FULTON COUNTY INDUSTRIAL DEVELOPMENT AGENCY
2018 ANNUAL REPORT
JANUARY 16, 2019
FULTON COUNTY INDUSTRIAL DEVELOPMENT AGENCY
I. GENERAL OPERATIONS:
The Fulton County Industrial Development Agency (IDA) was created in 1970 by an act of the New York State Legislature as a corporate governmental agency constituting a public benefit corporation. The purpose of an Industrial Development Agency (IDA) is:
“to promote, develop, encourage and assist in the acquiring, constructing, reconstructing, improving, maintaining, equipping and furnishing industrial, manufacturing, warehousing, commercial and research facilities and thereby advance the job opportunities, general prosperity and economic welfare of the people of the state of New York and to improve their standard of living.”
B. Mission Statement:
The IDA’s Mission Statement is as follows:
“The IDA’s mission is to create and promote economic growth and prosperity for both residents and entrepreneurs in Fulton County. The IDA’s role in Fulton County’s Economic Development Program is to develop and maintain an inventory of shovel-ready sites for new and expanding businesses, offer financial incentives, as may be required, to encourage the creation of new and retention of existing jobs and expand the County’s tax base. In doing so, the IDA strives to make Fulton County a desirable place to live and do business.”
C. Tax Exemptions:
The New York State Legislature authorizes IDAs to offer three (3) types of tax exemptions to stimulate private sector investment and create jobs:
1. Property Tax:
New York State Law designates IDA’s as tax exempt entities. When an IDA holds title to real property, New York State Law says all improvements on the property are exempt from real property taxes. However, the land that the improvements are located on remain taxable.
However, for projects the IDA is involved with, the IDA requires companies to enter into a Payment In Lieu Of Tax Agreement (PILOT). A PILOT is a contractual agreement between the IDA and a company that states that even though the project is tax exempt due to IDA ownership, the company shall make PILOT payments to local taxing jurisdictions in lieu of paying taxes. PILOT Agreements stipulate that companies make PILOT payments to local taxing jurisdictions that are based upon a percentage of the property tax that would otherwise be due on the property was not owned by the IDA. PILOTs are developed in accordance with the IDA’s Uniform Tax Exemption Policy. Once a PILOT is executed, the company makes the required annual PILOT payments to local taxing jurisdictions in accordance with the PILOT. It is the responsibility of the local taxing jurisdictions to issue annual invoices under a PILOT to the company and to ensure that payments are received in a timely manner.
2. Sales Tax:
IDA’s can offer companies an exemption from New York State and local sales taxes on eligible construction materials and equipment for a project. The exemption is generally limited to the construction, reconstruction or installation period and cannot cover ongoing operational costs. When the lease or installation sale agreement expires, the IDA transfers any personal property that is involved in the project to the company without the payment of any sales or use tax.
3. Mortgage Recording Tax:
If a project involves a mortgage, a company that receives IDA assistance is exempt from New York State’s mortgage recording tax which is currently 1% in Fulton County.
IDA’s can also provide various forms of bond financing for a project. Financial institutions, such as banks, insurance companies or private individuals purchase these bonds as an investment similar to an individual purchasing a U.S. Government Savings Bond. By purchasing a bond, a private investor lends its funds to a business. The business commits to repay the principal and interest, if the bonds are taxable, to the investor. The business and the financial institution, independent of the IDA, negotiate the terms, interest rate and other conditions of the transaction. The IDA acts as an intermediary for this private transaction. There are no IDA or public funds involved in an IDA bond transaction.
The IDA does not have a loan fund or pool of money to use to help finance projects. The financing referred to here is private funds coming from banks, financial institutions or private investors.
The IDA, Fulton County Government or Fulton County taxpayers do not lend any public money nor do they assume any responsibility for repaying bonds if a company defaults on any payment. There is also no financial liability on the IDA, Fulton County or taxpayers. Bond payments are solely the responsibility of the company borrowing the money.
