111-117 Bus. Park Realty Corp. v City of Utica Indus. Dev. Agency
Annotate this CaseDecided on June 30, 2006
Supreme Court, Oneida County
111-117 Business Park Realty Corp., Plaintiff,
against
City of Utica Industrial Development Agency and County of Oneida, New York, Defendants.
CA2005-001932
for Plaintiff:Cohen & Cohen LLP
Daniel S. Cohen, Esq., of counsel
258 Genesee Street, Suite 205
Utica, NY 13502
for Defendant County:Oneida County Department of Law
Lawrence A. Sardelli, Esq., of counsel
800 Park Avenue, 10th floor
Utica, NY 13501
Anthony F. Shaheen, J.
This declaratory judgment action arises out of two (2) Payments-In-Lieu-Of-Taxes ["PILOT"] Agreements on properties located at 111 Business Park Drive and 117 Business Park Drive in Utica. The uncontested facts are as follows:
On April 1, 1990, defendant Utica Industrial Development Agency [IDA] entered into two (2) Installment Sales Agreements with Utica Urban Renewal Agency [URA] whereby IDA became the legal owner of the two (2) properties located at 111 and 117 Business Park Drive. Defendant IDA is still the legal owner of these parcels. On September 9, 1999 URA assigned to plaintiff [111-117 Business Park Realty Corp.] all of URA's right, title and interest in these two (2) Installment Sales Agreements, making plaintiff the beneficial owner of these parcels with buildings and improvements at 111 and 117 Business Park Drive. On September 1, 1999 defendant IDA and plaintiff entered into two (2) Payments-In-Lieu-Of-Taxes [PILOT] Agreements, one relating to each property in question, whereby the plaintiff agreed to make [*2]payments in lieu of taxes which would otherwise be due if the parcels at 111 Business Park Drive and 117 Business Park Drive were owned by the corporate-plaintiff instead of by the defendant IDA. Under these PILOT Agreements, defendant IDA caused these properties to be exempt from City, County and School real estate taxes, so long as defendant IDA owns legal title thereto. Under Section 2.02 [C][1] of both PILOT Agreements, it was agreed that plaintiff would make payments to the taxing entities in the amount of $36,000/year for 111 Business Park Drive, and $64,000/year for 117 Business Park Drive. Both PILOT Agreements (Section 2.02 [E]) provide that these annual payments would be allocated among, and paid directly to, each taxing entity in the proportion each would receive if the properties were not tax-exempt; and further provide (Section 2.02 [F]) that defendant IDA would provide each taxing entity with a copy of these Agreements and request that each taxing entity submit periodic statements to plaintiff setting forth the amount and due date of their respective shares of the annual PILOT payment and asking that these periodic statements be sent to plaintiff at the same time that real estate tax bills are mailed. Both PILOT Agreements (Section 2.02 [E]) set forth the specific amount to be paid to each taxing entity and the specific due date for that payment, only for the calendar year 2000; and both Agreements provide that the allocation of payments among the taxing entities shall be adjusted annually effective July 1st each year, based on changes in each taxing entity's tax rates. Specifically, the PILOT Agreements provide that payment for calendar year 2000 shall be made to Oneida County by January 31, 2000, to defendant City of Utica by April 30, 2000, and to Utica School District by October 1, 2000. The PILOT Agreements set forth no date by which the allocable share of the annual PILOT payments are due after calendar year 2000; although, they do provide in Section 2.04 that Plaintiff will pay a late payment penalty and interest to each taxing entity if plaintiff fails to make payment by the date such payment is due.
The issue before the Court now involves only the defendant County of Oneida and the PILOT payments for the years 2000, 2001 and 2003. The plaintiff moves for summary judgment against the defendant County, with a declaration that the plaintiff made timely PILOT payments in those three (3) years.
