POTSDAM — The village still hopes to enlist the help of the developer of the Lowe's store in building a water tower, even though a payment-in-lieu-of-taxes agreement important to the deal fell through earlier this month.
Village officials are working on a different deal for building and financing the $1.88 million tower with Jeda Capital LLC.
They hope to have options to choose from by the end of the week, Trustee Steven W. Yurgartis said.
The Town Council on June 18 voted to reject a PILOT agreement sponsored by the St. Lawrence County Industrial Development Agency, which would have saved Lowe's developer from paying property taxes on the 0.8-acre chunk of land slated for the water tower.
The Potsdam Central School Board of Education voted June 16 to rescind its approval of the PILOT agreement, and tabled the matter.
"There didn't appear to be support, so we have asked the county IDA to abandon it, and we'll figure something else out," village Administrator Michael D. Weil said.
Mr. Weil said he and other village officials have been working on the deal every day.
"We hope it's not a dealbreaker because we still believe the tower is an excellent opportunity for the village," Mr. Yurgartis said. "So we are looking for a Plan B to try to make that happen in a cost-effective way for village taxpayers."
For its part, the village Board of Trustees already has voted to enter into a 10-year lease agreement with Jeda Capital LLC, the home improvement store's developer, to purchase the water tower.
Without the PILOT agreement, that deal has yet to be finalized, and the village may have to kick in more money.
"I don't know how it's going to happen, but we're going to build a tower," Mr. Weil said. "It's too important to walk away from. This is too big a benefit to the community."
Although Jeda Capital was required only to build an aboveground water tank to provide fire protection for the big box home improvement store, the developer agreed to erect a water tower that the village would purchase later.
"Lowe's is in the home improvement business, not the water and sewer business. They don't want to be in the water and sewer business any more than Wal-Mart did," Mr. Weil said. "If they can get someone else taking care of it for them, that's good for them."
The village plans to lease the tower from Lowe's over 10 years for $825,000, plus interest. The village would finance the $109,000 annual payments by raising water rates 8.5 percent over two years. Water rates would rise 2 percent in the 2008-09 fiscal year, and 6.5 percent in the 2009-10 fiscal year.
After the 10-year lease is up, Lowe's would sell the water tower to the village for $10.
Lowe's has started site work at its 73-acre Route 56 property, including on the water tower's foundation, Mr. Weil said.
Michael D. O'Neill of Jeda Capital has said it would cost the firm slightly more to build the tower for the village. Mr. Weil estimated the deal could save the village as much as $1 million, compared with building the tower on its own.
"I don't think it's a wash for Lowe's," Mr. Weil said. "They're paying money to be in the community. They're providing a community benefit to be here."
The village demolished its Cedar Street water tower in 1998. It uses only its 1.5-million-gallon water tank on the Clarkson University hill campus. The municipality has listed the need for a water tower in the last two versions of its comprehensive plan.
"A water tower is needed. There's no doubt about that," Mr. Yurgartis said. "We don't like to see rates go up, but water is necessary and it takes money to build and maintain a tower."