E. Payment in Lieu of Tax Agreements (PILOTS):
The IDA provides Payment in Lieu of Tax Agreements in accordance with its Uniform Tax Exemption Policy. The IDA’s current policy states that it will provide PILOT’s modeled after Section 485-b of NYS’s Real Property Tax Law. Section 485-b states that a company can receive a 50% exemption on its assessed valuation in year 1. The exemption then decreases 5% a year for 10 years. After ten (10) years, the company would make a PILOT payment equivalent to 100% of the amount it would be paying in real property taxes if it owned the property. During that 10-year period, the company would be making “PILOT payments” to local taxing jurisdictions and not “property tax payments.” Once the Lease and PILOT Agreement the IDA has with a company expires, the property would then return to the tax rolls. At that time, the company would be making “property tax payments” to local taxing jurisdictions and no longer be making “PILOT payments.”
2. IDA Projects with PILOT’s:
The following IDA Projects have active PILOT’s as of December 31, 2018:
Address: 115 Corporate Drive
Lessee: CG Roxane
Address: 1 Old Sweet Road, Johnstown
Lessee: Johnstown Renewables
Address: Enterprise Drive, Johnstown
F. IDA Projects:
The following is a list of all active IDA projects as of December 31, 2018:
Lessee: CG Roxane
Address: 1 Old Sweet Road, Johnstown
Address: 213 Harrison Street, Gloversville, NY
Lessee: Johnstown Renewables
Address: Enterprise Drive, Johnstown
II. SUMMARY OF 2018 ACTIVITIES:
The IDA Board met eleven (11) times in 2018. The following is a summary of the key activities addressed by the IDA Board in 2018:
1. TRYON TECHNOLOGY PARK PROJECT:
The IDA Board, in partnership with the Fulton County Board of Supervisors, continued work on transforming the former Tryon Juvenile Detention Facility into shovel-ready sites for new businesses. The following is a summary of the activities that took place in 2018:
a. New Electric System:
When Tryon was run by the State of New York, the electrical service at Tryon was owned by New York State. New York State owned the electrical system to get the most cost effective electricity rates from National Grid. When the State transferred title of Tryon over to the IDA in 2014, the IDA took ownership of the existing electrical system. Since that time, the IDA has been working with National Grid to get National Grid to install a new underground electric service around the perimeter of County Road 117. Once National Grid installs this new service, the IDA could discontinue its existing electrical service and get out of that business. At that time, the new electric service would be owned, operated and maintained by National Grid.
In 2018, National Grid presented a revised design for a new electrical system for the Tryon Technology Park. The revised design would bring a new overhead line into Tryon from CR107 along an old secondary access road. Once this overhead line reached CR117, the line would then go underground. The new line would run along CR117 and service the existing wastewater pump station, water booster station, elevated tank, Vireo Health and Building 60.
Fulton County will be funding this project which is expected to start in 2019.
The IDA worked with the Fulton County Center for Regional Growth in submitting proposals to prospective companies looking for a site. Tryon was offered to several prospective companies in 2018.
c. Regional Business Training and Incubator Center:
The IDA had originally planned to repurpose all of Building 3 into the Regional Business Training and Incubator Center. The IDA, in conjunction with Fulton County, sought approval through the Northern Borders Regional Commission (NBRC) to repurpose the grant it received for the Regional Business Training and Incubator Center. The request asks the NBRC to redirect the monies to having just the F-wing of Building 3 repurposed into the Regional Business Training and Incubator Center. The intent would be to have a new heating, ventilation, air conditioning and plumbing systems installed just for that building. The NBRC approved this request. C.T. Male prepared design plans for this work. The project, however, was not advanced to putting out to bid pending the resolution of the new electric system for the Tryon Technology Park. Fulton County and the IDA wanted to see what its cost would be for providing a new electric system before committing dollars to renovating the F-wing of Building 3.
d. Follow-up to Site Selector’s Visit:
Some of the suggestions offered by the three (3) corporate Site Selectors that visited Fulton County in September of 2017 were to:
- Cut down trees so Site Selectors/Companies could see the land/sites.