Plaintiff provides the Court with a chart at page 4 of its affidavit in support of summary judgment, showing the due date for each payment, the statement date for each payment, and the date that plaintiff actually made payment. A careful review of the three (3) years in question reveals that in each of those years, the County never sent the plaintiff a statement of the payment due until well beyond the "due date" recited in the statement, and in each case, the plaintiff made the payment in less than 30 days of the statement-date. Specifically, for calendar year 2000, the County sent a statement to plaintiff on March 5, 2001, indicating that the payment was due five (5) weeks earlier, on January 31, 2001; and plaintiff made that payment 28 days later, on April 2, 2001. For calendar year 2001, the County sent a statement to plaintiff dated March 29, 2001, which was 60 days after the due date of January 31, 2001; and the plaintiff made that payment four (4) days later, on April 2, 2001. Finally, for calendar year 2003, the County sent a statement dated March 10, 2003 which listed a due date 38 days earlier; and the plaintiff made that payment within 21 days of the statement date. [*3]
Reviewing the PILOT Agreements, and specifically Sections 2.02 (e) and (f), the Court finds that the Agreements set a specific "Payment Due Date" for the "twelve month period commencing July 1, 1999;" and contrary to the County's opposition-papers, the Agreements do not state that payments will be due on the same date thereafter for the life of the contract. Rather, Section 2.02 (e) provides that the allocation of payments among the taxing entities will be adjusted annually effective July 1 of each year, based on changes in each entity's tax rates; and Section 2.02 (f) provides that the Industrial Development Agency will give each municipal entity a copy of the PILOT Agreement, together with a request that those taxing officers give plaintiff periodic statements specifying the amount and due dates of the payments due to each municipality, "such periodic statements to be submitted to the Company at approximately the times that tax bills are mailed by such Taxing Entities." It is uncontested that in the three (3) years in question, the County did not provide the plaintiff with statements at the same time that other tax bills were mailed, as required by the PILOT Agreement. Instead, in those three (3) years, the County provided periodic statements to plaintiff which were well after the stated "due date" and in each case the plaintiff made payment in less than 30 days.
The Court does not accept the County's argument that plaintiff had a responsibility to investigate the assessed value and tax rates for each municipal entity for each year in order to ascertain, allocate, and pay the proper annual PILOT payment to the County by January 31st each year. To do so would put the plaintiff at its own peril for the payment of interest, penalties and late fees, if it were to make an error in the computation or the allocation to each municipality; and the County itself admits that it has no obligation to accept less-than-full payments. Individual taxpayers are not expected to place themselves in such peril, and this Court will not impose such an unreasonable burden on the plaintiff. It is interesting to note that the City of Utica also submitted late statements to the plaintiff for two (2) tax years, and with each belated statement, the City apologized for its delay and gave the plaintiff a reasonable time period to make the payment without incurring any penalty.
After careful review of all the facts and circumstances stated, the Court finds and declares that the PILOT Agreements in question require periodic statements showing the amount and due-date, as a condition precedent to making such PILOT payments to the County, and that the plaintiff should have a reasonable time of no less than 30 days after receipt of said periodic statements to make its PILOT payments to the County before interest, penalty and late fees are imposed. The Court further finds and declares that the plaintiff made timely payments for the 3 years in question, and that the County is not entitled to impose interest, penalty or late charges for those payments which were made within 30 days of the statement-date. The County is directed to cash plaintiff's three (3) checks which it has held, or if those checks are no longer negotiable, then the plaintiff is directed to issue three (3) new checks to the County within 5 days of the Order herein, without the inclusion of any interest, penalties or late fees.
For the reasons stated, the plaintiff's motion for summary judgment is granted without costs to either party. This constitutes the Decision of the Court, and plaintiff's counsel is directed to submit an Order for signature with this original Decision appended thereto, after [*4]submitting a copy of same to the County Attorney for his approval as to form.
Dated: June 30, 2006 /s/ Anthony F. Shaheen
ANTHONY F. SHAHEEN, J.S.C.
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