Financing structure drops taxing districts for PILOT payments
The Bethlehem Industrial Development Agency is moving at top speed to prepare a plan to make investing in a Vista Technology Campus infrastructure project a more palatable prospect.
It’s a concept that has already seen significant work, and the latest iteration of a financing plan would see the IDA issuing tax free bonds to developers, who would then sell the bonds to investors. The nearly $6 million would pay for the construction of the 3/4-mile Vista Boulevard and the utilities that will run along it.
The IDA would be repaid through a payment in lieu of taxes (PILOT) agreement. The public organization often strikes such deals to help attract business to town, but it’s rare to see one connected to the actual construction of a project.
If such a plan is to work, it would require the involved taxing districts to pass resolutions agreeing to pay off the IDA-issued bonds with their PILOT receipts.
We need to coordinate carefully with the school, the county and the town, said Joseph Scott, bond counsel to the IDA, who has been developing the financing plan.
Scott said this plan’s structure will make it easier for Vista developers to find investors because the tax-free bonds will be a more attractive product.
`That’s more conducive for a long-term type of project,` he said.
The bond amount is still not entirely clear. In question is a $1 million investment by Albany County that was promised in 2003. Just a month ago, officials there were noncommittal, saying more high-tech job prospects should be shown.
County officials could not be reached to comment on the new structure.
Now abandoned is a plan that involved having the town itself creating special taxing districts within the park so tenants could pay back debt service on tax-free bonds ` it would have been a first for New York State. The structure would have not only proposed legal hurdles, but had some wondering if the town or county could take exposure on the borrowing should Vista falter.
Mark Hennessey expressed those concerns when he voted against moving forward with that plan. He’s a member of the IDA and Town Board.
`I think taking the special assessment district out of there is certainly an improvement,` he said of the new plan. `I still have a lot of questions, and I think other members of the board do too.`
Proponents of IDA involvement hope this plan would hasten build out of Vista. Columbia Development (a major stakeholder) has said an interested tenant needs a building ready by Nov. 15, and ground can’t be broken there until a road is at least partially built.
`We need to get an inducement resolution very quickly here,` said IDA Board Member Joesph Richardson. `We could lose that 110,000-square-foot building.`
So far, it is clear various retailers, including a ShopRite grocery store, have signed on to locating at Vista. The identities of potential non-retail tenants remain closely held by developers.
The IDA still has to review the financing plan before it can be approved, which means at minimum a trip through the agency’s finance committee. Since the agency only meets monthly, a special meeting has been scheduled for 7 a.m. on March 2 for the finance committee to review the plan. It’s possible action could be taken by the full board at that meeting, as well.“
