January 22, 2009
IDA rescinds tax breaks for Barden Homes
Company will have to pay full tax bill on Preble plant that it will shutter by spring
The Cortland County Industrial Development Agency board voted Tuesday to notify taxing authorities that Barden Homes should begin paying full property taxes for its Preble plant, which will soon close.
The company, however, will not begin paying full property taxes to Tully Central School District until September. It will not pay full property taxes to Cortland County until next January, according to IDA President Paul Slowey.
Because of its PILOT agreement with the IDA, Barden Homes is paying property taxes on 25 percent of its property assessment for 2009 and 25 percent of its assessed Tully School District taxes for the 2008-09 tax year, which began in September.
The PILOT agreement took effect in 2004 after Barden Homes built its Preble plant and moved its operations from Homer.
Barden Homes builds customized prefabricated homes, churches and commercial buildings that are sold across the Northeast. Earlier this month company officials confirmed that Barden Homes will close its manufacturing plant in Preble to consolidate its operations in Middleport, Niagara County.
The IDA’s PILOT program exempts companies from paying property taxes for employing a certain number of people in Cortland County.
Slowey made a motion Tuesday to notify taxing authorities, and the board voted unanimously in favor of the motion. Slowey said the IDA will notify the county and Tully school district by next week.
The IDA found that Barden Homes was in violation of the IDA’s PILOT program in 2008. Executive representatives from Barden Homes were scheduled to appear at the IDA meeting Tuesday. Slowey said the IDA had planned to discuss the company’s employment numbers to see if it could help the company before it announced its closing.
Barden Homes became exempt from paying property taxes to the county in January 2006 and from Tully school district in September 2005, said Empire Zone Coordinator Karen Niday, who is the accountant for the IDA.
Niday said companies in the PILOT program are fully exempt from paying property taxes in the county, town and school district for the first three years. Then, they pay 25 percent of property taxes for the assessed property value in the fourth and fifth years, 50 percent for the sixth, seventh and eighth years, 75 percent for the ninth and 10th years and 100 percent in the 11th year, which is the final year of the PILOT.
If it had stayed in compliance with the employment requirement, Barden Homes would have began paying full property taxes to the school district in September 2015 and to the county in January 2016.
In 2007, Barden Homes was in compliance with the PILOT agreement with 93 employees, Niday said. It paid no property taxes to the county that year.
The company fell below its required number of employees for the PILOT in 2008. The IDA received a letter Nov. 12 saying Barden Homes had 62 employees, Niday said. It needed to have 84 employees, or 80 percent of its projected employment number of 105, Niday said.
Slowey said the IDA received Barden Homes’ employment numbers in October. Because tax rolls are not finalized until March 1, Barden Homes will only pay 25 percent of its property taxes in a year in which it is well below its employment requirement. Mark Barden said Jan. 5 that about 25 sales and office employees will remain in Preble for the immediate future.
According to Cortland County Real Property Tax Services, Barden Homes’ tax bill to the county for 2009 is $7,934. Barden Homes would have paid $31,737 to the county if it had not received the tax break. The property of Barden Homes was assessed at $2.2 million in 2008.
Niday is also the Empire Zone coordinator for Cortland County. The Empire Zone Program also gives tax breaks to local companies, including Barden Homes, for employment and investments.
Barden Homes was not in violation of the Empire Zone program requirements in 2008, Niday said, because in that program the tax breaks are based on employment figures from the previous year.
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