Eaton Center buyer offered tax deal

NORWICH – County business leaders approved a payment in lieu of taxes agreement with the buyer of the Eaton Center despite attempts from City of Norwich officials to acquire property taxes over a shorter time period.

Industrial Development Agency directors voted unanimously to offer Pennsylvania businessman Randal Hadeed a 95 percent tax break for the first year to be increased by 10 percent in each of the following nine years. It represents at 50 percent tax savings over the 10-year period. At a rate of around $60 per $1,000 of assessed value, that would garner Hadeed a savings of about $450,000.

The purchase price was set at $1 million. Proceeds from the sale go to the Area Corp., official owners of the building. As PILOT agent, the IDA will receive a one time project fee of about $4,500 and 1 percent of the tax benefit annually.

The 200,000 square foot office building is valued at $1.7 million. (During discussions of the building’s pending sale last month, Chenango County’s economic development leader Maureen Carpenter said the value was $2.3 million. The adjacent Norwich campus of SUNY Morrisville purchased a parking lot since then.)

Procter & Gamble Pharmaceuticals gave the historical headquarters of the Norwich Eaton Pharmaceutical Company to the Chenango Area Corp, a tax exempt entity, back in 1996. The gift included a trust fund to maintain the building and to cover taxes. The Area Corp. proceeded to pay $56,000 a year in county, city and school taxes. Carpenter said payments were halted, however, in 2004 because the Eaton Center had not been profitable. No jurisdictions have been receiving tax revenues on the building since then.

During the IDA’s public hearing Wednesday, city officials presented alternative PILOT agreements that have been used in other counties for consideration. The first would net the city closer to what it used to receive in property taxes sooner, or $15,529 after three years versus $7,764 after three years with the IDA’s plan.