Jim LaValley's Response to Comments on The Blog

Good article two-part in the Adirondack Daily Enterprise Saturday and today.

Excerpt from the 2-part article:

"The resort has had people questioning its scope and potential impacts since the idea was introduced in 2004. In 2007, the APA board decided to examine it in detail, naming 10 issues that should be examined in greater detail in an adjudicatory hearing.

The hearing was stalled, however, just as it was getting started, and progress has been crawling at a snail's pace for the last few years.

Now things are starting to pick up. Developers submitted revised application materials at the end of June, and a pre-hearing conference is scheduled for Wednesday to work out several topics, including which of the issues are still necessary to discuss."

If you are interested in this debate, it's very helpful to see the positions on these issues laid out clearly. See the Part 1 and Part 2 links below for the complete article.

Part 1

Issue 1: Layout of great camps on Resource Management lands

Issue 2: Orvis Shooting School

Issue 3: High-elevation housing

Issue 4: Lake Simond Road sewage treatment plant

Issue 5: Fiscal impact and municipal services


Part 2

Issue 6 - Public benefits and burdens

Issue 7 - Forest Preserve state facilities use and impacts

Issue 8 - Wetlands

Issue 9 - Stormwater management

Issue 10 - Permit and condition compliance

From the article

".....that it's common to use outflow from a sewage plant to make snow. "

OH! That explains crappy snowmaking at some resorts.

http://www.doi.gov/pilt/summary.html
"Payments in Lieu of Taxes" (or PILT) are Federal payments to local governments that help offset losses in property taxes due to nontaxable Federal lands within their boundaries. The key law that implements the payments is Public Law 94-565, dated October 20, 1976. This law was rewritten and amended by Public Law 97-258 on September 13, 1982 and codified at Chapter 69, Title 31 of the United States Code. The Law recognizes that the inability of local governments to collect property taxes on Federally-owned land can create a financial impact.

PILT payments help local governments carry out such vital services as firefighting and police protection, construction of public schools and roads, and search-and-rescue operations. The payments are made annually for tax-exempt Federal lands administered by the BLM, the National Park Service, the U.S. Fish and Wildlife Service (all agencies of the Interior Department), the U.S. Forest service (part of the U.S. Department of Agriculture), and for Federal water projects and some military installations. PILT payments are one of the ways that the Federal government can fulfill its role of being a good neighbor to local communities.

The Department of the Interior's (DOI) Office of the Secretary has administrative authority over the PILT program. In addition to other responsibilities, DOI will calculate payments according to the formulas established by law and distribute the funds appropriated by Congress. Applicable DOI regulations pertaining to the PILT program were published as a final rule in the Federal Register on December 7, 2004.

The formula used to compute the payments is contained in the PILT Act and is based on population, receipt sharing payments, and the amount of Federal land within an affected county. PILT payments are in addition to other Federal revenues (such as oil and gas leasing, livestock grazing, and timber harvesting) that the Federal Government transfers to the States. The DOI has distributed more than $5.1 billion dollars in PILT payments (on average, $152 million annually) to each State (except Rhode Island) plus the District of Columbia, Puerto Rico, Guam, and the Virgin Islands since these payments began in 1977.

http://pressrepublican.com/breaking2/x1047882582/Tupper-Lake-project-projected-to-create-584-jobs
"To build it, developers would borrow money through a funding plan put together by Franklin County Industrial Development Authority.  IDA Director John Tubbs took a good deal of time at the meeting explaining how a payment-in-lieu-of-taxes program works.  The IDA would take a controlling interest in the property by lease and by deed, he said.
"And that act creates a tax exemption."  But, Tubbs said, the IDA would create a PILOT paid to the Franklin County treasurer for distribution to municipalities.  "(Payment in lieu of taxes) would be paid at the same proportion as if they were taxes," Tubbs said.  It is very much like any homeowner getting a mortgage."

caligal wrote

But, Tubbs said, the IDA would create a PILOT paid to the Franklin County treasurer for distribution to municipalities.  "(Payment in lieu of taxes) would be paid at the same proportion as if they were taxes," Tubbs said.  It is very much like any homeowner getting a mortgage."

Is That Right? Sooooooo, how is the loan repaid then? How can there be enough money to pay the taxes in full AND repay the loan? That does not add up and therefore is not credible. What if a partial loan is made to start the project and then no work is done and/or no homes sold? Who makes the payments on the loan then? Who pays the taxes then? What if the developer goes bankrupt? Who repays the loan then? (hint:Taxpayers) Don't say it couldn't happen.

From the very beginning we've been told this developement will be financed by a PILOT- Payment IN LIEU of Taxes...Well Duh! " In lieu of " means.... instead of, in place of...AKA there'll be no taxes paid for the duration of the loan!!! Why you people trying to BS your way around that?

Now Caligal comes along and says Pilot is a Federal payment for NONTAXABLE military, forest land, yada, yada. Does she think this Developement will be nontaxable?! That is so far off base, so far out in left field, so far away from what the local politicians and the Developer have been saying that it reaffirms the Nation's belief that California has the best nuts.

It could be millions of dollars are loaned to start the project and no homes are sold for years or even ever to make any of the loan payments. Who makes the loan payments in that event? Don't say it couldn't happen, that happens all the time with these projects. Usually it's on the Developer's dime, not the taxpayer's millions.

