Price Chopper is planning to build a large supermarket off state Rte. 9 in the town of Lake George near the Warrensburg town line, and local officials have expressed fears that the Mini-Chopper store in Lake George Village, shown above, may be closed as a result — causing an inconvenience to local citizens. Monday, the Lake George Town Board and Warrensburg School board were grappling with requests from the project developers for a hefty tax break that would save them hundreds of thosuands of dollars, while burdening the school district and town a loss of tax revenue — at a time both entities are financially stressed.
Local municipal and school officials are considering a hefty long-term tax break for a Price Chopper supermarket shopette development, and the initiative is meeting with some opposition.
The development, now in the planning stages, is to be located off Prosser Road in the town of Lake George but within the Warrensburg School District.
Price Chopper and its developers are seeking a 15-year payment in lieu of taxes that will save the project developers hundreds of thousands of dollars — while the Warrensburg school system and Lake George town government experience a loss of potential revenue.
The requested PILOT deal would also provide exemptions from sales taxes and mortgage taxes. One major stipulation sought by Price Chopper is a sales tax exemption provision amounting to about $270,000.
The deal would be enacted through the Warren-Washington Counties Industrial Development Agency, with the IDA serving as owner of record for the property during the term of the contract.
The deal would be the deepest most generous tax break granted by the area IDA to a developer in recent history.
The school and town officials didn’t hear about the proposed deal until they reviewed it at meetings held simultaneously Monday night March 11, although the project has been in the planning stage for about 18 months.
The tax break requested by developers calls for exemptions on the value of any improvements made to the property — 100 percent property tax exemption for the first five years, a 50 percent exemption for years 6 through 10, and a 25 percent exemption for the final five years.
The IDA normally grants 10-year Basic PILOT exemptions which feature a 50 percent exemption on improvements during the first five years and a 25 percent exemption in the final five years.
The Lake George Town Board discussed the concept at their monthly meeting Monday. After the session, each member said they thought the exemption as requested was too long and too deep. Board member Dan Hurley said he thought such exemptions should be limited to industrial projects that create jobs, and not for retail developments.
While the developers’ representatives have cited that the plaza development would create jobs, other town and school officials note that it is likely to merely shift jobs from one source to another, as other enterprises lose customer traffic that is attracted to the new plaza.
School Board member Linda Baker Marcella expressed concern that the project would siphon off business from existing businesses, enterprises that had supported the town and school for years.
Attorney Michael O'Connor, representing the developers, told the school board the deal represented a benefit to the school and town because they were not requesting a reduction of the assessed value of the six combined parcels — formerly homes and yards — from $822,000 to what it should be assessed at $725,000 since buildings were removed from three of the plots.
But Lake George Supervisor Dennis Dickinson said Monday that the combined parcel was most likely worth far more than the sum of its individual parts.
Marcella pointed out that the “benefit” O’Connor spoke of only amounted to $1,639 annually. Resident Anna Busser Erik told the school board she was concerned for the established businesses which would lose business to the new plaza.
School Superintendent Tim Lawson warned that the recent reduction in state aid was squeezing the school’s finances, putting a burden on local taxpayers, as well as prompting the school district to cut programs and positions. He said he advocated a delay, at the least, in the deeper exemption level. Also, Marcella — for years a real estate broker — said she had yet to see a development deliver half the jobs promised to host communities.
Other area officials said that the development would be adding a costly burden to municipal services during the period that the developers were enjoying a tax break.
Marcella said that with state aid trending down and expenses continuing to rise, the school district could find itself insolvent — like other school districts in the state — in as little as 18 months.
Despite the concerns aired, the school board voted to support a 75 percent tax exemption in the first five years, 50 percent in the second five-year period and 25 percent exemption in the final five years.
The school district’s vote, however, carries no legal weight. The Lake George town board is empowered to decide on the amount, if any, of an exemption beyond a Basic PILOT exemption. State law also calls for the town board, in making its decision, to take into consideration the needs of the school district.
While granting a tax break exceeding the norm, the school board did add a stipulation to their vote that the developer agree to not challenging the property’s assessment during the final five years of the PILOT arrangement.