The Costco proposal is getting a lot of buzz on this site. The developer and his attorney bandy about large sums of taxes and a lot of jobs flowing into community. This is what a developer, and if he has a good attorney does. Several years ago someone did an analysis of what the net amount of tax revenue a project actually returns to the community. It seems the county and the state takes their cut, in fact the state takes a double cut, I wish I still had a copy, but it was a very modest sum.
I am not against the Costco, but people should have a realistic view. If they expect some serious tax relief, and that is the sole reason for their support, you may be disappointed. I am sure Costco does not pay higher wages than the other big retailers, so enriching the population of the community is probably not going to happen.
I would rather see Costco than a high density housing complex on the site, which can really inflate a school budget.
One of the big dangers of large developments is that many times their property tax assessments are too high. In the beginning they will accept almost any number the town calculates, they have no downside in doing this as you will see in a moment. The parties representing a project want a quick approval, making a fuss over taxes, kind of takes away one of their value propositions. They have time, plenty of time, so they wait.
In time they usually hire a specialized law firm and file a tax certiorari. Expert commercial appraisers submit their opinion on behalf of the owner and a Judge makes a decision. The decision is usually against the municipality and a figure is set. Here is one example reported here today:
“The Riverwoods condominium development is set to get almost $1.4 million in property tax refunds, under the terms of a settlement approved by the New Castle Town Board.
The agreement, which was unanimously approved by the board at its Tuesday meeting, includes a total refund of $1,392,494.81.
Looking at each tax collecting entity's share of the payout, the agreement calls for the town giving a refund of $219,996.47 for 2009, 2010 and 2011 property taxes. Westchester County will refund $237,493.28 for that time period. The Chappaqua school district will have the largest share, at $935,005.06. The 2011 school tax refund will be accomplished through a tax cut for the 2012-13 school year, rather than a straight payment.”
As you can see the school district takes the biggest hit in this proceeding. Chappaqua maybe wealthier than Yorktown, but I am sure it hurts. Yorktown has had its share if large hits over the years.
Does this mean I feel the development should not move forward? No, I would suggest that the town bring in the same level of appraisers used in these actions. Appraising a large commercial development is far more complex than single family homes. In this way, an unpleasant surprise may be avoided.
I'm not sure that comparing this to the housing complex in Chappaqua is reasonable. Housing prices have taken a dive and presumably the value has gone down quite a bit. And it's much larger than this, which despite all the comments is not really all that large. Is it appropriate for the town to get some agreement not to file a tax certiorari for some number of years as part of the approval process? I don't know, but it could be something to consider.
I was trying to say is that large projects have a tendency to file these tax certioraris as a part of doing business. You do not want them to wait years since the amount rises. The IBM Research Center did it. Indian Point did it and almost wiped out Buchannan. All I advised is that the Town get some experts in here to avoid the problem if possible. Properly appraising commercial property is very complex.
I think Costco supporters just want a place to shop, sick and tired of living in this shopping backwater. For many their only recreation aside form TV is shopping. As for taxes I contend, all Latin phraseology aside, you could have the top 100 Forbes companies with a serious presence here in Y’town with no effect whatsoever on taxes.
I was raised around Politics, one of my best friends Father's was a County Judge and very big in the Republican Party in the State. When my friend passed away suddenly the Judge took his closest friends under his wing. He taught us how things work. Keep reading please. I am was simply informing people not to have unrealistic expectations about certain things. COSTCO will file a Tax grievance at some point down the road, they all do. This is a regular business practice and it will happen. I was simply advising the Town to bring in some outside experts to help our local people on this particular project to be sure when it does happen, the impact is minimal. When your School District has to fork over almost $1M, your will taxes will have to go up and you will be angry, That Robert is all I was saying.
I think that was a well written post. I like that it pointed out a fact that hasn't received much attention. The developer's team will exaggerate the tax benefits, which are nominal in reality. You're just pointing out that it'd be smart for Yorktown to make sure the development (if approved) is assessed at a level that will not leave the door open for a tax cert later that would leave taxpayers footing a refund to Costco. I appreciate your apolitical angle and think it's a great suggestion. I believe it's the fiscally responsible thing to do. Keep up the good work.
The developer hires the best local Lawyer he can find to work their way through the process, and he is bound to to do the best job for their client. The Sales Tax numbers are correct, however people believe the Town gets a bag of money every week, They are simply unaware the Sate and County get a sizable piece of the action. The Town and School District will see a fraction of the gross taxes collected. This is fine as long as people understand that. The Town Officials are charged with protecting the Town as best they can, I made a simple suggestion based on having Tax Certs put in front of me when we had barely enough money to keep the District afloat. Politics has nothing to do with it. Running a Public entity is running a business.
The School District will be receiving some of the Tax money and i know they do need it. Some people in the UTY did the numbers on similar project some years ago. It was really shocking how much the County and State take, and how little comes back to the Town and School District. As I said in the second paragraph of what I originally wrote. I am not against COSTCO. I just would like people not to have unrealistic expectations. If something else commercial was built there we run the same risk of having a Tax Cert. It is not unique to COSTCO or Yorktown.
Perhaps the UTY people were confused?
It is the property Tax which can become a bear trap. As I pointed out up in the beginning. Yes commercial property is taxed differenly, it can also be more complex which is why it is challenged more often. If you read the aedvertisements for some of the law firms that challengie taxes as their main practice, for some clients they do ia challenges yearly. That is why I suggested the Town engage a experts to assitist out local people. it is preventavie medicine.