" The IDA would take a controlling interest in the property by lease and by deed, he said. "

That sounds like the IDA is a co-signer, with equal obligations should there be a default. This whole thing smacks of smoke and mirrors while gambling with millions of dollars of the local taxpayer's money, money they can ill afford to lose.

IT'S REAL SIMPLE.... If this is such a great project with a legitimate Developer.....Why is he not doing it with his own financing? That's standard operating procedure. Likely, he can't get the financing on his own so he needs the IDA/taxpayers.

The Industrial Developement Authority is just that, Industrial, designed to help businesses who COMMIT to coming to town, not contingent on future sales. Nobody says, " Lend me money to construct a business building and if I get enough sales I will come to your town and operate that business."

The people of Tupper lake should tell the Developer to use His own PILOT program, use His own - Personal Income Leaving Out Taxmoney!!!

Snowballs - appreciate your on-going interest in the Adirondack Club debate.  It has been a while since I checked in, so I was happy to see the various comments since the last time.  Regarding the PILOT - first, there is no taxpayer risk.  The risk falls wholly on those that purchase the bonds.  The people who buy into the project will not see any discount on their taxes.  From their standpoint, they will be paying at the same rate as any other taxpayer in the community.    Second, the only thing that is certain about the PILOT and the ACR is that they are eligible.  Nothing further has been decided, negotiated, or confirmed.  Third, the ACR is not asking for anything that is not allowed by law.  Fourth, even with the PILOT the taxing entities will realize substantially more tax revenue then they do now.  Finally, allow the process to take place before casting stones.  There are numerous layers of regulators (even at the local level), that are carefully reviewing every word in the project sponsor's application.  I trust the PILOT issue will receive careful review by them and all of the taxing entities.

A few quick questions for Jim LaValley . Why is an A.R.I.S.E. guy explaining A.C.R. business ? Why a P.I.L.O.T. instead of regular financing ? How much of Foxman's , Lawson's , etc . personal money is involved in financing THEIR project ?

Snowballs,  Sounds like you have a good understanding of the PILOT and the developers inability to get financing through regular channels. the developers take on a failure of the project part way through is that there would be a flood of other buyers out there eager to buy up the remains  and make a killing. This is the same developer who has increased his projected sale prices for the properties anywhere from 20 to 100% since his original projected sale prices in 2005. And I did some checking on other posters data. Yes, according to the franklin county clerk, Mr Lawson is behing on his taxes on his properties in Tupper Lake.  Per the Plattsburgh Press Republican 7/18/09: "Records from the Franklin County Treasurers Office show unpaid taxes from 2007, 2008 and 2009 on four Big Tupper LLC parcels totalled $149,553. " In the same article, " The program was designed to accommodate people struggling with job loss, layoffs, health issues and other financial challenges." Is this the kind of developers we need?   I dont think so. As far as JLVs Response to comments on the Blog, Very interesting. His statement regarding Great Camp infratructure, "their location has municipal water and sewer more readily available" is blatantly false. There are currently no GC lots that have municipal water anywhere near them and only 2 GC lots on Lake Simond Rd that have municipal sewer available. I've really lost respect for Jim L,  I thought he had better judgement than getting involved with these guys. But I guess he's really been drinking the Koolaid.

WhoReallyKnows wrote

A few quick questions for Jim LaValley . Why is an A.R.I.S.E. guy explaining A.C.R. business ? Why a P.I.L.O.T. instead of regular financing ? How much of Foxman's , Lawson's , etc . personal money is involved in financing THEIR project ?

1) Why is an A.R.I.S.E. guy explaining A.C.R. business ?

Because it's THE way to avoid answering pertinent questions like....Why were your property taxes in Tupper Lake unpaid for 3 going on 4 years? Why were the utilities shut off on some properties? When will you get these long over due bills current? and so on. Indeed, it appears the IDA has either chose to ignore these financial red flags or has not properly vetted this Developer. Additionally, by having someone else explain ACR business, the developer maintains Plausible Deniablity, meaning if push come to shove, he can always reply " I never said xyz ". He seeks to avoid saying anything " on the record " ..plausible deniablity....viscosity!

2) Why a P.I.L.O.T. instead of regular financing ?

He probably doesn't have the money, couldn't even pay the taxes on TL properties he owns. What bank would lend millions to a Developer like that? Especially for a Loooong shot project like this one. PILOT puts other people's money on the hook, not his! The " In Lieu of Taxes " part of a PILOT loan also eases the local tax burden on the developement for years! Quite a windfall.

3) How much of Foxman's , Lawson's , etc . personal money is involved in financing THEIR project ? Good question. Why does he even seek a Pilot loan? Why doesn't he use his own financing like most other Developers? There has to be some benefit for him, some angle.


I invite the Developers themselves to come on here and tell where/if i'm wrong. I may be, but let's hear it from them, not some underlings full of vague answers. These questions posted here are reasonable and simple ones that a valid businessman could easily answer.

Background reading....Pilot deals that lead to lost property taxes

http://www.nydailynews.com/money/2007/12/20/2007-12-20_deals_that_lead_to_lost_property_taxes.html