Village officials recently passed NY RPT Law 485-A, which allows an eight-year exemption on property taxes (plus four additional years of reduced taxes on a sliding scale) for improvements made to the residential portion of a mixed-use property. The law is designed to revitalize development in urban areas and does not affect the taxpayer because without the potential investment and improvement, there are limited taxes to collect.
“Property taxes are high in New York State,” said Mayor Joseph Saraceni. “This law would encourage property owners to invest in their property without fear of property taxes, which would give them time to find tenants for the renovated space.”
This law would benefit businesses with multiple floors of property like Pizza Man, which operates a restaurant and pub on the main floor, then has three floors of empty space that could potentially be renovated into condos. However, investing money to develop those three floors is a big risk, especially if they remain empty for an extended period of time once completed.
“People get whacked with property taxes if they don’t find a tenant in time,” Saraceni said. “With this law, no one loses anything. Municipalities just don’t start receiving property taxes until the eight years are up.”
Property owners taking advantage of this exemption would continue to pay the entire tax bill for their commercial property, as well as any residential portion that has already been developed.
This law follows Smart Growth Planning, a concept the village and county practice.
“All this does is stimulate redevelopment,” Saraceni said. “We want more density downtown – more people shopping locally, traveling along our sidewalks.”
Baldwinsville is the first village in Onondaga County to pass this legislation. However, for investors to receive the full benefit of the law, all taxing entities within an area must pass it. So far, Onondaga County and the village have adopted the law.
Van Buren Supervisor Claude Sykes said the town is considering this exemption and officials are awaiting recommendations from the town’s planning and zoning boards.
“This is different than most exemptions in that this is for improvements and the relief is on something new that was never previously taxed, where other exemptions are for existing circumstances and someone else has to make up the amount deferred to the exemption,” Sykes said. “In other words you don’t miss anything you never had.”
Sykes said recommendations from the boards are expected within a month.
Lysander Supervisor John Salisbury said he is also interested in the program and presented it to the board this month during a work session.
Should the towns decide to pass the law, it would mean, “Baldwinsville is open for business,” Saraceni said. “This will open the flood gate for mixed use properties in the village.”
NY RPT Law 485-A details
The law states “an eligible conversion must have a cost in excess of $10,000” and “exemption does not apply to ordinary maintenance and repairs.” The exemption base is the increase in assessed value attributable to the improvements. For the first eight years, the property would be 100 percent exempt from taxes for the assessed value of improvements. At nine years, the property would be 80 percent exempt; 10 years, 60 percent exempt; 11 years, 40 percent exempt; 12 years, 20 percent exempt; and at 13 years, the property owner would pay taxes on the full assessed value of the entire property.
For more information about the law, visit the village web site at baldwinsville.org.
