By DAN GUZEWICH Staff writer
A tax-free agreement covering nearly 800 acres in Griffiss business park has been passed despite the objections of the Rome School District.
The county Industrial Development Agency unanimously approved the 10-year zero tax deal on vacant land with Griffiss Local Development Corp. June 29. It is an updated version of one that is about to expire.
The controversy raises the issue of awarding tax breaks to projects deemed necessary to retain or create jobs compared with taxpayer fairness and equality. The parcels covered by the agreement have an assessed valuation of about $91 million. GLDC asserts that the tax-exempt status is critical to its ongoing role as developer of the former Air Force base. It says the abatement is worthwhile when weighed against the potential to bring in jobs and income tax revenue.
GLDC notes that the new agreement imposes no financial hardship on the school district because the parcels were 100 percent tax exempt when owned first by the Air Force and the 10 plus years since then by the IDA.
The school district responds that no connection has been established between the need to exempt the land from property taxes and the prospects for redevelopment. It says it can and has in the past supported tax relief for specific projects, but does not believe it is appropriate to continue exempting property indefinitely for the purpose of some hoped-for future development.
No plans are pending involving any of the parcels in the deal.
Rome Superintendent Jeffrey Simons says a 100 percent tax exemption for $90 million of real estate located within the district has a significant impact on current and future district revenues needed to maintain student programs and to ensure more equitable distribution of the tax burden.
The district also contends that GLDC, like any other non-for profit agency, should seek property tax exemption by submitting an application for a charitable purpose exemption to the city assessor’s office not through this type of an arrangement with the IDA.
The two other taxing jurisdictions involved, the city and county, did not object to the new agreement, said Mary Rizzo-Bonney, GLDC spokeswoman.
While GLDC maintains the combined assessment figure is too high, the school district says that it is a matter to be addressed through established tax grievance processes for property owners, and not the IDA. Any existing buildings on the parcels are considered unusable in the eyes of GLDC and are slated for demolition, based on the availability of funds. Nor is all of the land developable. There are roads, a creek, water distribution system and a former landfill.
Included in the tax-exempt acreage is Skyline Summit, which was a housing tract when Griffiss was still an Air Force base. Located off of Griffiss Parkway, or Route 825, across from the Wingate Hotel, it has 92 acres of developable land. Roads and sewer infrastructure to serve the tract were previously constructed as part of the bid to attract development. It is zoned suitable for light manufacturing.
GLDC sees a balancing act between what’s being given away in the short term versus what might be generated long term.
It says the business park is currently producing more than $4 million a year in tax revenues or payments-in-lieu-of-taxes for the city, school district and county. GLDC says future development of parcels covered by new tax agreement would add to this amount. If a parcel covered by the agreement is developed, it would be excluded from the non-tax agreement and become subject to property taxes or a PILOT.
This is not the first time that the school district and the IDA have been at odds over tax-free agreements.
Earlier this year the school district filed a legal challenge against the IDA and Griffiss Utility Services Corp. over a new 25-year tax-free agreement.
Initially, a state Supreme Court justice granted IDA and GUSC motions to dismiss the case, based on a "lack of standing" for the Article 78 proceeding. The district has since filed an appeal.
The legal action opposed IDA approval of a 25-year tax-free agreement for GUSC following a prior 10-year tax-free break. The district estimated it would lose about $11 million over 25 years in payments-in-lieu-of taxes, based on an upcoming $18 million GUSC expansion that would increase its assessed value.
The utility provides energy for employer sites in Griffiss park, and the IDA says the new tax-free agreement will help stabilize costs for park tenants.