City Sues Town Over Disputed PILOT Payments

Mar 14, 2018

Relations between the city of Plattsburgh and the town of Plattsburgh have worsened. The city of Plattsburgh on Tuesday filed suit against the adjacent town, claiming that a Payment in Lieu of Taxes agreement has been violated and the city is owed more than a million dollars.

In December, Plattsburgh Mayor Colin Read was caught on an open mic discussing with a city councilor his concerns about a PILOT, or Payment In Lieu Of Taxes, agreement, with the Town of Plattsburgh based on a 1992 agreement regarding property now owned by Falcon Seaboard.  “We think that the town has been holding back a sum that could be into the seven figures that the city really deserves. You know like could be as high as $10 million that they’ve tricked us out of.  And we don’t know if it’s recoverable or not, but we’re obviously upset.”  

The mayor submitted a FOIA request for documents and retained a private law firm to try to determine why the city’s share of payments declined substantially around 2009.  On TUESDAY the city filed suit against the town. In a press release, the mayor says that the analysis by the attorneys “…gave greater reason to believe that the Town may owe the City additional sums as part of the 1992 revenue sharing agreement.” Mayor Read is referring all calls to the law firm retained by the city.  Attorney Bill Owens, a former Congressman and regular commentator for WAMC, explains that the city had filed a notice of claim in January and had four months to file a subsequent complaint.  “In the complaint we recite portions of a memo that indicates that as the PILOT payment came down they essentially made an arrangement to shift what was PILOT payment money into the special assessment districts.  And we believe that that action constituted a breach of contract and defrauded the city taxpayers in the process.”

Town of Plattsburgh Supervisor Michael Cashman is livid about the lawsuit. He notes that the city continues to receive shared tax payments on property that is not located within the city’s taxing jurisdiction.  “I was the first person even after the hot mic situation to say we need to have a conversation as colleagues.  Mayor Read accepted and then he pivoted.  Everybody that the town has engaged, including Jim Coffey our town attorney and our special counsel, Mr. Gray out of Albany, their interpretation is the town has done nothing wrong.”  

While Clinton County is not affected by the legal wrangling, Legislative Deputy Chair Area 10 Democrat Bobby Hall, who represents part of the city, calls the lawsuit ridiculous.  “What is going to happen is is there is going to be so much legal fees and lawyer fees and court costs that there’s not going to be a winner in this at all. The city of Plattsburgh is in very very bad financial shape. A lawsuit over Falcon Seaboard is not the answer. I do not even know who is right and who is wrong because it happened so long ago. But this is not the way to go.”

Bill Owens notes that their analysis indicates the city has lost $1.5 million dollars, but the figure is likely to increase because it is an ongoing arrangement.

The Town of Plattsburgh has 20 days to respond to the litigation.