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Southeast Considers Extended Tax Break For Developer

By Lori Samuels

Developers with the Commercial Campus at Fields Corner in Brewster have applied for an extended tax relief agreement during the construction phase of the project, which will bring a distribution center to an area just off Interstate 84 at Route 312.

While the Southeast Town Board discussed the proposal during its July 13 meeting, no decision was made.

The project includes the construction of two warehouse/distribution buildings totaling 933,000 square feet on Pugsley Road. It is anticipated that the project will provide significant economic benefits in the form of tax dollars, especially to the school system, along with creation of more than 1,000 new jobs.

Daniel Tartaglia of Veneziano & Associates in Armonk, representing Brewster Industrial Owners, LLC, requested acceptance of his client’s application for a 12-year Payment in Lieu of Taxes agreement, instead of the standard 10-year duration. This means the developer would pay taxes on whatever buildings are currently constructed at the site for the first two years of the agreement. After that, once tenants have moved in, full tax payments would be made.

The PILOT mimics New York State property tax law. According to NYS section 485.b exemption code, certain commercial properties outside of New York City are allowed partial exemption from taxation for a period of up to 10 years, but are liable for special assessments.

Tartaglia made the case that because there is a lot of competition in the region to attract tenants to this type of commercial project, it takes more time to get tenants on board before construction is complete.

Town Assessor Laurie Bell indicated that land values currently under construction would be much higher at full valuation, once construction is complete. By March 15, whatever buildings are on the site, will be assessed, she said.

According to Bill Nulk, chairman of the Putnam County Industrial Development Agency, accepting the PILOT application is important because “it’s beneficial for us to be competitive in the region.” He also indicated that “improvements to our area that has been underutilized” are important and that large, open buildings can be repurposed for other industrial uses.

Nulk also indicated that the financial benefits to the developer get “clawed back” if the development isn’t fully occupied within a certain period of time. This means the developer will pay back financial benefits they have derived.

All three taxing entities – the Brewster Central School District, Putnam County and the Town of Southeast – must accept this arrangement if it is to move forward. Nulk indicated that the school board is amenable and is waiting to see what the town and county will decide.

Town Supervisor Tony Hay acknowledged some benefits to the agreement, saying it is “not a deal breaker.”

“I understand you will be getting a bigger bang for the buck later on,” he said. “(But) I don’t want to get accused of making allowances for just one builder.”

Discussion on the matter is expected to continue.


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