Assistance and Incentives

Real Property Tax Abatement - PILOT

Real Property Tax Abatement (PILOT)
The Town of Bethlehem IDA offers real property tax abatements on enhancements to a property that results in an increase in the property assessment by the taxing jurisdiction (County, Town and School District). The IDA PILOT (Payment In Lieu of Taxes) consists of an agreed- upon percentage of the improvements that would be otherwise due on the property if the project was completed without IDA tax abatements. The IDA offers a Standard and an Enhanced Abatement and each are awarded on a case-by-case basis.

The Standard Abatement commences at 50% of the increase in assessed valuation resulting from a project and then declines by 5% per year for a ten year period. This abatement is designed for projects that are eligible for IDA assistance and meet a standard level of economic impact including, job creation, business development and tax generation. This program provides abatement for the Town, County and School District taxes throughout the Town.

The Enhanced Abatement is designed to enhance the regional competitive position of the Town in attracting high quality business development that meets very specific economic benefit criteria.

To be eligible for the enhanced abatement, an applicant must demonstrate the project’s ability to substantially meet the following criteria:

  • Extraordinary new job creation and capital investment
  • Net new business investment in the Capital Region
  • Reuse or redevelopment of abandoned or underutilized real estate
  • Consistency with the Town’s comprehensive plan recommendations
  • Market penetration: potential for catalytic effect for subsequent projects
  • Consistency with regional target industries
  • Business development that promotes diversification
Year Standard Abatement Enhanced Abatement
1 50% 100%
2 45% 100%
3 40% 90%
4 35% 80%
5 30% 70%
6 25% 60%
7 20% 50%
8 15% 40%
9 10% 30%
10 5% 20%
11 0% 10%
12 0% 0%


  • Read more about the Real Property Tax Abatement - PILOT

    General
    Pursuant to section 874 of the act and Section 412-a of the Real Property Tax Law, property owned by or under the jurisdiction or supervision or control of the IDA is exempt from general real estate taxes (but not exempt from special assessments and special ad valorem levies). However, it is the general policy of the IDA that, notwithstanding the foregoing, every non-governmental project will be required to enter into a payment in lieu of tax agreement (a “PILOT Agreement”), either separately or as part of the project documents. Such PILOT Agreement shall require payment of PILOT payments in accordance with the provisions set forth below.

    PILOT Requirements

    Unless the applicant and/or project occupant and the IDA shall have entered into a pilot Agreement acceptable to the IDA, the project documents shall provide that the applicant and/or the project occupant shall be required to make PILOT payments in such amounts as would result from taxes being levied on the project by the taxing jurisdictions if the project were not owned by or under the jurisdiction or supervision or control of the IDA. The project documents shall provide that, if the IDA and the applicant and/or project occupant have entered into a PILOT Agreement, the terms of the PILOT Agreement shall control the amount of PILOT payments until the expiration or sooner termination of such agreement.

    Property Tax Abatements

    The IDA offers a Standard and an Enhanced Abatement and each are awarded on a case-by-case basis.

    The Standard Abatement commences at 50% of the increase in assessed valuation resulting from a project and then declines by 5% per year for a ten year period. This abatement is designed for projects that are eligible for IDA assistance and meet a standard level of economic impact including job creation, business development and tax generation. This abatement program provides abatement against the Town, County and School District taxes throughout the Town.

    The Standard Abatement Schedule is as follows:

    Year % Abatement
    1 50%
    2 45%
    3 40%
    4 35%
    5 30%
    6 25%
    7 20%
    8 15%
    9 10%
    10 5%
    11 0%
    12 0%


    The Enhanced Abatement is designed to enhance the regional competitive position of the Town in attracting high quality business development that meets very specific economic benefit criteria. The Enhanced Abatement schedule is as follows:

    Year % Abatement
    1 100%
    2 100%
    3 90%
    4 80%
    5 70%
    6 60%
    7 50%
    8 40%
    9 30%
    10 20%
    11 10%
    12 0%



    As with all IDA PILOT programs, the abatement is against the increase in assessed valuation resulting from the completion of the project. It also assumes that the abatement program begins after the completion of construction and a Certificate of Occupancy (CO) has been issued for the project.

