Middleburgh Meadows Still Producing Revenue for School Until Units are Sold

MIDDLEBURGH - Though units in the Middleburgh Meadows projects remain unsold, the project is still generating income for the school district and the other local municipalities.

For the Middleburgh school district, the 2025-26 school year is year nine of a 15-year "payment in lieu of taxes" program. Under the PILOT program, the developers still have to make payments on any constructed but unsold units. In addition to the school district, the village, town, and county also receive yearly PILOT payments.

MCS school business administrator Robyn Bhend told school board members at their February 12 meeting that the PILOT is a formula-driven and can vary slightly each year but the actual amount determined by number of unoccupied units ready for sale, $2,000 per unit for each unit “constructed but not sold."

Once units are sold, they  become part of school tax base and are no longer part of the PILOT calculation, Ms. Bhend noted. The more built but remain unsold, the greater the PILOT amount, she added.

She outlined the PILOT payments for the past few years.

Payments made past two years plus: estimated: 2023-24 school year: $19,110 (year seven – estimated three units, actual six units); 2024-25 school year: $15,697 (year eight – estimated six units, actual two units); and 2025-26 school year: $16,653 (year nine – estimating two units, which is an anticipated according to the Schoharie County IDA.

For the current school year, Ms. Robyn Bhend reported that the district anticipated to receive $20,065.50 from the PILOT with the assumption that six units at Middleburgh Meadows would be 'constructed but unsold' on September 1.

In February 2023, district officials were told that the district received $18,154 in PILOT payments for the 2022-23 school year while the estimated payment was $46,546. 

The PILOT agreement was approved by the town, village, school, and county before construction began and was extended in 2021 when the plans changed for the design of the original townhouse-type building to separate, smaller, one-family structures.

Though the plans have physically changed from condos to small single-family homes, they were still classified as condos which meant that the village, town, county and school did not see as much revenue as expected. Under state law, the assessment on condos are less than single-family homes, which in the end, will cost the municipalities money.

Local municipalities adopted a "condo surprise law" in 2022 to prevent further tax breaks for condos in the future.

The PILOT agreement allows a gradual increase in revenue in a payment schedule instead of the owner/developer paying the full assessed amount in taxes. The PILOT for Middleburgh Meadows is based on the number of units sold. When the units are sold, they will be taxed according to their full assessed value.