A. Background:

The Fulton County Industrial Development Agency (IDA) was created in 1970 by an act of the New York State Legislature as a corporate governmental agency constituting a public benefit corporation. The purpose of an Industrial Development Agency (IDA) is:

“to promote, develop, encourage and assist in the acquiring, constructing, reconstructing, improving, maintaining, equipping and furnishing industrial, manufacturing, warehousing, commercial and research facilities and thereby advance the job opportunities, general prosperity and economic welfare of the people of the state of New York and to improve their standard of living.”

B. Mission Statement:

The IDA’s Mission Statement is as follows:

“The IDA’s mission is to create and promote economic growth and prosperity for both residents and entrepreneurs in Fulton County. The IDA’s role in Fulton County’s Economic Development Program is to develop and maintain an inventory of shovel-ready sites for new and expanding businesses, offer financial incentives, as may be required, to encourage the creation of new and retention of existing jobs and expand the County’s tax base. In doing so, the IDA strives to make Fulton County a desirable place to live and do business.”

C. Tax Exemptions:

The New York State General Municipal Law authorizes IDAs to offer three (3) types of tax exemptions to stimulate private sector investment and create jobs:

1. Real Property Tax Exemptions:

New York State Law designates IDA’s as tax exempt entities.  When an IDA holds title to real property, New York State Law says all improvements on the property are exempt from real property taxes. However, the land that the improvements are located on remain taxable.

However, for projects the IDA is involved with, the IDA requires companies to enter into a Payment In Lieu Of Tax Agreement (PILOT).  A PILOT is a contractual agreement between the IDA and a company that states that even though the project is tax exempt due to IDA ownership, the company shall make PILOT payments to local taxing jurisdictions in lieu of paying taxes.  PILOT Agreements stipulate that companies make PILOT payments to local taxing jurisdictions that are based upon a percentage of the property tax that would otherwise be due on the property was not owned by the IDA.  Once a PILOT is executed, the company makes the required annual PILOT payments to local taxing jurisdictions in accordance with the PILOT.  It is the responsibility of the local taxing jurisdictions to issue annual invoices under a PILOT to the company and to ensure that payments are received in a timely manner.

The IDA provides Payment in Lieu of Tax Agreements to eligible projects in accordance with its Uniform Tax Exemption Policy (UTEP).  The IDA’s current UTEP states that it will provide PILOT’s modeled after Section 485-b of NYS’s Real Property Tax Law.  Section 485-b states that a company can receive a 50% exemption on the assessed valuation of the improvements on the property in year 1.  The exemption then decreases 5% a year for 10 years.  After ten (10) years, the company would make a PILOT payment equivalent to 100% of the amount it would be paying in real property taxes if it owned the property.  During that 10-year period, the company would be making “PILOT payments” to local taxing jurisdictions and not “property tax payments.”  Once the Lease and PILOT Agreement the IDA has with a company expires, the property then returns to the tax rolls.  At that time, the company starts making “property tax payments” to local taxing jurisdictions and no longer be making “PILOT payments.”

The following IDA Projects have active PILOT’s as of December 31, 2022:

2. Sales Tax Exemptions:

IDA’s can offer eligible projects an exemption from New York State and local sales taxes on construction materials and equipment. The exemption is generally limited to the construction, reconstruction or installation period and cannot cover ongoing operational costs.

The following IDA projects had active sales tax exemptions available in 2022:

3. Mortgage Recording Tax Exemption:

If an eligible project involves a mortgage and that mortgage needs to be filed in the Fulton County Clerk’s Office, the IDA can offer an exemption from New York State’s mortgage recording tax which is currently 1% in Fulton County.

D. Financing:

IDA’s can also provide bond financing for a project.  Financial institutions, such as banks, insurance companies or private individuals purchase these bonds as an investment similar to an individual purchasing a U.S. Government Savings Bond. By purchasing a bond, a private investor lends its funds to a business. The business commits to repay the principal and interest, if the bonds are taxable, to the investor.  The business and the financial institution, independent of the IDA, negotiate the terms, interest rate and other conditions of the transaction. The IDA acts as an intermediary for this private transaction.  There are no IDA or public funds involved in an IDA bond transaction.

