PILOT proposed for Potsdam water tower
POTSDAM — Jeda Capital 56 LLC has sent the village a proposed payment-in-lieu-of-taxes agreement, even though it is still facing foreclosure on the water tower parcel for which it hopes to gain property tax relief.
The village accepted a summons this week for a lawsuit filed last month by Community Bank N.A. of Watertown against the municipality, the developer, Lowe's Home Centers and several other businesses.
In the suit, the bank claimed that Jeda Capital has defaulted on the $825,000 loan used to fund construction of the water tower and threatened to foreclose on the property if it is not repaid in full, with interest.
"Nothing has been resolved, as far as I know," Village Administrator Michael D. Weil said of the lawsuit. "Jeda asked about the PILOT, but I don't know where that's going."
The PILOT proposal calls for the developer to be exempt from paying all property taxes on a 1.08-acre parcel containing the tower for five years. Jeda Capital would then pay 50 percent of the taxes owed for the last five years of the 10-year agreement.
The St. Lawrence County Industrial Development Agency worked on the agreement with Michael D. O'Neill, owner of Jeda Capital, who sent a PILOT proposal to the town two weeks ago, but hadn't yet sent copies to St. Lawrence County, the village, Potsdam Central School District or Potsdam Public Library.
"The last I looked, they hadn't paid" property taxes, Mr. Weil said. "He wants the board to vote on the PILOT. It's essentially the same as what he sent the town."
Jeda Capital hasn't made a payment on the Community Bank loan since October. The water tower has been in operation since Oct. 31.
The village still has not started to make its monthly lease payments for use of the water tower, which are supposed to go toward paying off the Community Bank loan. The municipality is waiting for Mr. O'Neill to pay money owed in the project completion agreement first, Mr. Weil said.
The village raised water rates last year to pay for the 20-year, $1.37 million lease agreement for use of the tower. The municipality has a deal with Community Bank to protect its lease agreement for the tower, even if the tower is foreclosed on.
Community Bank's foreclosure action on the water tower would not affect operations in the Lowe's store. The big box retailer purchased the lot where the store sits in May 2008.
