Fulton’s no-tax-increase 2010 city budget is fueled, in part, by letting several tax agreements die.
Mayor Ron Woodward said the city will not renew its payment in lieu of taxes (PILOT) agreements with the developer of the River Glen Mall, with the company running four hydropower plants in the city, and on the former Sonoco plant.
That means that those properties will now be subject to county, city and school taxes. PILOT agreements are common economic development tools to give investors some certainty in the early years of major projects. Most PILOTs run for 10 or 15 years, but can be renewed.
The end of the PILOT agreements is projected to put about $200,000 into the 2010 city budget, Woodward said. The River Glen Mall is assessed at about $8 million, Woodward said. That will result in about $131,000 in taxes.
The city got nothing from the PILOT on River Glen Mall. At the time the shopping center was built, the city kept all of the sales tax generated within its borders. The mall property was annexed into the city after a long battle with the town of Volney. Sales tax revenue “was the bigger benefit,” Woodward said. In addition, the developer spent its own money to build water and sewer lines for the center.
The city has since given up its sales tax rights, the next-to-last non-county municipality to do so, in exchange for a guaranteed share of sales taxes collected by the county. (This sentence was changed from its original version; see comments below for details.)
Ending the PILOT on the hydropower plants will bring in about $57,000 on an assessment of between $3.5 and $4 million, Woodward said.