YORKTOWN, N.Y. – Supervisor Michael Grace paid visits last week to Lakeland and Yorktown school districts to encourage them to opt into a tax abatement program intended to attract new businesses to Yorktown and in turn spur economic activity.
“We’re still finding we’re having a tough time competing with other communities,” Grace said to members of the Yorktown Board of Education at their April 3 meeting.
Specifically, he said, the prospect of higher property taxes on top of development costs deter interested parties away from Yorktown.
“It’s not just making the investment,” he said. “It’s the cost to carry that investment. What we see is that more businesses don’t catch [traction] because the landlords have triple-net terms (tenant pays all real estate taxes, building insurance and maintenance) with the tenant, which includes passing the assessed value down to the tenant.”
Grace has said before that this is among the reasons visibly empty storefronts in town, such as the vacant Food Emporium on Downing Drive, persist.
Under section 485-B of the New York State Real Property Tax Law, a business that invests in a property is qualified for a partial tax exemption on the increased assessed property value that results from the improvements made by the business.
The plan applies only to the assessed increase—the property’s base tax would remain untouched. Under the plan, just half of that assessed tax increase is required to be paid in the first year. The exemption decreases by five percent each following year for 10 years until the business eventually pays in full.
The plan was vetted and supported by the town’s Industrial and Commercial Incentive Board, a five-person board assembled last year to explore the town’s incentive options. The town board unanimously approved the tax abatement plan Feb. 21 after a public hearing. The town’s approval authority, however, applies solely to the town taxes. Grace is hopeful the school districts and county will opt in.
“If the town does it on its own we are probably 20 percent of the total tax bill,” Grace said. “Fifty percent of 20 percent [doesn’t] amount to much.”
The two districts, however, are the largest users of the real property tax. According to the town’s tax sheets, Yorktown and Lakeland levied a combined $550 million in real property tax over the past five years.
Grace credited the Yorktown school district to be one of the town’s main attractions.
“Yorktown and the Yorktown school district [are] also taxed very heavily,” he added. “That’s a hardship on all of us.”
Across town, Grace made a similar pitch to the Lakeland Board of Education three days later.
“I think if you don’t do it, it would be a great disappointment to me in terms of trying to implement the vision for the town,” Grace told the board. “I don’t want to go down on my knees but I’m begging you.”
The Lakeland board was inquisitive but receptive. At the end of the presentation, Lakeland school board President Carol Ann Dobson suggested the board’s attorney will draft a resolution of approval.
Yorktown’s school board, however, was hesitant and aired concerns.
Yorktown school board President Jackie Carbone suggested those who have already reinvested in commercial properties will be upset should the abatement go into effect and newcomers get a break. Carbone referred to the district’s tax certiorari reserve, and said that $1 million was the rate the district has maintained for the past five years.
“What we’re not allowed to do is bind a future board by a decision that could cost them money,” she said.
Other board members asked what alternatives exist, and if Yorktown’s competitors have implemented similar or different programs. Some were concerned about the school board’s inability to provide input or make decisions on a case-by-case basis should the district opt in.
The discussion ended with the school board intending to seek legal counsel. At the end of the meeting, Michael Magnani, vice president of the school board, reviewed the abatement legislation and discerned that the school board can terminate its participation in the program at any time.
“We’re currently not bound by the obligation,” he said. “I do think it’s something we have to look at very seriously.”
Grace, speaking in Lakeland, said getting the Yorktown school board to sign up is crucial as that is where most of the town’s commercial developments are located.
“I think this is much more critical for Yorktown,” he said. “It would be a real shame for the Yorktown school district not to opt into the program because I think it will have the biggest long-term positive impact on them.”
Yorktown Superintendent Dr. Ralph Napolitano said the board had yet to reach a decision as of this issue and more information will be available when the district’s spring break is over.