FULTON COUNTY INDUSTRIAL DEVELOPMENT AGENCY
2019 ANNUAL REPORT
MARCH 3, 2020
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, 2019:
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, 2019:
Lessee: CG Roxane
Address: 1 Old Sweet Road, Johnstown
Address: 213 Harrison Street, Gloversville, NY
Lessee: Johnstown Renewables
Address: Enterprise Drive, Johnstown
Lessee: Century Linen
Address: 125 Balzano Drive, Gloversville, NY
II. SUMMARY OF 2019 ACTIVITIES:
The IDA Board met twelve (12) times in 2019. The following is a summary of the key activities addressed by the IDA Board in 2019:
1. TRYON TECHNOLOGY PARK PROJECT:
a. Vireo Health:
The IDA Board approved a revised Site Plan for Vireo Health’s facility at Tryon. The primary change was to increase the total sf of new buildings Vireo desires to build on its site. Vireo originally planned on building 202,000+/- sf of new building space. It’s now planning on building over 267,000 sf.
b. 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 2019, National Grid revised the design for a new electrical system. The revised design would bring a new overhead line into Tryon from CR107 along an old secondary access road to CR117. 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 paid National Grid the funds National Grid required in order for National Grid to proceed. National Grid decided to start work on the project in the spring of 2020.
c. Lands on South Side of CR107:
The IDA Board owns 26+/- acres on the south side of CR107 across from the entrance to the Tryon Technology Park. In 2019, the IDA Board decided to pursue listing this property for sale. It had an appraisal conducted on the property. The IDA Board met with and interviewed two (2) real estate firms. The IDA Board hired Coldwell Banker Arlene M. Sitterly to list this property with. The property was listed in late 2019 and several offers were received by the Board late in 2019.
d. 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. In 2019, IDA Board agreed to provide Fulton County with approximately 2.0+/- acres of land to complete the reconstruction of this intersection. This project was completed by the County in 2019.
e. 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 never put out to bid due to the cost of the new electric system for the Tryon Technology Park. In 2019, the NBRC withdrew its grant for this project. The IDA reimbursed Fulton County $18,444.25, which was the IDA’s share in the overall cost of hiring C.T. Male.
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 2019.
In 2019, the IDA Board approved the following items for Tryon:
- Hired Evergreen Landscaping to cut grass.
- Leased lands to R & R Farms, Inc. to grow crops.
2. 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 was 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 2019, the IDA approved an Application from Century Linen to proceed with a project to renovate an existing building at 125 Balzano Drive in Gloversville’s Crossroads Industrial Park for its laundering business. The IDA approved a request for sales tax exemptions for this project. Century Linen completed the renovations in 2019 and conducted an open house in November. The project resulted in the retention of jobs and the creation of 32 new jobs with a total private investment of over $6 million.
3. REGIONAL BUSINESS PARK PROJECT:
Work on the Regional Business Park Project continued in 2019. 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. The Town did not accept the DEIS as complete and submitted 13 pages of written comments back to Fulton County.
4. JOHNSTOWN RENEWABLES PROJECT:
In 2016, Johnstown Renewables (JR) filed a Project Application with the IDA for a project in the Johnstown Industrial Park. The project involved building an 11,900+/- sf building on a 5.2 acre parcel of land in which ethyl alcohol would be produced from liquid whey from the adjacent FAGE yogurt manufacturing plant. The project was projected to involve the investment of $16+/- million and the creation of 27 jobs. The IDA Board executed a 10-year Lease Agreement with JR in 2017.
Construction work on the project began in 2017. In early 2018, the IDA received a letter from CRE, LLC advising of the passing of Christian Eisenbeiss. Mr. Eisenbeiss was the sole member of CRE, LLC and the managing member of JR. In 2018, the IDA had several contacts with JR and their attorneys. In 2019, JR requested that the project completion date identified in their Lease Agreement with the IDA be extended through December 31, 2019. JR advised that they were seeking to enter into a new joint venture or find another user for their facility. JR advised that several entities had toured the facility and expressed an interest in it. The IDA Board authorized its Chairman to execute an Amendment to JR’s lease to extend the project completion date through December 31, 2019.
In October 2019, the IDA was advised by JR that they were going to be auctioning off equipment and machinery that was stored onsite. At that time, the IDA Board authorized starting the process to recapture the sale tax benefits JR realized during the project because JR had not created the 27+/- new jobs it said it would create. The IDA Board also authorized its Chairman to execute an Escrow Agreement with JR whereby all proceeds from that auction would be held by an Escrow Agent to eventually be used to repay the sales tax benefits JR obtained as part of this project. The IDA Board will continue its due diligence to ensure that JR repays New York State the estimated $960,000 of sales tax benefits it received for this project.