The IDA does not have a loan fund or pool of money to use to help finance projects.  The financing referred to here is private funds coming from banks, financial institutions or private investors.

The IDA, Fulton County Government or Fulton County taxpayers do not lend any public money nor do they assume any responsibility for repaying bonds if a company defaults on any payment.  There is also no financial liability on the IDA, Fulton County or taxpayers.  Bond payments are solely the responsibility of the company borrowing the money.

E. IDA Projects:

The following is a list of all active IDA projects as of December 31, 2021:

The IDA Board met twelve (12) times in 2022.  The following is a summary of the key activities addressed by the IDA Board in 2022:

1. TRYON TECHNOLOGY PARK PROJECT:

a. Vireo Health:

The IDA Board sold approximately 92 acres of land to Vireo Health of NY that Vireo used to start construction of a new 324,000 SF building.  This sale included Lots 1 and 2 in the Tryon Technology Park (TTP) as well as additional acreage located adjacent to the Park.  This building will be used to grow and process adult-use cannabis. In 2021, the NYS Legislature legalized the adult use of cannabis in the State.  Construction of this 324,000 SF building began in 2021 and is scheduled to be completed in 2023.

In 2022, Vireo Health announced it has agreed to be acquired by Verano Holdings located in Chicago.  In October 2022, Verano announced it was no longer pursuing the acquisition of Vireo.

b. Winstanley Enterprises:

In October 2021, the IDA Board executed a Letter of Intent (LOI) with Winstanley Enterprises (WE), LLC of Concord, MA.  The LOI stated that the IDA was interested in selling 243+/- acres of land in the TTP to WE.  The LOI further stated that WE would use these lands to pursue the construction of the following buildings:

⁽¹⁾Site 3 would be considered for a separate standalone building.  However, in the event Site 3 is required to facilitate a larger development on Site 1, then Winstanley Enterprises, LLC will utilize Site 3 to accomplish this.

The IDA Board, in November 2021, executed a Purchase and Sale Agreement (PSA) with WE.  WE began its due diligence review of the 243+/- acres it desired to purchase from the IDA.  This included conducting a number of studies including survey, topo, geotechnical, wetlands, utilities, zoning and environmental and others.  This due diligence was completed in 2022.

In October 2022, WE advised the IDA that their cost to abate and demolish the buildings on the lands they wanted to purchase was significantly higher than originally expected.  As such, WE advised it could not purchase the property for what it originally offered.  After discussing options, the IDA Board, at its November 8, 2022 meeting, agreed to reduce the price for the land with the reduction serving as a credit back to WE for what their actual cost will be to abate and demolish the buildings compared to what WE originally estimated the cost to be.  The IDA executed Amendment No. 1 to the PSA to formalize the change in the purchase price.

In December 2022, WE advised the IDA that they were not going to move forward, at this time, to purchase the 243+/- acres at Tryon.  WE advised that it would execute a 3-year option with the IDA and continue to market Tryon to companies.  The IDA Board agreed to this Option and authorized its Chairman to execute a 3-year Option Agreement with WE.

c. Fulton County Sewer District No. 4:

1) Transfer of Sewer System

The IDA had owned, operated and maintained the sewer system serving Tryon since Tryon was deeded to the IDA in 2014.  In 2022, the Fulton County Board of Supervisors created Fulton County Sewer District No. 4 to take over ownership of the sewer system.  The IDA Board took two (2) actions in 2022 regarding the Sewer District:

a. Hired Ferguson & Foss Surveyors to prepare metes and bounds descriptions of the 35+/- acres of land the IDA would transfer to the Sewer District.

b. Hired CBRE to prepare an appraisal of the fair market value of these 35+/- acres. All of the existing sewer infrastructure is located on these 35+/- acres.