- Cut down underbrush and high grass in several areas.
- Demolish more buildings.
In response to that input, in 2018, several initiatives were completed at Tryon:
- Fulton County’s Highway and Solid Waste Departments cut down many trees.
- Fulton County’s Soil and Water Conservation District pulled the stumps out of the ground from all trees cut.
- Fulton County’s Department of Solid Waste removed all the stumps pulled by the Soil and Water Conservation District.
- The IDA hired a contractor to cut down a lot of underbrush and high grass in several areas.
- The Board of Supervisors hired Dan’s Hauling and Demo, Wynantskill, NY to:
a) Demolish the three (3) large dormitories.
b) Demolish three (3) Activities buildings.
c) Demolish one (1) Medical building.
d) Demolish one (1) small dormitory.As a result of this work, the suggestions offered by the Corporate Site Selectors were completely addressed.
e. Vireo Health:
Vireo Health asked the IDA Board to approve a revised Site Plan for its facility at Tryon. The primary change was with respect to where their second greenhouse would be located. The IDA Board approved the revised Site Plan.
Vireo Health began work in 2018 on a second 20,000+/- SF greenhouse. This second greenhouse will be located adjacent to their existing greenhouse. It was discovered that an underground electric circuit that feeds the elevated water tank and Building 3 runs right under where this second greenhouse was to be constructed. This existing circuit is owned by the IDA. The IDA Board agreed to pay to have this circuit rerouted so it wouldn’t impact the construction of Vireo’s second greenhouse. This work was completed in October 2018.
f. County Road 107/158 Intersection:
The Site Plan for the Tryon Technology Park identified reconstructing this intersection into a “T” intersection. In 2018, Fulton County’s Department of Highways and Facilities began planning and design work for this project. The IDA Board went on record agreeing to provide Fulton County with whatever land it would need to complete the reconstruction of this intersection.
In 2018, the IDA Board approved the following items for Tryon:
- Hired James Esper to cut grass.
- Sold two (2) old sheds.
- Sold an old antenna.
- Lease lands to R & R Farms, Inc. to grow crops.
2. PIONEER WINDOW EXPANSION PROJECT:
In 2018, the IDA Board received a Project Application from Pioneer Windows Manufacturing Corporation to:
- Construct a 120,125+/- SF addition to its existing 160,500 SF manufacturing facility.
- Construct this addition on a 3.91 acre parcel adjacent to their existing facility.
The proposed project would create up to 75 new jobs and result in a total investment of over $11 million.The IDA Board initiated its review of this Project Application and held the required public hearing. It is anticipated that final approval of the Project Application will be granted in early 2019.
3. BENJAMIN MOORE EXPANSION PROJECT:
In 2018, the IDA Board received a Project Application from Benjamin Moore to:
- Construct a 120,000+/- SF addition to their existing paint manufacturing facility.
- Construct the addition on their existing property.
The IDA Board initiated its review of this Project Application and held the required public hearing. Unfortunately, Benjamin Moore advised the IDA that the project had been put on hold.
The proposed project would create approximately 45 new jobs and result in a total investment of $24+/- million.
4. CENTURY LINEN PROJECT:
In 2018, the IDA learned that Century Linen had scrapped its plans to relocate its business into a vacant building at 123 Union Avenue Extension in the City of Johnstown. Century Linen had been advised by National Grid that National Grid’s existing gas line could not supply the volume of gas at the pressures Century Linen needed. The cost to upgrade National Grid’s line was too expensive for Century Linen.
In 2018, Swany filed a formal request with the IDA to terminate its Lease Agreement for the facility it occupies in the Crossroads Industrial Park. The IDA approved this request. The closing on this transaction was held on December 18, 2018.
