IDA may review PILOT deal

JOHNSTOWN — The Fulton County Industrial Development Agency may review its current PILOT agreement involving tax incentives for Johnstown Renewables, a proposed company whose construction was halted, and ended up in court.

IDA Executive Director James Mraz said Monday that his agency continues to keep an eye on Johnstown Renewables.

“We have an active PILOT in place,” Mraz said. “We’re monitoring the situation in hopes the project will be completed.”

If the project isn’t completed or further “defined,” he said the IDA, down the line, will consider several “options,” including termination of its PILOT with the company.

A PILOT stands for Payment In Lieu of Taxes, a typical instrument that IDAs across New York state use as an incentive to entice companies to build in the state.

According to its 2017 annual report, the IDA started 2018 with three active PILOT agreements. They involve these companies: Johnstown Renewables on Enterprise Road at the Johnstown Industrial park, Swany at the Crossroads Industrial Park in Gloversville, and the CG Roxane water bottling plant on Old Sweet Road in the town of Johnstown.

Johnstown Renewables previously requested real estate and sales tax exemptions, as well as a mortgage recording tax exemption. No IDA bond financing was requested.

Johnstown Renewables was being built at the Johnstown Industrial Park.

The project was expected to use whey byproducts from the nearby Fage USA yogurt manufacturer and turn it into useable products such as ethanol and animal feed. The project was expected to create 30 jobs to start. But construction was halted on a 5.4-acre parcel. Workers had been constructing the plant, but Johnstown Renewables shut down construction last spring at its partially-completed 224 Enterprise Road building.

Mayor Vern Jackson said Jan. 16 in his “State of the City” address that Johnstown Renewables has “ceased further development.”

“With the unexpected passing of the main financier and pending legal actions, steps were needed to suspend further work until some sort of resolution is arrived at,” he said.

Mraz said Monday the project may not be dead yet.

“We’re hearing there’s some interest,” the IDA official said. “We’re still hopeful.”

The plant was originally supposed to be up and running by Oct. 31, 2016.

Since then, the project has been marked by unfinished construction and legal action.

Fage USA has filed a $20 million to $50 million breach of contract lawsuit against Johnstown Renewables.

Albany attorney David Cost — on behalf of Johnstown Renewables — filed a $13 million legal counter-action Dec. 1 in state Supreme Court in Johnstown. According to Johnstown Renewables’ counterclaims, Fage entered into a contract on Jan. 1, 2015 with the yogurt firm supplying its materials for 10 years. But Fage knew Johnstown Renewables didn’t have the “physical capacity” to handle Fage’s waste stream, the counterclaim says.

Michael Anich covers Johnstown and Fulton County news. He can be reached at [email protected]

By

Leave a Reply