Potsdam resident wonders why no PILOT for Clarkson
To the Editor:
I will apologize in advance for the length of this letter, but the unrest of the citizens of Potsdam warrants it. The citizens are frustrated with 2 school boards, 3 governments, 2 library districts, the assessor, and, at times, even the tax collector. Some argue for shared services, equitable tax distribution, lower assessments, annexation of property to another district, and even complete dissolution of one entire government. Let me build a case for a partial remedy to our frustration.Several months ago, I e-mailed our congressman, Bill Owens. I questioned him as to why Clarkson University is able to take in millions of taxpayer dollars without paying the local coffers a PILOT (Payment in Lieu of Taxes) in return. Mr. Owens thanked me for my letter, but told me that since he is a Federal Representative, he could be of no assistance. Certainly Clarkson has accepted federal money, I thought, but he recommended I write to Ms. Addie Russell and Joe Griffo, our State Representatives.
A brief Google search revealed that in the 09-10 school year, over 11.5 million dollars were given to Clarkson from the Federal Government and 3.5 million came from the State. I realize that much of this money goes to research and development, and inevitably Clarkson is awarded big money contracts for goods and services, both private and government; but some of the money comes to them for building and remodeling-such as the million dollars then Assemblyman Darrel Aubertine secured in 2006 for Walker Arena. The practice of donating tax revenues to private institutions is problematic in that this money is never tracked or audited after it changes hands. Technically, it may be used for anything.
Clarkson has the advantage of being a not-for-profit organization. I used to assume a not-for-profit organization is one which is barely breaking even, or, I would think of it as a charity. In truth, not-for-profit is a tax status in which the entity does not pay out any dividends to its shareholders, or, in this case, its Board of Trustees. It has to reinvest all profits for growth and development. This is why earlier this year the St. Lawrence County IDA (Industrial Development Agency) approved Clarkson’s purchase of $25 million in tax free bonds- which will go toward expanding Woodstock apartments and reviving Moore House. (Having $25 million excess dollars on hand is not your typical not-for-profit institution).
Now that Clarkson has recently partnered with the Beacon River Institute and will house this company in the Old Main Building, they will be able, under legislation sponsored by Ms. Russell and Mr. Griffo, to utilize the NY State Dormitory Authority, which is an agency usually off limits to private colleges. Only municipalities, SUNY schools, and public schools may utilize building and remodeling money from this NY State run department. Clarkson is once again accepting a tax exempt status for its gain.
Clarkson has also been shrinking the Village tax base as well. Their purchase of Sigma Pi in 2009 resulted in its removal from the Village tax base- leaving the citizens to make up for the lost tax revenue. One or two properties may be acceptable- but when this goes unchecked and Clarkson has an exemption on any real estate deal, the Village is bound to suffer.
Clarkson owns approximately 56 properties in Potsdam. Most of these are located on the hill and are for the direct education of the enrolled population. Despite it being a private college, I do not suggest changing its entire exempt status. 3 properties it does pay taxes on (the bookstore downtown, the Clarkson Inn, and Lewis House) all make a profit, and, so, are on the tax rolls.
However, some properties owned by Clarkson should appear on the tax rolls and not be tax exempt: two of these include Riverside Apartments, and Woodstock Apartments (remember the tax exempt bonds?). These properties are private residences that are no different than any other rental properties in the town. Landlords, homeowners, and renters have all been paying Clarkson’s share of property taxes on these complexes for decades.
Another property that is exempt is The President’s house. I cannot come up with an acceptable reason as to why this property is exempt. This house is assessed at 2.85 million dollars. If this were placed on the tax roll, the Village of Potsdam would receive 43,000 dollars, the PCS district would take in 70,000 dollars, and the town and county would see 27,000 dollars. This amounts to approximately $147,000, the cost of less than 4 students’ yearly tuition.
Assessments for the apartment complexes do not exist since they have been tax exempt for years and have not been given a value since the late 80’s. The entire hill campus is one tax map number. If one placed a conservative 1 million on each, one could hypothetically double these numbers.
An interesting aside to this is that when you research St. Lawrence University, you find dozens of properties- houses, land, apartment buildings- that are paying taxes and on the tax roll. I find this baffling.
I have sent a copy of this letter to Assemblywoman Addie Jenne Russell and Senator Joe Griffo and have asked them to reply to this letter. My basic concerns are why these properties are tax exempt and, if there is no reasonable explanation, would they sponsor legislation to place them on the tax roll.
It is time Clarkson makes some difficult decisions- either remain tax exempt by declining public money or continue to accept state revenues but pay property taxes on its private residences.
If you agree with my stance on this topic, I would encourage you to contact your County Legislator.