Old cities in the Northeast often have high concentrations of non-profit, tax exempt properties such as universities, hospitals and churches. Cities generally receive the bulk of their revenues through property taxation, so for cities with high concentrations of tax exempt properties the tax base can be considerably diminished. Ryan Delaney of WRVO, a public-radio station in upstate New York, reports that Syracuse has an astonishing 56 percent of city properties exempted from property taxes. Delaney drills down into a current fight over tax exemption for a proposed development project. The fight shows how property-tax exemptions are growing and can be just a mask for private development and profit. From Innovationtrails.org:
The project includes a few steps: Cameron Group would lease a small strip of land in front of an off-campus parking garage from the university for $1. Cameron Group would then spend $20 million to construct a new building that will mostly be filled with a fitness center and bookstore, and offering some space for private retail.
The university would rent out the space for its fitness center and bookstore. At the end of the 30-year tax break, ownership of the building would be transferred to the university, and only the private retail space would be taxed.
Developer Valenti says the only way his firm can offset the costs of the project, while offering low rent to Syracuse University, is if he’s offered a 30-year payment-in-lieu-of-taxes (PILOT).
During those three decades, the developer would pay 17 percent of the assessed taxes – enough to foot the bill for fire, police and public works costs, according to the Syracuse Industrial Development Agency (SIDA).