NORWICH - Yet another business is poised to receive a break on its property taxes as a result of the year-end gathering of the Industrial Development Corporation last week.
IDA board members, meeting at the Chenango County Chamber of Commerce offices in the Eaton Center on Dec. 20, decided to proceed with an application to renew a payment-in-lieu of taxes agreement for OSG Pharmaceuticals of North Norwich.
The IDA officially awarded PILOTs to the potential buyer of the Eaton Center in Norwich and Bytheway Publishing Services of North Norwich. A public hearing and formal vote on OSG’s PILOT will follow after the new year, sometime before the company’s previous benefit expires on March 1.
This is the fourth, 10-year, 50 percent rate reduction agreement awarded to the pharmaceutical companies that have occupied the current OSG site since the mid 1970s. The Norwich Pharmacal Company received a 10-year, 50 percent reduction agreement upon constructing the building in 1975. Procter & Gamble Pharmaceuticals requested and received two facsimile PILOTs, one in 1986 and again in 1995.
The exemption saves the company approximately $47,000 a year on property taxes, Executive President Chris Calhoun said. OSG pays nearly $250,000 in property and school taxes annually
Upon receipt of OSG’s initial application request, IDA members attempted to decrease the exemption to 40 percent. Economic Development Director Maureen Carpenter said she suggested the reduction, but Calhoun held fast to the 50 percent rate.
Calhoun said the company had added 150 employees in the last five years and needed the exemption to remain competitive. “Our company is in a very strong worldwide, competitive marketplace. We need to keep control of costs that will translate into more investment into the corporation. It will enable us to compete for more funds from our parent corporation in Pennsylvania,” he said.
Calhoun projected adding 58 over the next five years and making a $4.8 million investment in the company.
PILOTs are traditionally awarded to start-up businesses and expanding businesses that intend to create jobs. Sometimes they are awarded to retain jobs, Carpenter said.
When reached by telephone after the meeting, Chenango County Planning and Economic Development Committee Chairperson Linda E. Natoli, R-City of Norwich, said she was not in favor of renegotiating and renewing PILOT agreements.
“We should do whatever we can to get people up and running and entice enterprises here to create jobs. They should be start-up monies,” she said.
Norwich businessman Peter Smith, of the Norwich Investment Group of Wachovia Securities, said PILOTs “make sense when its the difference between a business being here and not being here. We need the jobs.”
“It seems strange to have an agreement like that for such a long time period, but he’s (Calhoun) gotta do what he’s gotta do.”
Town of Preston Supervisors Peter C. Flanagan said he hoped that with the proceeds from the sale of the Eaton Center, the IDA “could be weaned” from the annual taxpayer subsidies it receives, about $75,000 plus.
“Sooner or later these places need to go back on the tax rolls and quit letting their neighbors pay their taxes for them,” he said. Flanagan said the original premise for the Eaton Center as a business incubator has “been a big disappointment to me.”
“If you look at the client list there – mental health, the school district – it doesn’t appear that we were incubating any new businesses.”
“I’d sure like to known are they are all going to go back on the tax rolls,” he said.
Natoli said, “I think it’s wonderful that the Eaton Center has found a buyer, but my fear with all of these things is what happens at the end of the tax breaks. What if companies decide to disappear?”
“What about the little independent business owners who only have their pocketbooks to relay on and nothing to negotiate? Look at all the businesses that go belly up because they had taxes they couldn’t afford. I have really mixed feelings about this. It’s a catch twenty-two situation,” she said.