    A separate application will be used for the Enhanced Abatement program. To be eligible for the enhanced abatement, an applicant must demonstrate the project’s ability to substantially meet the following criteria:

    • Extraordinary new job creation or capital investment
    • Net new business investment in the Capital Region
    • Reuse or redevelopment of abandoned or underutilized real estate
    • Consistency with the Town’s comprehensive plan recommendations
    • Market penetration; potential for catalytic effect for subsequent projects
    • Consistency with regional target industries
    • Business development that promotes economic diversification

    In addition, applicants will be required to submit an economic impact analysis in a form that is acceptable to the BIDA that demonstrates the project’s economic benefits based on the enhanced abatement schedule. In addition, the application should include information that demonstrates the applicant’s relevant experience in undertaking similar projects, as well as their credit worthiness and financial strength. Also, applicants will be required to indicate that in the absence of the enhanced abatement incentive, the project will not proceed.

    Special District Taxes

    As indicated above, the IDA is not exempt from special assessments and special ad valorem levies, and accordingly these amounts are not subject to abatement by reason of ownership of the Project by the IDA. The PILOT Agreement shall make this clear and shall require that all such amounts be directly paid by the applicant and/or project occupant.

    Payee

    Unless otherwise determined by resolution of the IDA, all PILOT payments payable to an affected tax jurisdiction shall be assessed, billed and collected directly by the same officials which assess, bill and collect normal taxes levied by such affected tax jurisdiction. Pursuant to section 874(3) of the Act, such PILOT payments shall be remitted to each affected tax jurisdiction within thirty (30) days of receipt.

    Enforcement

    An affected tax jurisdiction which has not received a PILOT payment due to it under a PILOT Agreement may exercise its remedies under Section 874(6) of the Act. In addition, such affected tax jurisdiction may petition the IDA to exercise whatever remedies that the IDA may have under project documents to enforce payment and, if such affected tax jurisdiction indemnifies the IDA and agrees to pay the IDA’s costs incurred in connection therewith, the IDA may take action to enforce the PILOT Agreement,

    Recapture of Tax Exemptions

    If the IDA's approval of a project is predicated upon achievement by the project of certain minimum goals such as minimum employment levels, the PILOT Agreement may provide that the tax exemptions granted to the project will be reduced, eliminated or re-captured if, in the sole judgment of the IDA, the project fails to achieve such minimum goals.,

    Required Filings

    As indicated in above, no real estate tax exemption with respect to a particular project shall be effective until an exemption form is filed with the assessor of each county, city, town, village and school district in which project is located (each, a “Taxing Jurisdiction”). Once an exemption form with respect to a particular project is filed with a particular Taxing Jurisdiction, the real property tax exemption for such project does not take effect until (1) a tax status date for such Taxing Jurisdiction occurs subsequent to such filing, (2) an assessment roll for such Taxing Jurisdiction is finalized subsequent to such tax status date, (3) such assessment roll becomes the basis for the preparation of a tax roll for such Taxing Jurisdiction, and (4) the tax year to which such tax roll relates commences.

    Appraisals

    Since the policy of the IDA is to base the value of a project for payment in lieu of tax purposes on a valuation of such project performed by the Assessor of the applicable Taxing Jurisdiction, normally a separate real property appraisal is not required. However, the IDA may require the submission of a real property appraisal if (1) the assessor of any particular Taxing Jurisdiction requires one or (2) if the valuation of the project for payment in lieu of tax purposes is based on a value determined by the applicant or by someone acting on behalf of the applicant, rather than by an assessor for a Taxing Jurisdiction or by the IDA. If the IDA requires the submission of a real property appraisal, such appraisal shall be prepared by an independent MAI certified appraiser acceptable to the IDA.

    To learn more about the Real Property Tax Abatements and if your business and project would qualify please contact:  Elizabeth Staubach, Economic Development Coordinator at 518-439-4955 ext. 1189 or estaubach@townofbethlehem.org.