In November 2022, the IDA deeded 35+/- acres of land and all sewer infrastructure over to the Sewer District at no cost to the District.

2) Back-up Generator:

The wastewater pump station that pumps all wastewater generated at Tryon to the City of Gloversville was operating without a backup generator.  A backup generator would help ensure that the pump station continues to operate if a power outage occurred at Tryon.  In January 2022, the IDA Board hired Environmental Design Partnership to prepare bid documents for purchasing and installing a backup generator.  In April, the IDA Board awarded a contract to Koval Contracting, Waterford, NY to supply and install a new backup generator.  Koval began work in 2022.  The backup generator was delivered in late December 2022.  It should be completed in January 2023.

3) Sewer Infrastructure Map:

In December 2021, the IDA Board hired C.T. Male to prepare a map showing all existing sewer infrastructure at Tryon in anticipation of the IDA deeding over said infrastructure to Fulton County Sewer District No. 4.  This map was completed in 2022 and provided to Sewer District No. 4.

d. Waterline:

An existing waterline that runs from County Road 117 to the elevated tank at Tryon crossed over Lot 2 that was sold to Vireo Health.  This waterline is owned by the Gloversville Water Department.  Vireo Health agreed to relocate and replace this waterline with a new 12” HDPE pipe that was located within the new easement that the IDA granted to the City of Gloversville Board of Water Commissioners.  That resulted in approximately half of the waterline being relocated and replaced.     The Water Department did not have funds to replace the balance of that waterline to the tank.  The estimated cost for this work was $100,000.  The IDA Board agreed to contribute $75,000 towards the cost of replacing this line with Gloversville contributing $25,000.  Gloversville did not have these funds budgeted for 2022.  As such, the IDA agreed to front Gloversville’s share with Gloversville agreeing to repay the IDA over a five (5) year period.  Work on replacing this waterline was completed in 2022 by Cordos Construction, the company constructing Vireo Health’s 324,000 SF building.

e. Former Maintenance Building:

The IDA Board agreed, in April 2021, to sell the 15,000+/- SF former Maintenance Building to Lott Holdings, Amsterdam, NY.  Lott Holdings is renovating this building and plans on leasing this space out.  The closing on this transaction occurred in 2022.  In addition, in 2022, the IDA sold to Lott Holdings a 13+/- acre parcel adjacent to this building

f. Nexus Renewables Project:

In 2021, the IDA Board executed leases with Nexus Renewables for Nexus to construct and operate four (4) community solar facilities on approximately 29+/- acres of IDA-owned land adjacent to the TTP.  The 29+/- acres leased to Nexus was not part of the TTP.  The Leases are for 25 years with three (3) five (5) year options.  The IDA executed leases with four (4) separate LLC’s who will each operate separate solar projects. The IDA will generate annual revenues from each solar project that will financially benefit the IDA’s operations.    Nexus obtained all State approvals in late 2021 and was expected to start construction in 2022.  However, due to inflation, higher construction costs, higher materials cost and high energy prices, Nexus did not start these projects in 2022.  Nexus is hopeful work can commence in 2023.

The IDA Board also approved granting sales tax exemptions to the project.  The documents that need to be executed to provide these exemptions were not executed in 2021 nor 2022.  If the project moves forward, these documents would be executed in 2023.

g. Cushman Wakefield:

Due to its intent to sell all lands at Tryon to Winstanley, the IDA Board did not renew its Agreement with Cushman Wakefield to market the Tryon Technology Park

h. Other:

In 2022, the IDA Board approved the following items for the TTP:

1. 1. Hired James Esper to cut grass.
   2. Leased lands to R & R Farms, Inc. to grow crops.
   3. Hired Adirondack Septic to vacuum tank at wastewater treatment plant.

