Tupper hotel seeks tax break; town feels sidelined by process through IDA
TUPPER LAKE — The town board is drafting two letters about the proposed Crossroads Hotel in the uptown business district, one to the state Adirondack Park Agency supporting the project and another to the Franklin County Industrial Development Agency expressing displeasure that board members were not notified about a public hearing on a 20-year tax break the IDA is contemplating for the hotel.
While board members unanimously said the hotel will be an economic driver in town, they took issue with how a payment in lieu of taxes (PILOT) agreement process is being handled through the IDA, saying it leaves the town and its residents out of the process.
The hotel, a project of Crossroads LLC — owned by Tri-Lakes area residents Betsy Lowe and Nancy Howard and managed by Skyward Hospitality of Saranac Lake — is proposed to be built on the corner of Mill and Park streets. The hotel has traveled a long and complicated road to get to this point and still needs APA approval.
A PILOT allows developers to not pay certain taxes on the property and instead compensate the taxing entities with preset, lower payments.
As of Sunday night, town Supervisor Patti Littlefield was unsure if the town board would have the final say in this PILOT, as it usually does. She said her discussion with IDA Director Jeremy Evans gave her the impression the IDA could approve or reject the PILOT. Evans could not be reached for comment Sunday.
Town attorney Kirk Gagnier said he is researching how the PILOT might work. Both he and Littlefield were waiting for more details and communication to come out in the public hearing.
The town council of North Elba recently rejected a PILOT request to the company behind a planned rebranding and rebuilding of the Quality Inn hotel in Lake Placid.
The public hearing will be held at 4 p.m. Tuesday at the Tupper Lake village office. A maximum of 10 attendees are allowed in person, due to COVID-19 restrictions, but anyone can call in over Zoom at https://zoom.us/j/4035865192.
Gagnier said the proposed PILOT agreement contains a “substantial break on property taxes for the hotel.”
The PILOT carries broad possibilities for exemptions, he said, including state and local sales tax, use taxes and mortgage tax. He explained that the “straight lease transaction” described in the meeting announcement means the IDA could own the property title and sublease it back to the developer for a fee.
Town Council member John Quinn said though he found the provided spreadsheet confusing, he worked out some of what a PILOT agreement could mean for the town, as well as the Tupper Lake village and school district.
“Over the 20-year life of this PILOT, the taxing entities could lose out on $1.7 million of taxes that they would have otherwise collected,” Quinn said.
Gagnier said the PILOT has not gone before the IDA board for action yet.
Littlefield said the town never received notice of this hearing. Tupper Lake Free Press Publisher Dan McClelland said he did not, either. A legal notice of the meeting ran in the Enterprise on Dec. 26.
“We’re kind of concerned about the timing and the way we were notified,” Littlefield said at a Wednesday town board meeting. “If people don’t know about it, then they don’t know about it. At least if they know about it, then they can choose to not participate.”
Littlefield said she learned about the public hearing last Tuesday when she received a certified mail letter from the IDA at her home address.
She said she wants the process to be fair to Tupper Lakers. She said other businesses may not support this PILOT and residents may want their thoughts on the agreement to be heard.
“The reality is that that PILOT is going to affect Tupper Lake and the people who live here,” Gagnier said. “That’s the whole point of a public hearing, is to hear what the public has to say.”
Gagnier suggested the board members send a letter to the IDA, letting it know they think the PILOT agreement should be a measured decision not made in haste. He said the IDA may not be trying to make the process hasty, but with the holidays and the lack of communication with the town, it can appear that way.
“I feel like a mushroom. Kept in the dark and fed full of … um,” Quinn said. “I think at a minimum we want to express displeasure at the total lack of transparency here. … I think the IDA and the applicant here have been remiss in not being up front about this.”
Gagnier said nobody likes paying taxes, but everyone understands that everybody has to pay their fair share of them. He also said a PILOT for the hotel could benefit the town, making the project easier to complete. Quinn pointed out that a PILOT also benefits the investors.
Littlefield said PILOT agreements are usually made through the town, which discusses the agreement with village and school officials to get their thoughts on it before deciding. She has not heard of the IDA issuing them before, and did not know it had the authority to do so. But Gagnier said the IDA may have the authority.
Littlefield worried that the town would not get to do anything except make a written or verbal comment during the public hearing.
Despite their frustration with the PILOT meeting, the town board members said they broadly support the Crossroads Hotel.
“We all support the project. We all agree, for sure, that it is a worthy project,” Littlefield said. “We’re all happy to have it, that’s for sure, but I think, publicly, people should know about the PILOT.”
“I feel very strongly about the project, but I’m very leery about the PILOT,” Councilman Mike Dechene said, adding that he wants to learn more.