After more than four years, the town of Lysander and Baldwinsville Central School District (BCSD) have settled an assessment dispute with the Anheuser-Busch (A-B) plant located in Lysander.
“If we hadn’t settled, we would have gone to trial next month,” said Lysander Supervisor Barry Bullis. “Through negotiations, we avoided a lengthy trial.”
“We avoided several hundred thousand dollars in trial costs,” added Jeanne Dangle, superintendent of the Baldwinsville Central School District. “There is a real risk in going to trial. The decision would be left up to a judge. No one knows what that outcome would be.”
A-B first disputed the $96.6 million assessment in 2006, arguing the Lysander brewery was valued at $35 million. When In-Bev negotiations were underway, A-B would not discuss a resolution to the lawsuit with the town or school district, Bullis said, adding that once In-Bev took over, A-B proposed a $55 million assessment, then finally a $75 million, which all sides agreed upon.
“This was the first time they agreed to terms that we could accept,” Bullis said.
Having settled on the $75 million assessment, A-B stipulated the town and school district must enter into “good faith” negotiations to discuss a Payment In Lieu Of Taxes (PILOT) program for the brewery, which employs approximately 800 people. Bullis said a committee would most likely be formed to discuss the potential PILOT and would consist of members representing the Lysander Town Board, Baldwinsville Central School District, Anheuser-Busch and Onondaga County Industrial Development Agency.
“[We’ll] talk to see if there is a common ground we can achieve for a PILOT agreement,” Bullis said.
A-B had a PILOT in place through February of this year, at which point the PILOT expired. A PILOT allows a business to make a lump sum payment towards the municipal and school district tax base. In return, the business receives an exemption on a percentage of its overall assessment and must still pay taxes on the unexempt percentage. For example, in the first five years of a 30-year PILOT, 50 percent of a business’ assessment would be exempt and the business would pay taxes on the remaining 50-percent value. Typically, the exemption percentage decreases over the life of the PILOT, so a business may receive a 40-percent exemption in years five through 10, a 30-percent exemption in years 10 through 15, etc.
“[A-B’s tax] payments steadily increased over the past 10 years as the PILOT weaned down,” Bullis said.
Per the agreement, A-B will receive refunds from taxes collected since the 2006-07 tax year in the following amounts: Baldwinsville Central School District, $2,512,097; Onondaga County, $351,027; Town of Lysander, $140,810; and special districts (Belgium-Cold Springs Fire Department, Radisson Lighting District and Radisson Water Supply District), $146,700. Lysander will pay its portion of the tax refund with funds budgeted for the trial ($70,000) and through an unexpected $70,000, which was received from higher than budgeted mortgage tax revenues (the town received $450,000, but only budgeted to receive $380,000).
“I am pleased that we have come to terms with Anheuser-Busch,” Bullis said. “I hope that Lysander’s willingness to assist our largest employer will mean a continuing long-term relationship with the brewery and help keep them in our community for many years to come.”
The school district refund will come from a reserve the district was required by law to create once the claim against the assessment was made.
A-B, which continued to pay the tax bill until a decision was made (as required by law), also agreed to accept refunds from the town and school district without interest.
Overall, the two entities spent an estimated $1,126,000 in legal fees since 2006 on this dispute. The town spent $420,000, and the district spent $706,360.
“The district was in a position that it must defend itself and our other taxpayers. To make informed decisions, we needed the experts’ opinions to some very complicated issues such as appraisals, types of property, other legal issues,” she said.
According to Dangle, the district risked losing $2.5 million per year in taxes had the plant closed.
“The district entered into this agreement to avoid costly litigation, to keep A-B as a thriving business in our community and to sustain the district’s quality educational programs,” she said.
In a statement issued by Anheuser-Busch, brewery representatives said, “The company and taxing jurisdictions operated in good faith to work through this assessment issue. Avoiding costly litigation and improving the competitive position of the facility is in the best interest of all parties. We look forward to continuing our strong relationship.”
