Vernon hears PILOT proposal
Agreement could bring township $1.29 million per year over course of contract
VERNON — Crystal Springs officials presented their Payment In Lieu of Taxes proposal for an indoor water park to the Vernon Township Council on Monday.
While formal action could be taken at the work session, no action was taken at that time.
Mountain Creek is seeking a PILOT agreement with the township known as a PILOT in which the township agrees to a fixed yearly payment of $3.24 million. The amount would far exceed what the township is being paid in property tax which is currently at $15,500.
The program is designed to secure a Redevelopment Area Bond (RAB) to bridge a $28 million funding gap needed to complete the project. While the total yearly payout would be $3.24 million, Vernon Township would only collect $1.29 million a year, with $1.62 million or 50 percent of the payment going to towards repayment of the RAB over 30 years.
In order to qualify for the RAB, the township must first pass an ordinance allowing the proposed area to be zoned as a redevelopment area eligible for tax exemptions. This ordinance was tabled at the April 11 council meeting.
“If New York can offer 10 years tax free for businesses, why can’t we make these concessions to Mountain Creek?” asked Councilman Dick Wetzel asked.
However, this sentiment was not unanimous and there is some concern about the length of time and high percentage rate of tax abatement surrounding the proposed financial agreement.
“I look at the gorilla in the room.” Councilwoman Jean Murphy said. “Thirty years is a long time. How can we possibly strap the town for that long?”
Her concerns were shared by Councilman Dan Kadish, “Most RABs are for infrastructure with some benefit to the town, which I don’t see in this proposal."
Crystal Springs Chief Executive Officer Andrew Mulvihill and General Counsel John Fetterly countered the argument with assurances that such agreements are common. Both men pointed out that this agreement would still guarantee the township significant revenue for 30 years and would include hotel occupancy taxes in addition to the yearly payments.
“(Approximately) $800,000 to $1 million in hotel tax in addition to the property tax.” Fetterly said.
Mulvihill said this project is expected to create approximately 800 new jobs and drive consumerism to the local economy.
The proposed project is a 400-room hotel with 1-, 2- and 3-bedroom rooms. The indoor water park would consist of slides, flumes, a wave pool and tube rides. Other amenities proposed include: a 40,000-square-foot convention center to attract corporate business and a 40,000-square-foot indoor action sports center. Ideally, groundbreaking would begin 12 months after initial approval it would be open for business within three years.
“We regret the things we didn’t do more than what we have done," Council President Brian Lynch said. "I like the sound of $1.29 million, as opposed to $15,500 coming in. Future discussion on the tabled ordinance and proposal is expected.
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