What is a payment in lieu of taxes?

Jay Matteson

A Payment in Lieu of Taxes or “PILOT” is an economic development tool that may mean the difference between a business locating in your community or locating somewhere else in New York State or the United States. The use of a PILOT brings about a gain in the tax base and usually more jobs. A PILOT helps grow the local economy by helping an existing business grow or a new business to start up in a community. 

    The PILOT works by allowing for a “managed” increase in taxes for the business. Let’s use an example to make this clear. A new business comes into the community and buys an acre of land. Prior to the business opening its doors, the acre of land brings $1,000 of tax revenue to the community. After the business opens its doors, let us say the full taxes on the higher-valued property is $20,000. To help the business get started and better manage its initial startup expenses, a payment in lieu of taxes (PILOT) agreement is negotiated. The PILOT may last for 15 years, under which the business would pay 25% of the higher tax assessment for the first 5 years (an additional $5,000/yr.), 50% ($10,000/yr.) for the next 5 years, 75% ($15,000) for the last five years, and then ramp up to the full tax of $20,000 in year 16. This is all new money for the community. The business started out on year one paying more in taxes than was collected before the business opened it doors. More tax revenue for the community. By year 16 the company was paying full taxation on the property. If the PILOT had not been employed, the business may not have started or may have decided to locate elsewhere which equals no increase in the tax base or local jobs. 

    This was a simple example of how a PILOT may be set up. The PILOT helps the company manage its tax increases over a negotiated number of years. The following is a real example of a PILOT negotiated with Great Lakes Cheese Company in Adams in 2007 when they began considering building a new cheese plant. Great Lakes was considering moving the plant to western New York and was receiving pressure to do so. Jefferson County Economic Development stepped in and helped the company by negotiating a 20-year PILOT because of the size of the project and the number of jobs created. As you review the graph, you’ll see the taxes paid by Great Lakes Cheese went up $35,000 the first year of their project and then over 20 years the taxes have gone up in a manageable manner. Great Lakes Cheese built their $86 million dollar plant next to their old plant in Adams. This created jobs, brought new revenue into the community and supported the dairy industry in Northern New York. 

    The Jefferson County Economic Development is responsible for managing the tax incentive tools such as a PILOT. Jefferson County Economic Development staff will work with affected municipalities, such as Jefferson County, a local school district and other municipalities to negotiate the PILOT with the project developer. The goal of Jefferson County Economic Development is to create a win – win situation for everyone involved. The community wins by supporting the expansion of the existing business and adding jobs or through bringing in a new business creating new jobs, new opportunity and a stronger tax base. 

    PILOTS may be employed to assist with traditional business start-ups such as manufacturing and service industries., as well as to attract renewable energy projects – all of which can bring thousands of dollars to local communities. In Jefferson County PILOTS are not available to small retail business, retailers, or food establishments. PILOTs are a good tool to use to grow our local communities. 

Leadership Honored at 9th Annual 20 Under 40 Awards

The 2019 20 Under 40 Award Recipients pose for a portrait at the luncheon on Friday in Watertown. Julia Hopkins/NNYBusiness

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Property Mixed For First Six Months of 2019

Lance Evans

The first six months of 2019 have seen mixed results in terms of real estate sales in Jefferson, Lewis, and St. Lawrence counties. Overall, 2019 single family home sales are up slightly in the tri-county area, while days on the market (the time from when the listing contract is signed until the purchase offer is signed) declined when compared to January to June 2018. Depending on the location the median price for a home either stayed relatively flat or rose. It should be noted that the “median price” is the middle point for real estate prices. It is not the same as the average price. The median price is the price in the very middle of a data set, with exactly half of the houses priced for less and half priced for more. 

    Sales of other types of property (commercial, land, and multi-family) in the tri-county area declined year over year. Again depending on the county, the price and the days on the market varied. 

    Looking at Jefferson County, sales of all property and single-family homes rose slightly with an increase of 1 to 2 percent over the previous year with 582 properties selling of which 489 were single-family. The change in year to year days on the market was flat with the number for all property up a day to 127 and down a day for single-family home sales to 107. The biggest change was median price which rose 5.4 percent to $128,000 for all property types and 8 percent to $140,500 for single family units. 

