IDA REJECTS KOHL'S PILOT APPLICATION
Carole Osterink
ccSCOOP Editor
02-05-10 - 6:10 p.m. - Despite a resolution unanimously passed by the Board of Supervisors in support of granting a PILOT (payment in lieu of taxes) to Kohl’s, as a condition for their building a new store at Greenport Commons, the Widewaters mall in Greenport, the Columbia County Industrial Development Agency (IDA) this morning rejected the Kohl’s application.
In order to be accessible to the public, the 8 a.m. meeting was held in the Board of Supervisors chamber at 401 State Street, and despite the early hour, it was standing room only—with elected officials, local business owners, and others with an interest in the outcome turning out. Marco Marzocchi, counsel for Widewaters, began by saying he was there to present “more than just an application.” He was presenting “an opportunity with potential.” His PowerPoint presentation was along the same lines as the one he’d made to the Board of Supervisors Planning and Economic Development Committee on January 11, with a few exceptions. Presenting all figures as +, Marzocchi set the county property tax collected on the undeveloped land at $25,000 (previously it was between $20,000 and $25,000) and amount of the tax abatement at $59,000 (previously it was $61,600). He also rolled T.J. Maxx into his forecasts about sales tax and jobs, and since he was presenting Kohl’s as the essential catalyst for the mall’s success, he talked about the potential real estate taxes ($867,000) and sales tax ($1.3 million) when full buildout of the mall is achieved.
From the beginning, the IDA board seemed to be uncomfortable with the idea of giving a twenty-year PILOT to a retail business. (The I in IDA stands for Industrial, after all.) When Marzocchi had completed his presentation, Sid Richter wanted to know how many of the forty-odd Kohl’s stores in New York State had PILOTs and also if there had been any conversations with “attorneys who handle PILOTs” about Kohl’s request. Although John Faso, who was there with Marzocchi, cited three existing twenty-year PILOTs for retail projects in New York State, Ken Flood, Commissioner for Planning and Economic Development, reported that two attorneys he consulted were unaware of twenty-year PILOTs applied to retail. When asked why the PILOT had to be twenty years and not fifteen, Marzocchi affirmed that twenty years is "the best we can do,” and when asked for more definitive numbers on jobs and sales tax, he replied, “If we can’t get over this hump of twenty years, what’s the point of talking about other details?”
When the IDA said they wanted to hear from the public, Alan Dattelbaum, District Manager for Peebles, which has a department store offering a full line of clothing, shoes, and cosmetics in Fairview Plaza in Greenport, was the first to speak. He took issue with Widewaters' claim that there was “no other department store in the area.” (By law, the IDA cannot grant a PILOT to a business that provides a services already existing in the county.) On the question of jobs, he warned that Kohl’s was “notorious for transferring in the first- and second-level management” and advised the IDA to ask how many jobs would be permanent jobs since it is standard practice initially “to overhire to get the store stocked and going” and then lay off employees after a few months. |
|
Members of the public gather at Friday morning's IDA meeting |
The speakers opposed to the idea of granting a PILOT to Kohl’s far outnumbered those who spoke in support of the application. Greenport resident Bob Pinkowski reported that his research had revealed that Kohl’s is a “very well-heeled corporation moneywise,” which shouldn’t be looking to be subsidized by taxpayers. He also reported that Kohl’s stores averaged only 21 full-time employees (Marzocchi anitcipated 37 for the Greenport store)—most of whom were “corporate transits.” Hudson Treasurer Eileen Halloran offered an insightful analysis of the situation—one reinterated by Nathan Winch, a vice president at Kinderhook Bank and a member of the Chamber of Commerce Board of Directors—when she observed that "it seems that the IDA is being asked to settle a landlord–tenant dispute over a lease.” Halloran also suggested that there should be a recapture clause if commitments—in terms of jobs and sales tax—are not made. Hudson Common Council President Don Moore stressed that small businesses were the future and wondered aloud why the county would want to increase the tax burden on existing businesses and property owners in order to subsidize Kohl’s.
Former Kinderhook Supervisor Doug McGivney questioned the assumption that having a Kohl’s in Greenport “will improve our job climate” and predicted that it would have the effect of “displacing people working in local businesses for people earning less at a big-box store.” He pointed out that it was an “anomaly that we are considering a PILOT for a retail store” and asserted that “if we have been determined to be a market, they will come with or without a PILOT.” McGivney introduced a theme that would be taken up by Michael Sullivan and David Colby of the Columbia County Chamber of Commerce when he asked, “Are we getting real, living wage jobs?” Colby, Executive Director of the Chamber, predicted “no real gains economically for the community,” saying that “new retail simply shifts shopping patterns.” He also talked about a “jobs mirage” and warned that the loss of jobs and tax revenue [as a consequence of this new retail project] could be equal to or greater than any gains.”
Stephen Reilly, the attorney who represents Fairview Plaza where Peebles is a tenant, asked if the application complied with Columbia County retail policy and pointed out that, to be eligible for benefits, a business must provide something that is unique and Kohl’s does not provide this. He also questioned why, if Kohl's is anticipating $9.1 million in sales, they are quibbling over $60,000. Melinda Slover, owner of Lili and Loo in Hudson, also questioned Kohl’s eligibility, saying that most of Kohl’s merchandise is available in already existing stores. She urged the IDA to listen to the community and not to be short-sighted. Hudson Alderman Sarah Sterling (D-First Ward), who went on a fact-finding trip to Kingston to check out the Kohl’s there, confirmed that “Kohl’s does not have anything new for this county” and reported that Kohl’s in Kingston employed only 50 people.
Lighting designer Howard Brandston said that he was involved in designing Bal Harbour Shops, a shopping center that “pays all the taxes for the community” of Bal Harbour, Florida. Brandston described Greenport Commons as “the lowest common denominator of shopping mall design."
Speaking in support of the PILOT were Al Wassenhove, who stressed the need for job creation, saying that “our young people deserve an opportunity” and asking the IDA not to “get hung up on this twenty year thing.” Roy Brown (R-Germantown), chair of the Board of Supervisors, also stressed the need for jobs in Columbia County, pointing out that 11,000 people in the county are currently receiving social services. Brown concluded his comments by saying: “The Board of Supervisors request the IDA to accept the application.”
Although Marzocchi warned there were only two possible scenarios: Kohl’s with the PILOT or no Kohl’s, the IDA was not cowed. IDA chair Bruce Bohnsack called the situation of a Kohl’s PILOT and the current unemployment problem a “short-term problem with a long-term fix.” IDA member Bob Galluscio observed that “Marco is very sincere” and suggested that he exercise his persuasion on Kohl’s. In the end, the IDA concurred that the application “in its current form” could not be accepted but left the door open for a “more flexible deal.” There is some indication that the IDA may try to reach an agreement with Kohl’s for a PILOT with a term shorter than twenty years.
|
