A tax abatement program aimed at assisting businesses that want to invest in Yorktown has been unanimously approved by the town board. A public hearing on the program was held Feb. 21.
The program, authorized under section 485-b of the New York State Real Property Tax Law, allows businesses that invest in improvements to their commercial, business or industrial property to qualify for a tax break on the increase in the location’s assessed value. The program would allow the businesses to phase-in the increase over a 10-year span.
“We have to be aggressive in Yorktown, because we’re always in competition with other communities,” Yorktown Town Supervisor Michael Grace said. “We’re looking for investments in Yorktown, so we’re doing everything we can to attract that.”
For the first year, the exemption would be 50 percent of the increase in the property’s assessed value attributed to the improvement. That figure would decrease by 5 percent in the next nine years. To receive the exemption, businesses must simply submit a form and provide proof of the improvements — between $10,000 and $50,000 — to the town assessor’s office.
Grace said the exemption will help spur economic revitalization in the town and the rehabilitation of dormant properties, adding that “to get traction, especially in the infant years of a business, you need to have your costs to be low.”
Grace believes the program will help protect small businesses from rises in rent costs that stem from higher real estate taxes that a commercial complex owner would pay following an improvement.
“It should help every strata of commercial businesses, whether big, small or somewhat in between,” Grace said.
According to James Gazzale, assistant public information officer with the state Department of Taxation and Finance, 485-b is an opt-out exemption. Municipalities “opt out” by reducing the offered percentage of the tax exemption to zero. Town Attorney Michael J. McDermott said Yorktown chose to opt out of the program in the early-1990s. Twenty-eight towns, villages and cities in Westchester have also chosen to opt out of the exemption since its creation in 1976, according to New York State, including Rye, Yonkers and White Plains.
Yorktown, which has been mulling the exemption since early 2016, hopes the program will entice new businesses to open up shop in Yorktown. Grace said a number of potential redevelopers have shelved plans to invest in Yorktown because of projected higher real estate tax costs. “This is a way to address that,” he said.
McDermott called the program a “win-win” for the town and the business community.
“In this climate, the economic engine of Yorktown is small business,” he said. “Anything we can do incentivize small business has a growing affection on our area, as well as the local economy.”
However, some residents are concerned the program will have the opposite effect and hinder small-business growth in the town.
“My concern is that the tax incentive without additional guidelines may undermine the competitiveness of small businesses when faced with the arrival of large chains like Lowe’s,” resident Melvyn Tanzman said, referring to the home improvement chain’s plans to construct a new store at 3200 Crompond Road.
“The ordinance as passed gives tax incentives to large projects which were planned without any tax incentives,” added Tanzman, who recently announced his plan to run for town supervisor. “There is no reason to lose this town income when developers of larger projects will proceed without these incentives.”
Yorktown resident Maura Gregory said the board provided no evidence that these tax abatements actually work. “They just reduce the tax base and create a race to the bottom as nearby communities all feel they must do so as well to attract business,” Gregory said of the abatement program. “This increases the burden on everyone else.”