5. FULTON COUNTY’S ECONOMIC DEVELOPMENT STRATEGY:
Fulton County’s Development Strategy recommended the creation of 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 35+/- acres and is located at the northern end of the Tryon property owned by the IDA. With respect to the Tryon Development Area, the Development Strategy recommended that:
- 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 2019, the IDA Board:
- Hired Environmental Design Partnership to prepare a Desktop Environmental Assessment of the Tryon Development Area. This Assessment identified potential impediments to building out the Tryon Development Area. This Assessment will help in the marketing of the site to potential developers.
- Hired Elan Planning and Design to prepare a sell sheet to help market the Tryon Development Area.
6. IDA WEBSITE:
In 2019, the Authority Budget Office (ABO) issued new policy guidance regarding IDA websites. The IDA management reviewed the IDA’s website contents and identified a series of deficiencies in comparison to these new policy guidelines. The IDA Board hired Emery Designs to make the necessary changes to the IDA website to bring it into compliance with the ABO’s new policy guidance. This work was completed in 2019.
The IDA Board also hired Emery Designs later in the year to undertake a significant updating and revision to the IDA’s website. This work began in late 2019 and will be completed in 2020.
The Audit of the 2018 IDA’s Financial Statements contained a recommendation that the IDA Board prepare monthly reconciliations of its bank accounts. In response to that recommendation, the IDA Board commenced a process in 2019 to have an IDA Board member conduct a monthly review of all IDA bank statements and to sign off on a reconciliation form.
8. BOARD TRAINING:
One of the comments made on the 2018 IDA Questionnaire was a desire to have more Board training conducted. Commencing in early 2019, the Executive Director began incorporating Board Training into monthly IDA Agendas. This training was conducted on numerous occasions during 2019 and will continue in the years ahead.
9. PALATINE DAIRY:
The IDA Board received a Project Application from Palatine Dairy to renovate the former Spray 9 building on North Comrie Avenue in the City of Johnstown into a facility that will be used for the manufacturing of dairy products, retail store and restaurant. Palatine Dairy subsequently withdrew its application and the IDA Board took no further action. The project, however, has moved forward.
10. EMINENT DOMAIN:
In 2019, the Fulton County Board of Supervisors asked the IDA Board to commence an Eminent Domain action to acquire lands owned by the late Robert Bowe on Hales Mills Road Extension in the Town of Johnstown. This action was taken after Mr. Bowe listed his property for sale and Fulton County tried to negotiate the purchase of the property from Mr. Bowe. The Board of Supervisors desired to gain control of key lands comprising the Hales Mills Development Area identified in the County’s Development Strategy. The IDA Board agreed to proceed with the Board of Supervisors’ request. The IDA Board, in June, conducted a public hearing as required by Eminent Domain Procedure Law (EDPL). Numerous people attended the public hearing to express their opposition to acquiring Mr. Bowe’s land by Eminent Domain. Shortly after that public hearing, the Fulton County Board of Supervisors passed a Resolution directing the IDA to stop all work on the Eminent Domain action. The IDA Board subsequently agreed to stop the Eminent Domain action.
11. VIDEO STREAMING:
In 2019, the IDA Board learned that the State Legislature will, commencing in 2020, be mandating that all IDA’s live video stream IDA meetings and public hearings. The IDA Board discussed what it may take to comply with this new State mandate. The IDA Board will be looking to purchase the necessary equipment and spend the necessary funds in 2020 to comply with this new State mandate.
12. REQUEST FROM NYS SENATE’S INVESTIGATION AND GOVERNMENT OPERATIONS COMMITTEE:
In 2019, the IDA received an extensive request for information from the New York State Senate’s Investigation and Government Operations Committee. IDA management spent significant time and resources to pull together answers to the myriad of questions asked by the Committee. The IDA Board reviewed the responses prepared by IDA staff and authorized filing them with the Committee. No response was ever received back from the Committee regarding the information submitted by the IDA.
In 2019, the IDA Board also took the following additional actions:
- The IDA renewed its Gold Membership with the Fulton County Center for Regional Growth.
- The IDA adopted a revised Uniform Tax Exemption Policy.
- The IDA Board adopted a 2020 Budget.
- IDA Board member George Doherty resigned.
- The IDA Board authorized investing funds into a Certificate of Deposit (CD).
- The IDA Board rented space at Tryon to Don Brown’s Bus to store buses.
The IDA Board appreciates the strong partnership it has with the Fulton County Board of Supervisors and looks forward to continuing that partnership.