    Lewis County was a different story with declines seen in the units sold and a rise in the days on the market for all property and for single-family homes. Property sales for all types dropped 26 units to 105 and days on the market increased to 214, up over a month from 2018. The price stayed about the same, declining 1 percent to a median of $90,000. The number for single-family homes were similar with a drop of 23 units year over year, a decline of about 1 percent in median price to $110,000. There was a seven day increase to time on the market to 146 days. 

    The market was mixed in St. Lawrence County. The overall number of units sold declined by over 3 percent to 334, while the median sale price also went down by about 6 percent to $80,000. A bright spot in property sales was the thirty-four day drop in time on the market to 194 days. By contrast, single family home sales increased by 9 percent to 313 units. Similar to all property sales, the price declined, however it was only a 2 percent decline to $90,000. Days on the market also fell by over a month to 184 days. 

    These figures are in line with New York State data which is similarly mixed. Statewide, the median price of single family homes increased 5.8 percent over the period in 2018. Days on the market dropped 3.7 percent and the number of units sold decreased 5.2 percent. 

    The National Association of Realtors (NAR) notes that, through May, sales for the year are down about 1.1 percent while the median price increased 4.8 percent and days on the market were flat. Narrowing it to the Northeast (Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont), NAR said that this region experienced the biggest increase in sales. 

    What does this mean to buyers and sellers in our area? Overall, the tri-county market is healthy through the first six months. If the trend continues, housing sales will be equal to last year with modest increases in price and sales happening a little faster. With interest rates still relatively low, it may be a great time to buy. 

    One word of caution, in certain areas within the tri-county region, sales, median price, and/or days on the market may vary greatly from the above figures. Similarly, certain types of property or price ranges may also experience stronger or weaker sales. Your best source of information is a Realtor. He or she can give you a much more focused report that will fit your needs and desires. 

What Will Happen To Our Cows?

Jay Matteson

Being good environmental stewards is in everyone’s best interest. Clean water, clean air, clean soils are critical to life. Every industry and person should conserve our natural resources and reduce our impact on the environment, especially our climate. Let’s be clear, our climate is constantly changing. As most are aware, there is a huge debate about how much is caused by humans, to what degree natural systems cause the changes, and even to what degree our sun impacts climatic cycles. In the end, the hysterical arguments and claims damage the ability of people and industries to work together, calmly, to clean up our environment and make the world a cleaner place to live for our grandchildren. It seems sweeping bold claims and major pieces of legislation are the way, instead of common, sensical, reasonable steps forward that allow for people to adopt, adapt and embrace. 

    In the New York State Legislature there is legislation, the Climate and Community Protection Act (CCPA), that is intended to make New York State the leading state in adopting climate change legislation. The CCPA requires a 50 percent reduction in greenhouse gas emissions by 2030. By 2050, the CCPA sets a standard of zero greenhouse gas emissions within New York state. Let me say that again, within thirty years, greenhouse gas emissions will be eliminated within New York state, according to the legislation. All sectors of our economy, including agriculture, are targeted. 

    In thinking about this initiative, I immediately am concerned for our dairy processing companies. Natural gas is important to our food processing industry. How will these companies operate their plants, which employ about 300 people in Jefferson County alone, if they cannot use natural gas? Thirty years is not much time to identify new technologies that can replace natural gas in food processing. How will these companies afford transforming to new technologies? We use trucks, trains and planes to transport our raw products and value-added goods across the nation. Will we tell companies you can’t license fossil fuel powered transportation in the state but if transportation comes in from outside New York state, we allow it? Will the cost of production be driven so high in New York that these companies will shutter their plants here, possibly moving to other states? If New York causes companies to move their operations to other states where the regulatory impact is less, have we created a false utopia? Whereas, supporting research and development, and rewarding good voluntary environmental stewardship efforts, might keep business in New York state. 

    What about our cows? Many of us have heard or read about efforts to regulate cow flatulence. Will our livestock be targeted in the CCPA? Will livestock be allowed in New York state? Cows do emit greenhouse gases. I’m not aware of any filters that can be placed to control dairy air. 

    Of equal concern in considering this important issue is how will sweeping new regulations impact our average citizen’s finances. I read some reports from environmental advocacy groups about how jobs will be created because of the CCPA. Certainly, some will. The real question is how many more jobs, that the average citizen needs, will be lost because companies cant keep up with regulations and mandates? If people cannot afford to feed their families and have a reasonable quality of life, the last thing they worry about is the environment. There are very few people that will live like hermits so they can be good environmentalists. 

