NOTE: There was a big mistake in the original headline of this post about the amount of property taxes that would be generated over 10 years. The correct number is $4.3 million, not the significantly higher number previously quoted.
Batavia Towne Center, in the four years since the first stores opened there, has generated more than $500,000 in new property tax revenue for schools and county government.
It's also generated more than $500,000 in new fire tax revenue for the Town of Batavia.
We don't know how much sales tax it's generated because those figures are considered confidential. But COR Development estimated -- when it applied to GCEDC in 2006 for tax abatements for the project -- that at build-out, the center would add more than $4.5 million in annual sales tax to the state and county treasuries.
Under the current terms of the agreement between COR and the Genesee County Economic Development Center, Batavia Towne Center will generate an estimated $4.3 million in property tax and fire tax revenue by 2018.
COR is asking that the original agreement be modified to help the company attract Dick's Sporting Goods along with one or two other retailers to the former Lowe's location.
There are three tax abatements under consideration:
$180,000 sales tax exemptions
$43,750 mortgage tax exemption
$828,390 property tax exemption
Before there was a Batavia Towne Center there was 47-acre parcel of land that didn't have much on it except for the Wood Hill Trailer Park off Park Road that -- according to a June 22, 2006 article in the Batavia Daily News -- was filled with aging trailers that once housed race jockeys from Batavia Downs.
The total assessed value in 2008 was $1.6 million.
After Batavia Towne Center opened, the assessed value jumped to $14.5 million.
Under the terms of the original agreement with GCEDC, COR received a $6 million tax incentive package:
$2,078,400 sales tax exemption
$312,500 mortgage tax exemption
$3.6 million property tax exemption
COR was planning a 375,000-square-foot shopping plaza that would be anchored by Target and Lowe's with Bed, Bath & Beyond, PetCo and Michael's, as other key tenants.
It would cost COR an estimated $40 million to build the center.
COR estimated at build-out the stores would employ 364 full-time equivalents (FTEs), who would be paid $9.9 million in annual wages, and the stores would generate $4.6 million in annual sales tax on $667 million in gross annual sales.
In 2007, the project was split into two parts, because Target insist on owning the building and real estate of their own stores, so the benefits and liabilities of the project are now split between COR and Target.
For the life of the agreements, both COR and Target are required to submit an annual report to GCEDC on employment.
By the time all of the stores were open in 2009, COR and Target reported a combined 365 FTEs.
As the economy declined after 2009, so did employment, dropping to 341 FTEs in 2011.
After Lowe's closed, the number of FTEs dropped to 270 in 2012.
The bulk of the incentive package for COR (all numbers in this story roll up COR and Target as if it were still a single project) was the property tax abatement.
The abatement is known as a PILOT (payment in lieu of taxes).
A PILOT is designed to forgive a portion of property taxes on the increased assessed value on a parcel of real estate that are the result of improvements.
In the case of Batavia Towne Center, as stated above, the property's assessment rose from $1.6 million to $14.5 million.
COR continued to pay property taxes on the original $1.6 million assessed value, but in 2010, when the assessed value jumped so dramatically, it paid no property taxes on that additional $12.9 million in assessed value.
Under state law, fire district taxes cannot be waived, so when the assessed value jumped, so did the amount COR pays for fire services in the Town of Batavia. Currently, COR and Target pay more than $266,000 annually in fire protection taxes.
Starting in 2011, COR began paying taxes on 20 percent of the increased assessed value, or on $2.6 million of the new additional assessed value.
This year, COR's share jumps to 40 percent of the assessed value.
By 2017, COR will be paying 80 percent of the increase in assessed value and the PILOT expires in 2019, at which point, COR and Target will be paying property taxes on 100 percent of the increased assessed value, or about $4.1 annual in property taxes.
The bulk of those taxes go to the school district with the rest going to the county. The Town of Batavia currently has a zero property tax rate.
The projected numbers are based on the current assessed value, which is subject to change annually.
For the exemption of the center to accommodate Dick's and other retailers, COR is asking for the PILOT to be amended to cut the taxes on the new assessed value of that portion of the project.
Currently, the portion of the property that contains Lowe's is assessed at $6.9 million.
The improvements will increase the assessment to an estimated $8.6 million.
COR is asking for an amended PILOT just for that parcel that will begin at the 40 percent of increased assessment value and extend the life of the PILOT (just for that parcel) through 2024.
Rather than going up 20 percent every two years, the 40 percent of assessed value would last for three years, then go up to 50 percent for two years, 60 percent for two years, 70 percent for two years and 80 percent for two years.
In 2007, as we reported earlier, the project was only eligible, as a retail project, for tax incentives, because it was declared a "tourist destination."
Under terms of IDA law, a tourist destination is defined as a location that will attract a significant amount of traffic from people living outside of the IDA's service area.
In this case, from outside Genesee County.
The agency also had to find that the project would offer a service not otherwise available to county residents.
In a June 8, 2007 letter, COR's VP and attorney Joseph B. Gerardi, wrote in a letter to Steve Hyde, CEO of GCEDC:
It is anticipated that the Towne Center will provide economic and/or tourism opportunities for commercial uses not otherwise readily available to residents of the Genesee County Economic Development Region. ... The Towne Center project is also anticipated to retain a significant percentage of the retail sales available in the Economic Development Region that is likely to be leaving the Region, and create additional economic development activity. This is a result of the potential for Towne Center to attract retail sales from counties that are in near proximity to the Region and/or development.
Legislature Chairwoman Mary Pat Hancock wrote in a letter dated Jan. 2, 2007:
In order to assist the Agency in making such a finding, the Company has represented that the Project is the sole comparably-sized shopping center available to residents of Genesee County and therefore provides a service that would otherwise be unavailable.
Hancock's letter did not address the "tourism destination" designation.
While the project was in development, GCEDC was apparently interested, according to a February, 2007 article in the Batavia Daily News, in adding a multi-screen theater to the project.
COR seemed less than thrilled with the idea, noting that adding theaters would mean less parking, and theater patrons would take up a lot of parking spaces that would otherwise be filled with store shoppers.
The original project proposal also promised restaurants, but none of have been built in the plaza.
COR also promised to plant $200,000 in trees in the parking area.
It's expected that if GCEDC is to grant new tax incentives to COR for Dick's Sporting Goods and other additional retail space, the project will need to be approved as a "tourism destination" and provide goods and services not otherwise available in Genesee County.
In 2005, while discussing sports retail outlets in Forth Worth, Jeff Hennion, then VP of strategic planning for Dick's Sporting Goods, told the Star-Telegram that Dick's wasn't interested in tax incentives for their stores.
"Our goal is to deliver everything at the lowest price," Hennion said. "We really don't feel like we should be using customers' money to build our stores."
UPDATE: Original site plan map added, courtesy COR Developerment.