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June 16, 2005
PILOTS for Dummies
(or those who are kinda smart but can hardly believe it's true)
Here's how PILOT financing works in a nutshell: * Ratner's project is declared exempt from property taxes. * A local development corporation (LDC) is set up to issue bonds to finance the construction of Ratner's project. * Property taxes Ratner's project would have generated (if they weren't exempt) go to the PILOT fund instead. * PILOT fund pays back bonds.
An analogy for property owners
Imagine not having to pay property taxes and using that money to pay off your mortgage instead.
PUBLIC SUBSIDY?
NO WAY: Developers and politicians who support their plans emphasize that the bond repayment does not come from the general fund. Furthermore, this investment in the future of the City will generate additional sales and income taxes that will eventually flow into the general fund coffers.
HELL YEAH: Detractors and many good-government watchdogs point out that it's a great deal for the developer (who assumes no risk, unlike regular property-owning folks) that diverts revenue from the general fund. So what if the bucks comes from one account or another? If this project goes forward, it will still means less money for schools, while the City is financing Ratner's plan.
More info:
NY Observer, The Jets vs. Nets: Brooklyn Arena Deal Template for Stadium
Local coverage, City Council legislation to restrict Mayor's control over PILOTs
NY Sun, Flying Solo With PILOTS
Field of Schemes, Nets arena questions and answers (and more questions)
NY Newsday, Scrutiny for stadium funding
The Bond Trader, N.Y. Jets out, PILOTS in?
Pay your property taxes online
While we're on the topic, you can now conveniently pay your property taxes online (http://nycserv.nyc.gov/NYCServInquiry/NYCSERVMain).
Posted by lumi at June 16, 2005 9:23 AM