    As I began, so will I end. One of my favorite books is Aldo Leopold’s Sand County Almanac. Aldo is regarded as the father of conservationism. The book has much wisdom about how the environment works. It is wise to do everything reasonably possible to minimize our footprints on this planet. As big and wild as it may seem, it is still the only home we have. But we humans are here, and we must measure how we impact each other in the things we do and the regulations we pass. 

In Pets We Invest: Household spending rises in NNY

Photo provided by SUNY CANTON

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Growing Success with Integrity and Consciousness

PHOTO PROVIDED BY Marta Beach

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Improve your Content (and Grow) in Three Easy Steps

Jessica Piatt

If you’re new to the rapidly expanding world of social media, welcome! It’s a fun place where individuals can create, organizations can expand their brand, and businesses can profit.  It can also be an intimidating world for any user, let alone someone doing it in a professional capacity with little to no experience using social media as a tool to market a service or product.  I’m going to give you the three pillars of creating a cohesive strategy to improve your content on social media. Thus, improving your brand awareness.  If you’re ready to commit to investing in your brand’s success on social media, then these steps can help you accomplish that goal. 

Start with Looking Ahead

    Planning is key when it comes to content creation.  When you look ahead, you’re taking the time to consider your brand’s consistency, your target audience, and what you can offer.  This is to say that you are planning with a purpose.  This is an important habit to initiate because it is crucial to transforming your social media presence.  In my last contribution, I went into this concept in further detail in a piece titled Invest in Your Businesses Online Presence.  In this column, I intend to build on the notion by recognizing it as a paramount pillar in your endeavor to improve your content and increase your growth. Planning with a purpose plays a critical role in your cohesive strategy to improve your content by establishing the ground work for your approach.

Quality Visuals Count

    Now that you’re in the habit of planning with a purpose (or on your way there soon) it’s time to talk visuals. Visuals are a key component to any marketing strategy.  They are an effective method of making memorable impressions that can be converted to meet a call to action.  And people like them!  With visual content continuing to yield higher engagement rates than text alone, employing this tactic to your overall strategy, as laid out in step one, will produce real results.  However, keep in mind that quality over quantity holds power when it comes to the visuals you associate with your brand.  The photos and videos you post should fit well into your organization’s visual brand, keeping the audience in mind.  It’s true that a picture’s worth a thousand words, but who are you talking to? The visuals you use should resonate with your audience.  Take photos that both represent your brand and hit your target audience (it’s 2019, this can be easily done by using your smart phone) then post them to the appropriate platforms.  When you maintain your brand, act with purpose, and produce quality visuals, it will show in your content. Now, you can take this practice a step further.  Consider which posts are generating higher engagement rates and respond by giving your followers more of what they demand.  Quality visuals, produced within the parameters of your visual brand, made for your audience will enhance your efforts to improve your content and grow your brand.

Words Absolutely Matter

    Having a brand voice is an essential part of success when it comes to social media.  Using a brand voice gives your audience a consistent feel that maintains your brand’s identity and helps build relationships.  Think about the words you type and how they can help you connect. At the Greater Watertown – North Country Chamber of Commerce we believe that when people make meaningful connections, it leads to growth.  It is for this reason why we provide opportunities for businesses, networking experiences for professionals, and encourage organizations across northern New York to use social media intentionally.  The next time you write copy for purposes of social media, do so with your brand’s voice.  Write for your target audience and be consistent with your messaging.  This practice will help your content feel familiar and better resonate with your audience.  Consequently, writing in your brand’s voice will make your content more impactful, therefore improving your connections and growing your brand.

    Well executed content is vital to growing your presence on social media.  In taking the necessary steps to improve your content, you’re committing to the development of your brand.  Utilize the three pillars of creating a cohesive strategy to improve your content on social media.  Implement planning to establish a foundation, use quality visuals made for your audience, and consistently write in your brand’s voice.  These simple, yet effective, steps will result in improved content and yield growth.

Medicare vs. Medicaid: Defining coverage options in nny

SYDNEY SCHAEFER / NNY BUSINESS
Matthew Wiley of the Jefferson County Office of the Aging.

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