6. REGIONAL BUSINESS PARK PROJECT:
Work on the Regional Business Park Project continued in 2018. Under New York State’s Municipal Annexation Law, a SEQR review must be conducted on a petition for annexation before the affected municipalities can vote on whether to approve or disapprove the proposed annexation. In 2017, the SEQR review process continued on this proposed annexation. As Lead Agency, the Town of Mohawk issued a Positive Declaration requiring the preparation of a Draft Environmental Impact Statement (DEIS). The Town of Mohawk declared Fulton County as a Project Sponsor and required the County to pay for and prepare the DEIS. Fulton County agreed to do so in partnership with Montgomery County and the City of Johnstown. Sterling Environmental was hired to prepare the DEIS. The DEIS was completed in November, 2018 and sent to the Town of Mohawk to review for completeness.
7. JOHNSTOWN RENEWABLES PROJECT:
Construction of the Johnstown Renewables Project was halted in 2017 when the Project’s primary investor passed away. The IDA has aggressively monitored the project and has had numerous communications with the company, the estate of the primary investor and others. The IDA is hopeful that the original project is completed or a new project is brought to the site.
8. FULTON COUNTY’S ECONOMIC DEVELOPMENT STRATEGY:
In 2016, Fulton County hired River Street Planning & Development to prepare an Economic Development Strategy. This Strategy would serve as Fulton County’s blueprint for economic development in the foreseeable future. The final Development Strategy was completed in the summer of 2018.
In the fall of 2018, the IDA Board reviewed the key recommendations identified in the final Economic Development Strategy (see attached). One component of the Economic Development Strategy was a Housing Strategy. The Housing Strategy used standard industry models to document the current and future demand for housing in Fulton County and specific locations within the County. This report will be key in attracting potential developers to invest into Fulton County because it documents a current and future need/demand for new housing.
Three (3) Primary Development Areas were identified where new housing could be developed. One of these Primary Development Areas is the Tryon Development Area. This Development Area contains approximately 100+/- acres and is located at the northern end of the Tryon property owned by the IDA. The IDA Board reviewed the following recommendations in the Housing Strategy for the Tryon Development Area:
- Fulton County should prepare a one-page “sell sheet” that focuses specifically on the market demand for executive-level housing. The sheet should include information on growth in households with incomes over $100,000 and the lack of executive level housing in the County.
- Fulton County should market the residential plan in conjunction with the Technology Park as “Tryon Technology Park and Village.” The vision for an upscale residential village adjacent to the Technology Park can help support tenant recruitment efforts for the Park. This, in turn, will help induce demand for housing in the village as new businesses move into the Park. The County should enhance the Tryon website to help promote and market the vision for Tryon as a business park and residential community. Erie Station Village and Erie Station Business Park in Henrietta, New York is a good example of this approach.
- Fulton County should focus on neighborhood-serving retail like a coffee house, bar or restaurant. Potential uses should be carefully designed to be contemporary and fresh to complement the housing in that development area that should be targeted to professionals and executives. In the near term, it is more feasible to recruit a small café or similar business to locate on the Tryon Campus. As housing is built, new retail development may become feasible in the “village” area.
- Fulton County should consider partnering with a developer on a “Phase I” project. The type of housing envisioned in Tryon Village represents a largely unproven market, which may deter developers. The County should be prepared to engage in a partnership to entice a developer, such as putting in a small portion of the new road. The purpose of this will be to demonstrate a market for the types of homes included in the vision, which will attract additional private investment. Alternatively, it may demonstrate a need to shift the vision for Tryon Village, such as towards more workforce-level housing.
In 2018, the IDA Board also took the following additional actions:
- The Fulton County Sheriff’s Department and NYS Police conducted training exercises at Tryon.
- The IDA renewed its Gold Membership with the Fulton County Center for Regional Growth.
- The IDA adopted new Investment and Sexual Harassment Policies.
- The IDA Board adopted a 2019 Budget.
- Two (2) IDA Board members, William Sullivan and Diana Putman, resigned. Two (2) new members, George Doherty and Jane Kelley, were appointed by the Board of Supervisors to the IDA Board.
The IDA Board appreciates the strong partnership it has with the Fulton County Board of Supervisors on the Tryon Technology Park and looks forward continuing and strengthening that partnership.