The Lancaster School District wants representation on the Lancaster Industrial Development Agency, which grants tax breaks to attract new companies and jobs to the town and keep the ones it already has.
The school district's desire for a seat on the local IDA's board of directors surfaced Monday night as the School Board continued discussions of an upcoming bid by Tops Markets Inc. to slash the tax assessment on its still-new $65 million distribution center in Lancaster by about 80 percent.
The Town of Lancaster wants the school district to split the $35,000 it is estimated that an appraisal of the Tops property will cost.
"It's time is long past," School Board President Edward Carlsen said of the idea of school officials joining the IDA decision-makers. Tax incentives granted new or expanding businesses affect schools the most because school taxes account for roughly half of all local taxes.
Because there are currently no vacancies on the Lancaster IDA board, Carlsen said the district's best bet may be to push for an expansion.
In previous talks, Lancaster Town Supervisor Robert H. Giza, who also chairs the town IDA, has given no indication that he opposes an expanded IDA board, attorney Robert J. Feldman told the School Board. Feldman is the school district's outside counsel on the Tops assessment matter.
Feldman is recommending that the town and school boards "agree to the sharing of all decision making and strategy decisions in this case, that appraisal fees be shared equally," and that no settlement occur without the approval of both boards.
The School Board took no action Monday night on Feldman's recommendation.
The court fight is the town's legal and financial obligation, but the school district has the most to lose.
Tops' payments in lieu of school taxes on the huge warehouse complex have totaled $182,358 and $196,429 the past two years, about twice what the town received. Next year, the school payment rises to $281,422 -- if the current assessment weathers the court challenge.
Officials say that if Tops wins, the lower assessment will be effective for at least the next three years and be retroactive to the 1997-98 school year, meaning a refund by the school district.
Tops Markets used $65 million as the value of their 867,000-square-foot, state-of-the-art distribution center on Genesee Street near Gunnville Road prior to its opening in 1996. At the time, the cavernous structure was described as large enough to house four Rich stadiums.
Feldman, however, has said that Tops' "contention at trial will be that, regardless of cost of construction, because of the enormous size of the facility, it would be difficult to resell at anything but a substantial loss, and that they are therefore entitled to a substantial assessment reduction."
Tops Markets' 15-year payment-in-lieu-of-tax agreement with Lancaster schools is based on assessments of $45 million on the building and improvements and $1.4 million on the land.
The pact requires Tops to pay 100 percent of the taxes on the land in each of the 15 years, but only 20 percent of taxes on the building and improvements for the first two years; 30 percent in the third and fourth years; 40 percent for the next five years, and 50 percent for the final six years. Next year will see the first increase in taxes on building value, from 20 percent to 30 percent of full taxes.