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Register Star, April 17, 2008
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View: Widewaters not seeking tax breaks
By John J. Faso
Manatt, Phelps & Phillips, LLP, Albany
Recent news articles and letters to the editor have discussed the application of Widewaters development to the Columbia County Industrial Development Agency (IDA) for certain assistance in conjunction with its Greenport Commons project on Fairview Avenue. As attorney for the applicant I wish to clarify a number of points raised by some.
Widewaters received approval from the town of Greenport for its project, featuring a Wal-Mart SuperCenter, and additional retail and commercial tenants in 2007. At that time, the developer advised the town that he had no intention of seeking assistance with the project. However, since that time, the state and national economy has deteriorated, making it necessary for Widewaters to seek to include tax incentives which will make the project more marketable to national retailing firms looking to occupy the center.
This assistance is hardly unusual. The developer seeks to reduce construction costs by receiving exemption from sales tax on construction materials used in the project and on mortgage recording taxes which would be paid on any mortgage recorded as part of financing construction.
In addition, the developer has sought a structured property tax, or PILOT, arrangement which would gradually subject the improved property to full taxes over a 10-year period. This proposal is identical to tax benefits afforded any new commercial construction project as of right under a long-standing state law.
In other words, Widewaters is not seeking taxes which are any lower than those to which it is otherwise entitled under law. It only seeks the assurance of structured taxes now in order to better convince potential tenants to locate here.
Now some argue that these benefits are somehow being financed by other taxpayers: Not true. The vacant land pays next to nothing in real estate taxes now; even with incentives, the development will pay far more to local governments and the Hudson City School District than those bodies now receive. Similarly, the exemption on sales tax for construction materials and mortgage taxes only occurs if the development occurs.
Empty land, having no construction activity, doesn't pay sales or mortgage recording taxes either. Nothing comes from taxpayer pockets.
Most important, this project represents a $70 million investment in Columbia County, larger than any other in recent memory. The sales tax projections from the project, more than $5 million, would result in a more than 50 percent increase in total sales taxes collected over current receipts. In addition, the project will result in over 954 new full-time equivalent jobs.
Lastly, the Greenport Commons project is unlike any other in the county. It will make it possible for our residents to shop for items which they now need to buy in Albany or elsewhere. It will keep our tax revenue here, to benefit our taxpayers, localities and the Hudson City School District.
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