Of Hotels and Taxes

A week or so ago, the news broke that Redburn Development is seeking a PILOT for the hotel being proposed for 41 Cross Street. An email from a reader asking why a PILOT (payment in lieu of taxes) was being discussed instead of TIF (tax increment financing) suggests that the term PILOT doesn't really reflect what's being requested.

The PILOT schemes being discussed all involve incremental increases in property taxes, which bring the amount paid to 100 percent over the course of ten to twenty years. In one scenario, the amount paid in the first year is 5 percent of the total tax, increasing by 5 percent every year for twenty years until it reaches 100 percent. In another, the percentage of the tax paid is 0 percent in the first year and increases 10 percent each year until it reaches 100 percent in the eleventh year. In another, 50 percent of the tax is paid in the first year, and the percentage increases by 5 percent each year until it reaches 100 in the eleventh year. In each of these plans, the assessment on the property remains the same for twenty years.

The Hudson IDA's initial consideration of a PILOT for Redburn Development took place on Thursday, May 12. They will take up the topic again in a meeting that has been scheduled for Thursday, June 2, at 10 a.m.

On a different subject related to hotels (and B&Bs) and taxes, in September 2015, the Common Council adopted a law enacting a lodging tax in the City of Hudson. The law requires authorization by the New York State Legislature. In February--five months after the Common Council had adopted it--it was discovered that a formal home rule request had never been made, and bills authorizing the tax had not been introduced either in the Senate or the Assembly. 

With just ten days left in the current legislative session, bills have now been introduced in both the Senate (S07790) and the Assembly (A10302) and have been referred to committee. Those interested can track their progress here.
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