Owner of Griffiss hangar complex seeks changes in PILOT agreement

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The owner of a large hangar complex at Griffiss International Airport wants to substantially reduce its payments made to the county in lieu of property taxes, starting this year.

The current schedule calls for $462,468 in each of the next three years. However, 394 Hangar Road Corp. now wants to pay the county $200,000 this year, $150,000 in 2016 and $100,000 in 2017.

The three-year reduction totals $934,404 — more than double what would be paid under the proposal.

The amended three-year payment-in-lieu-of taxes agreement (PILOT) is being sought by 394 Hangar Road from the Oneida County Industrial Development Agency. ​The lower payments reflect anticipated higher maintenance expenses and decreased rental revenue, according to 394 Hangar Road officials.

The building is leased to Premier Aviation Overhaul Center, a Canadian-based aircraft maintenance, repair and overhaul company.

The revised tax abatement plan allows the landlord to break even, according to comments made at the Oct. 16 IDA meeting.

IDA board members agreed to consider the reduced PILOT plan. A decision won’t be made until after an as-yet-unscheduled public hearing is held. This year’s payment is due Dec. 31.

All of the PILOT money goes to Oneida County, which uses it to offset the cost of operating the county airfield.

The IDA can change the tax abatement schedule without the county’s approval.

The complex, known as Building 101, comprises three hangars, a backshop area and offices.

Unlike the rest of the airport facilities, the county does not control this space — ownership rests with 394 Hangar Road. The affiliate of Mohawk Valley EDGE was created in 2002 to take advantage of incentives offered through a state economic development program.

At the time, EDGE and the county were in the midst of landing Premier’s predecessor at Griffiss thanks to the state assistance that was available to eligible non-government entities like 394 Hangar Road. The program has since been discontinued. To date, ​the county has received more than $8 million in PILOT payments from the corporation.

No matter what the IDA decides, PILOT payments from 394 Hangar Road will end after 2017. The county has the option of assuming ownership of the complex in 2018, a status that would make it exempt from taxes. And even if ownership remains with 394 Hangar Road, zero payments are required in 2018 and after.

Any reduction in PILOT payments would crimp airport revenues that are already under pressure. Griffiss International is short about $850,000 in hangar rental income and utility payments because aircraft refurbisher Midair USA ceased operations earlier this year at about the time it filed for bankruptcy protection. Furthermore, the airport expects to realize less rental income from these hangars next year than when Midair occupied them and paid its rent.

Additionally, the county is selling the former county airport in Whitestown to the state for $10 million later this year. The state has been leasing the older airfield with the annual rent being counted as revenue in the Griffiss budget since the airport moved from Whitestown to Griffiss in 2007. New York is paying $743,342 this year for the Whitestown location, which is home to the state Emergency Preparedness Center. That revenue stream ends when the sale is completed.

On the other hand, the airport’s 2016 budget projects new income of $1 million in connection with Griffiss being a test site for commercial drones.

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