In 2000, our city of IDA implemented a uniform tax exemption policy (UTEP) and updated it in 2008, almost 12 years ago. This UTEP describes three levels of AYATs that could be offered to companies that meet certain criteria. In 2018, it was found that the Sailfish (Amazon) project was eligible for a 15-year-old pilot. This initial offer meant that the project did not have to pay new property taxes in the first five years of the contract. In the sixth year, they would pay 50% of their taxes, and that figure would increase by 5% each year, until they were 16 years old if they paid 100% of their taxes. The same pilot was admitted more than five years ago for the UNFI camp on Neelytown Road. In the past five years, UNFI has not paid any new property taxes to the City of Montgomery and the Valley Central School District (SDVC). Unlike the UNFI process, the public outcry over the Sailfish PILOT project with the newly elected city council has made a difference. Since the beginning of this year, we have made it clear that projects should not be offered to the City of IDA by a pilot agreement that does not include new property taxes in the first five years. Project Sailfish, which officially unveils its tenant as Amazon, had obtained approvals from the planning committee, the city council`s shingles amendment and approval of its 15-year PILOTE contract in 2019 before the new city council took office.
A second public hearing was called following a technical transfer of their 15-year pilot agreement already approved. At our reorganization meeting on January 2, 2020, the newly elected City Council took the opportunity to bring the Sailfish and Amazon project back to the negotiating table. We have asked Ida to end its final approval of the transfer of the piloted agreement, and last month we used that time to negotiate. This strategy helped taxpayers generate an additional $1.4 million in tax revenues in the first five years of the PILOTE agreement. Unlike UNFI, through a combination of public commentary, VCSD public relations and a city council that listened to the concerns of its residents, we were able to maximize the benefits to our community. I am proud of the work done by our City Council and IDA to ensure that this pilot agreement has benefited our taxpayers more than the PILOTE agreement for UNFI. It is important to understand that CCIDA issues non-recourse bonds and does not offer credit enhancements. CCIDA`s bonds are not debts of Cattaraugus County or New York State. As a result, IDA`s ability to sell the bonds rests exclusively on the solvency of the company. The bonds are paid from rents paid by the company under a lease agreement or by the forward payments paid by the company under a tempe sale contract between the company and IDA.
Payments are usually allocated by IDA to a corporate agent who ensures that funds are paid to the appropriate beneficiaries. IDA`s participation in a project may also allow the project to bring some tax reductions on real estate. CCIDA requires the recipient company, instead of a tax agreement (a PILOTE agreement), to make a payment reflecting a reduction in line with CCIDA`s uniform tax-exempt policy. These payments are transferred to the relevant tax sovereignty. We have attached a copy of the CCIDA PILOTE Directive (CCIDA`S PILOT Policy (PDF). This property tax reduction can be used either with a fee rental transaction or with a bond income transaction. The Agency`s application includes a general statement of principle on royalties and advertising obligations, a detention ban agreement and an environmental assessment form outlining the project`s impact on the environment.
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