A proposal to adjust downward a payment-in-lieu-of-taxes for facilities used by an aircraft maintenance facility at Griffiss International Airport gets a public airing Friday morning.
Pending before the Oneida County Industrial Development Agency is a request to revise and extend the agreement, known as a PILOT, that runs out after 2017. Owner 394 Hangar Road Corp. wants to pay nearly $300,000 less to the county annually starting later this year. It proposes to pay the county the equivalent of 100 percent of the property taxes based on a reduced assessment of $7.9 million. The yearly payment would be $462,468 from 2014 to 2017, according to IDA documents. The current annual payment is about $750,000.
There would be no PILOT payment starting in 2018 — the same year that ownership of the complex is scheduled to be turned over to the county from 394 Hangar Road and, it is assumed, go off the tax rolls. Should the complex continue to be taxable after 2017, the no-payment provision in the proposed PILOT would remain in force, coinciding with the tenant’s lease. Including renewals, the lease could potentially run through 2053.
The possibility of the PILOT remaining in effect until 2053, however unlikely, sparked discussion — with no resolution — among IDA board members at their September meeting. Some maintained it was premature to put in place such a long-lasting PILOT. Friday’s IDA hearing starts at 8 a.m. at 584 Phoenix Drive in Griffiss business park.
The facilities are leased to Premier Aviation Overhaul Center. Its three hangars, back shop area and offices in what’s known as Building 101, plus ramp area, are the only portion of the airfield not owned by the county. The lease with Premier would remain in effect after ownership shifts to the county.
The current assessment is nearly $13 million. The lower assessment is based on a 2010 appraisal. The school district and city agreed when the PILOT was first crafted in 2003 that the entire payment would go to the county to help pay for airport operations.
The PILOT changes are being sought as annual refunds received by 394 Hangar Road through the state’s Empire Zone program are starting to decrease and will be zero after four years. For the first 10 years, the Empire Zone benefits served to reimburse 394 Hangar Road 100 percent for the PILOT payment, but now the refunds are shrinking and end in 2017. The building owner says it is caught in a financial squeeze — it is receiving smaller Empire Zone refunds but it is paying out the higher PILOT amount while still incurring operating expenses, paying down debt and making capital investments in the facility.
“Without a modification to the existing PILOT agreement, the building will not generate a positive cash-flow,” says a summary of the proposal.
County Executive Anthony J. Picente Jr. is in favor of the revised PILOT.
The original PILOT and participation in the Empire Zone program were parts of the package that landed Premier’s predecessor, Empire Aero Center, at Griffiss in 2003. Premier, which has about 150 employees, replaced Empire Aero in 2010 at the former Air Force base.
“Applicant submits that the agency’s (IDA’s) grant of the relief sought is necessary to ensure the operation of the Building 101 facility which, in turn, is critical to the viability and overall success of Griffiss International Airport,” states the application. “Applicant further submits that Griffiss International Airport, as a public airport, is a key component of the Mohawk Valley region’s infrastructure.”
394 Hangar Road is a subsidiary of Mohawk Valley EDGE, which provides staffing for the IDA.