2. LABOR MARKET ANALYSIS REPORT

In 2014, Fulton County hired DCG Corplan to prepare a Targeted Industry Analysis for the Tryon Technology Park.  A component of that Analysis was the preparation of a Labor Market Analysis Report.  The Report contained key information about the labor market that Tryon is located in.  The Report was completed in March 2015.  The information in this Report is what companies look for when evaluating shovel-ready sites.  The 2015 Labor Market Analysis Report is now 7 years old.  As such, the information in the Report is outdated.  In July 2022, the IDA Board hired DCG Corplan to update the Labor Market Analysis Report.  This update was completed in November 2022.  Copies of the final report were distributed to Winstanley Enterprises and the Fulton County Center for Regional Growth.

3. BENJAMIN MOORE EXPANSION PROJECT:

In 2020, Benjamin Moore advanced plans to expand its latex paint manufacturing plant in the City of Johnstown.  Benjamin Moore proposed to construct a 120,000 sf addition to its existing facility.  The Company applied to the IDA for two (2) financial incentives:

1. Real Property Tax Exemption
2. Sales Tax Exemption

The IDA Board approved these exemptions.  Benjamin Moore commenced work on the Expansion Project in late 2020.  The expansion is expected to be completed by 2023.  The project will create new jobs and property tax revenues for local taxing jurisdictions.

4.  HOFFMAN’S CARWASH PROJECT:

In 2021, Hoffmans Carwash applied to the IDA for real property and sales tax exemptions for a new state-of-the-art carwash project that was proposed to be built in the City of Gloversville.  The IDA Board approved those exemptions.  Construction started in 2021 and was completed in 2022.

5. IDA WEBSITE:

Emery Designs continued work in 2022 updating and revising the IDA’s website.

6. BOARD TRAINING:

In 2022, the IDA Board received training on the following topics:

1. Reviewed Public Authorities Law that requires the IDA to annually prepare five (5) reports:

a. Annual Report:
b. Independent Audit:
c. Investment Report:
d. Procurement Report:
e. Budget Report:

2. Reviewed and Revised the IDA’s Bylaws.
3. Reviewed Real Estate Purchase Options and how they are used.
4. Reviewed and Updated Property Disposition Policy.
5. Reviewed types of projects IDA’s are authorized to participate in which includes:

• Industrial
• Manufacturing
• Warehousing
• Commercial
• Research and recreation facilities
• Industrial pollution control facilities
• Educational or cultural facilities
• Railroad facilities
• Horse racing facilities
• Automobile racing facilities
• Continuing care retirement communities
• Retail: Retail component of total project cost can’t exceed 33%

6. Reviewed and Updated Code of Ethics Policy.
7. Reviewed Requirements, Forms and Procedures used in Granting Sales Tax Exemptions.
8. Reviewed Occupancy in Fulton County’s Four (4) Existing Industrial/Business Parks.

• At present, there are 24 completed buildings in Fulton County’s four (4) industrial/business parks.
• At present, all 24 buildings are occupied and in use.
• There is one (1) new building under construction (Vireo).
• There is one (1) partially completed building (Johnstown Renewables).
• 20 companies currently occupy these buildings.
• Several companies occupy two (2) or more buildings.
• The 20 companies in these four (4) Parks generate over $126,000,000 in assessed valuation. This is equivalent to 1,260 homes assessed at $100,000 each.
• These 20 companies paid over $5 million in property taxes to local taxing jurisdictions in 2022.
• These 20 companies currently employ approximately 2,000 people.

9. Reviewed Requirements and Procedures for Granting Payment In Lieu of Tax Agreement (PILOT’s).
10. Reviewed Discretionary Funds Policy on Use of IDA Funds.
11. Reviewed and completed Annual Board Performance Questionnaire.
12. Reviewed and revised the IDA’s Internal Financial Control System.

7. OTHER:

In 2022, the IDA Board also took the following additional actions:

a. The IDA renewed its Gold Membership with the Fulton County Center for Regional Growth.
b. The IDA Board adopted a 2023 Budget.

The IDA Board appreciates the strong partnership it has with the Fulton County Board of Supervisors and looks forward to continuing that partnership.