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PILOT Programs Have Largely Increased Workforce

PILOT for SKF is in its fifth year, during which time SKF retained the 600-plus jobs and added 18 more

It was years ago when SKF Aeroengine looked to replace their old heat treatment facility with a new one.

The choice was either staying in Falconer to construct a new one or move to South Carolina, a place with a lesser tax burden.

In stepped city and county officials and the Chautauqua County Industrial Development Agency, who provided a payment in lieu of tax agreement with SKF for a 10-year period.

The PILOT agreement with SKF is in its fifth year. During that time span, SKF retained the 600-plus jobs and added 18 more. The latest IDA financial report showed a total of $128,041 being paid out to local municipalities.

The PILOT program is one of a few incentives the IDA offers to manufacturers and companies looking to retain and expand operations. Those who are approved to receive a PILOT either acquire, construct or substantially renovate facilities for manufacturing, warehousing and other industrial purposes.

Suit-Kote, which was granted a PILOT from the Chautauqua County Industrial Development Agency. The company built a new warehouse for their trucks.

The IDA doesn’t lower property taxes on existing properties. Instead, they have the ability to control increases at a rate that is manageable to businesses during the start-up and expansion years.

Companies entering into a standard 10-year PILOT agreement pay 10 percent of the property tax in the first two years and 20 percent in years three and four. Come years nine and 10, they pay 50 percent. In year 11, the property is back on the tax roll.

According to 2016 fiscal year data, 39 projects in PILOT programs carried $13.6 million in total tax exemptions.

Total PILOTs paid to local municipalities totaled $8.9 million, leaving a net exemption of $4.7 million.

During the 2016 calendar year, 32 projects had tax lease and PILOTs, which totaled $9.1 million.

The DoubleTree by Hilton in the city of Jamestown got a tourism destination PILOT, which spans over 15 years and is valued at $1.9 million.

The majority of companies in PILOT programs saw increased jobs numbers. NRG and ECR, both located in Dunkirk, were among the few notable companies that experienced job loss. December’s payment from NRG went down dramatically due to a reduction in power units.

Last year, the IDA Board of Directors approved three major PILOT programs. Two of those agreements dealt with the Ball Hill and Arkwright Summit wind projects.

“Between PILOT agreements and host fee payments they pay directly to the town, that’s around $8,000 a megawatt,” said Rich Dixon, chief financial officer for the IDA.

“If you add an 80 megawatt, that’s $640,000. It’s well over $1 million to taxing jurisdictions and landowners.”

The IDA board also approved a tourism destination PILOT last year for the Chautauqua Harbor Hotel in Celoron, a $30.8 million investment. The DoubleTree by Hilton in the city of Jamestown also got a tourism destination PILOT, which spans over 15 years and is valued at $1.9 million.

Harbor Hotel Design- Pictured is the map design for the Chautauqua Harbor Hotel in Celoron. The project received a tourism destination PILOT from the Chautauqua County IDA.

“A PILOT is a smaller portion of what we do, but it’s important. It does bring revenue,” Dixon said. “We never try to take away from taxing jurisdictions. We’re not here to do that. In the case of SKF, we wanted to keep them here and they wanted to build that facility here.”

Suit-Kote Corp., located on Jones and Gifford Avenue in Jamestown, received board approval for a PILOT in 2015. Specializing in asphalt products and road construction, Suit-Kote built a new warehouse and received a standard PILOT for the project.

“It allows businesses like Suit-Kote to put a stake in the ground,” Dixon said. “They can build something that has a 40-50 year life.”

Dixon said 2016 was a busy year and expects this year to be the same.

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