Years of contention between the General Electric Company and Rotterdam officials over its assessment have come to a close, and local officials are hoping it brings a resurgence of investment.
The Schenectady County Legislature, Rotterdam Town Board and Schalmont Board of Education on Wednesday, June 20, voted to approve an agreement settling tax litigation claims with General Electric Company stretching back to 2003. Several officials applauded the closure as a fair agreement, with an August court date looming if negotiations failed.
“This is a great day for Rotterdam and Schenectady County,” Schenectady County Legislature Chairwoman Judith Dagostino said. “This agreement is a great example of how the private and public sector can work together and work together successfully.”
Under the agreement, Rotterdam is setting the assessment of the GE facilities in the town, totaling approximately 325 acres and containing 43 buildings, at $132 million from 2003 to 2011. The assessment is a reduction from the current $138 million, but increased from a 2007 tax certiorari court decision of $129 million.
Neither the town nor the county has refunded the over-assessed tax receipts ordered by the court, though Schalmont did.
Dagostino, D-Rotterdam, said the county has “worked hard” to improve its relationship with General Electric and the approved agreement helps “solidify” the relationship. The Rotterdam Town Board kicked off the string of meetings on June 20, with Schalmont following and the county convening that evening. All three were special meetings, with voting on the agreement as the sole resolution.
GE spokesperson Chris Horne said the company believes in paying its “fair share of taxes” and was pleased to have reached an agreement acceptable to local officials, which provides long-term stability.
“We need to be able to compete globally while supporting our local communities and we appreciate the opportunity to be able to work out an equitable solution that accomplished both,” Horne said in a prepared statement.
The agreement requires the town to refund around $277,000 and the county to refund around $354,000 for the tax assessments from 2003 to 2006.
For the taxes from 2007 to 2011, GE will receive a refund from the town around $243,000, with the county refunding around $219,000 and Schalmont refunding around $722,000.
The agreement also sets up a 10-year payment in lieu of taxes program between GE and the municipalities, to be administered by the Schenectady County Industrial Development Agency.
The town and county would not pay GE’s refunds out of pocket, because of the structure of the PILOT agreement, instead crediting those payments to GE’s yearly taxes.
The PILOT would begin 2013 and end in 2022, allowing local officials to budget revenues and GE to know tax expenses. The Schenectady County IDA would need to approve PILOT terms with GE before it becomes effective.
Under the PILOT, GE during the first five years would pay a lump sum tax payment of around $4.8 million, which is the equivalent of an assessment of $141 million. In the remaining five years, GE would pay a lump sum tax payment of around $5 million, which is equivalent to an assessment of $146 million.
The district throughout the 10-year agreement would receive nearly $31 million. After allotted credits, the town would receive around $8.32 million over the 10-year agreement and the county would receive nearly $8.63 million.
Ray Gillen, commissioner of the county Economic Development and Planning Department, said reaching the agreement was a “transformative” and “emotional” process and touted the deal as an “historic” achievement.
“I have been in this business about 30 years — I don’t recall another community coming together like this … to pass something that is very, very important to this community,” Gillen said. “This has just been a very high priority.”
County Legislature Minority Leader James Buhrmaster, R-Glenville, also commended county, town and school officials for working together to reach an agreement.
“This is absolutely incredible to be able to get these parties together and work something out for this long,” Buhrmaster said.
Buhrmaster asked how this would affect the county and town under the state mandated tax cap, but County Commissioner of Finance Deborah Mancini said there would be no ill affect.
“We ran it through the tax cap calculations and it should have no negative affect at all on the tax cap calculation,” Mancini said.
County Manager Kathleen Rooney said having an established, steady line of revenue is important within tax cap restrictions.
Also, Gillen said the ongoing litigation had left Rotterdam in the cold, while GE invested $200 million between its Schenectady and Niskayuna properties since 2004.
“From an economic development point of view; rule one is you don’t sue your biggest employer every year,” Gillen said. “You work with your biggest employer.”
Rotterdam Councilman Robert Godlewski was the only elected official who was vocal against the agreement.
Godlewski said he never received any of the information before meeting with Buffardi on Tuesday, June 19, and said he was never asked to be involved with negotiations. The Town Board announced the special meeting to vote on the agreement on Monday, June 18.
“They have worked on this document for probably a month and a half and I find it very unfortunate that I sit here as a Town Board member and I’m asked to make a $6 million decision and I am not given the common courtesy of having somebody explain this document,” Godlewski said.
Buffardi after the meeting confirmed Godlewski was not included in negotiations.
Godlewski asked several questions about the agreement, with county and town officials addressing his concerns, but after about 30 minutes of discussion Buffardi accused Godlewski of trying to filibuster the resolution.
Godlewski continued to pan the agreement, and said he doesn’t want to be “preached to” about GE.
“I was down there in 1985 when they tore down 40 buildings,” Godlewski said emotionally. “I saw 15,000 people go out the gate and I was one of the them.”
Deputy Supervisor Wayne Calder then asked Godlewski if his opposition was personal, but Godlewski said it wasn’t.
“GE is going to do what they want to do,” Godlewski said.