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JCIDA board authorizes Morgan apartments PILOT

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Following six months of vigorous debate with taxing jurisdictions, the Jefferson County Industrial Development Agency’s board of directors gave the final approval Thursday to a 10-year payment-in-lieu-of-taxes agreement for Morgan Management’s 394-unit apartment complex on County Route 202.

The unanimous vote for the PILOT followed approval by the Jefferson County Board of Legislators, Watertown Town Council and Watertown City School District Board of Education.

“This is the conclusion of many tough months of disputes and negotiations,” said agency CEO Donald C. Alexander. “We’re still short of Fort Drum’s housing request for 1,035 units, but this project goes a really long way.”

Morgan will pay $2,122,468, or 50 percent of full taxation, over the first 10 years, which will be divided among the three taxing jurisdictions. Morgan would start paying the full amount in property taxes in year 11 — about $464,000 — and increases on the property’s assessment will be capped at 1 percent for years 11 through 15.

But while the PILOT has been approved, the community’s debate about the apartment complex’s implications continues.

Watertown City School District — whose board narrowly approved the PILOT in a 4-3 vote May 1 — is still trying to project how the apartment complex will affect enrollment. It could lure more families with children to the district for an increase of anywhere from 300 to 500 new students.

To help address the district’s concerns, the Community Rental Housing Committee approved $50,000 to fund a study that will research the impacts of the tax breaks for Morgan Management and another developer, COR Development. But JCIDA board member W. Edward Walldroff questioned whether JCIDA could intervene with any additional help on the district’s behalf.

“I think there’s a lot of sensitivity about this with the school district that could cause future problems,” he said.

In response, Mr. Alexander said the JCIDA has no financial obligations to assist the school district but may be able to offer advice, if needed.

“This study is important, because we think it will put a finer point on the exaggerated numbers in terms of the impact on the school district,” he said. “It’s a complex issue, and there’s only so much we can do to help.”

Board member Kent D. Burto, a member of the Carthage Central School District Board of Education, pointed out that the project could also be beneficial because Watertown will gain per-pupil aid for students.

“The school district is already doing well because of the students it gets from Fort Drum,” he said, “and right now we don’t know what the impact is going to be.”

In a 4-1 vote, the board also approved a sale leaseback agreement for Bay Brokerage Inc., a customs broker based on Wellesley Island, to build a 16,800-square-foot warehouse and office building at 42832 Route 12 off Interstate 81. The agreement will give the company a break on sales tax and mortgage recording tax payments during its construction phase.

Board Treasurer Michelle D. Pfaff, who voted against the agreement, said more information about the company and project should have been presented by the IDA staff to the board.

“I’m not voting for this because I don’t have enough information to decide whether this will be good or bad for the community,” she said.

Mr. Alexander said the staff will provide more background information regarding future projects to be approved by the board. But he said Bay Brokerage, which will hire 12 full-time employees, intends to break ground on the project as soon as possible and urged the board to approve the plan.

The board also approved the following items Thursday:

n A five-year payment-in-lieu-of-taxes agreement was approved for the ReEnergy Plant at Fort Drum. The PILOT offers a 50 percent abatement on an average assessed property value of $30 million for the term, starting in 2013. The Jefferson County Board of Legislators approved the PILOT Tuesday; the Carthage Central School District board will vote Monday and the town of LeRay will vote Thursday.

n Hi-Lite Markings Inc., Adams Center, received approval for a $250,000 loan with an interest rate of 5 percent. The company, which has 81 employees, plans to create 17 jobs over the next three years and will receive a collective $975,000 in loans for cash flow purposes; the North Country Alliance will provide a loan of $500,000 and M&T Bank will offer a loan of $500,000.

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