IDA looks to clarify misconceptions about tax exemptions
On Thursday the Riverhead Industrial Development Agency was the latest government entity invited to meet with the Riverhead Town Board and new Supervisor Laura Jens-Smith.
IDA executive director Tracy Stark-James used the opportunity to explain the workings of the agency and clarify what it does. The meeting comes soon into a new administration whose leader, Ms. Jens-Smith, was critical of the IDA during her campaign last fall.
“I’m actually hoping to to dispel some IDA misconceptions and confusion about what the agency actually does and how important and beneficial it has been to our community,” Ms. Stark-James said.
As a candidate, Ms. Jens-Smith called for the IDA to disband, asking whether residents were paying more in taxes as a result of IDA benefits the board granted to companies. Calls to the supervisor on that point were not immediately returned.
The IDA was formed in 1980 and its mission includes attracting new business to town, helping existing businesses stay here, and growing job opportunities in Riverhead.
“Economic development is a long-term investment. There’s no instant gratification and the agency looks at long-term progress, long-term impact and long-term end results,” Ms. Stark-James said.
There are 19 IDA projects that are part of the payment in lieu of taxes, or PILOT, program out of a total of 27 active IDA projects in town, Ms. Stark-James said, referring to the 2016-2017 reporting year. The PILOT projects approved by the IDA board are allowed to phase in tax payments. The Riverhead school district received nearly $750,000 during that reporting period in PILOT payments out of a total of $1.5 million generated from those 19 projects, she said.
One of the areas Ms. Stark-James wanted to clarify was the definitions of “PILOT” and “abatement” that are part of the IDA process.
PILOT is a contract between a property owner and the IDA to pay taxes approved by the agency on a specific schedule, Ms. Stark-James said. An abatement is a deferment of a tax payment. Not all PILOTs contain abatements, so a 30-year agreement approved by the IDA doesn’t necessarily mean a 30-year abatement.
Abatements carry a negative connotation, but the IDA’s ”standard policy for an abatement is the payment of current taxes and a a phase-in of additional tax revenue that results from encouraged improvements made to the property and ultimately the increase of assessed value,” Ms. Stark-James explained.
There have been times when the agency has been more aggressive in its abatement schedule in an effort to expedite investment or be more competitive, such as in the push to revitalize downtown Riverhead, Ms. Stark-James said. But there’s never been a roll-back to $0 in tax payments in the IDA’s PILOT history, she said.
Those downtown examples include the projects near the Long Island Aquarium, Summerwind apartments and retail and the incoming Georgica Green Riverhead Apartments, she said.
After the presentation, Ms. Jens-Smith asked questions about how the IDA competes with other similar agencies on Long Island and how it makes information on businesses it deals with available to the public. Ms. Stark-James said the IDA has has limited resources and she said she would like to include a budget line to hire help in maintaining the agencies website.
“This agency probably squeaks the best benefit packages out of the companies when they come. We’re tighter than other agencies,” Ms. Stark-James said.
“I think sharing that and celebrating that would be good if we’re bringing these jobs in, we’re creating more jobs and we’re working with the businesses to come in here,” Ms. Jens-Smith said. “I don’t think businesses want to come in here and see IDA, IDA, IDA in the newspaper without information. That’s what happens.”
IDA board member Lori Ann Pipczynski said she hoped the Town Board would join in an effort to show the public what the IDA does.
The supervisor suggested meeting again in six months.
“I think we’re kind of on the same page with how…to accomplish the goals we’re all looking forward to and we can see what we’re able to do,” Ms. Jens-Smith said.
