that end, the IDA passed a number of measures to incentivise employers to build affordable housing for their employees.

In discussing the policy’s general abatement program, the policy’s default benefits program, the committee made special note of distribution centers for fulfilling online orders. A distribution center, wrote the committee, is a type of project “which creates jobs but for which there seem to be few potential employees, with few or no housing options.” The IDA will now require distribution center developers taking part in its program to build or renovate one housing unit per 12,500 square feet of space at minimum.

The IDA instituted a similar requirement for the tourism industry program, giving developers the option of a more attractive benefits schedule with a minimum requirement of one workforce housing unit for every four hotel rooms and the like constructed. The destination resort program, a separate program aimed at large-scale tourism projects, was eliminated and its projects were included with the tourism industry program to further push that program’s new housing requirement.

Sustainable development

In proposing changes to the tax exemption policy, the committee chose to highlight sustainability as an issue of importance. It did not go so far as to provide that path with unequivocal support, instead offering changes to expand and restrict its potential for growth in the county.

On the expansion side, the IDA integrated the green technology manufacturing program into the targeted manufacturing program.

The existing green technologies program, established in 2008, specifically supported manufacturers of green technology who belonged to the Green Technology Park at SUNY Sullivan. Eliminating that program, and including such manufacturing in a more general program, allows that development to occur anywhere in the county.

When it came to the topic of renewable energy, specifically the topic of community solar projects, the committee leaned more toward restricting such projects’ placement.

“During our meetings with local elected officials, it became apparent that there is great variation among municipalities with respect to solar energy development as a land-use planning project,” the committee wrote. “Many Sullivan County towns are amenable to solar facilities locating within their boundaries, but some towns do not want to encourage the development of solar facilities.”

To that end, the committee recommended that the IDA preserve a pre-existing requirement for solar project applications to include a letter of support from their host municipalities.

Taking flight

The Sullivan County International Airport has experienced recent signs of an imminent revitalization.

A contract signed last year between Hatzolah Air, an international air-ambulance non-profit, will bring a potential flagship tenant to the airport with plans to build a state-of-the-art hangar. According to airport superintendent Jim Arnott, the airport is actively seeking out other potential developers, and staff hope to attend industry conferences in June and October to connect with potential customers for the airport.

The IDA created a new program to support that development in its most recent changes. According to the committee, “We understand that in many neighboring states, real estate taxes are not assessed on airport properties. To overcome this competitive disadvantage and capitalize on the opportunity presented at the airport,” it recommended a policy to provide sales tax and mortgage tax abatements for the respective aspects of hangar projects, and a 30-year abatement schedule affecting 75 percent of the assessed value for the real estate itself.

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