Potsdam, developer near water tower lease deal
POTSDAM — The village is poised to strike a deal with Lowe's developer Jeda Capital LLC to lease a water tower on the store's Route 56 property.
The village Board of Trustees will vote Monday night on a resolution to approve a 20-year lease with the developer. The deal is very similar to one that fell through in June, when a payment-in-lieu-of-taxes agreement was shot down by town and school officials.
Under the latest agreement, the village will pay $9,407 per month for the first 10 years, for a total of $1.13 million. It would pay $1,000 per month for the next 10 years, for a total of $120,000. The municipality has the option to renew the lease agreement at the lower rate for two five-year extensions.
"This was a hard negotiation, but the village held firm on its price and I think we got an excellent agreement," village Trustee Steven W. Yurgartis said. "We're very pleased."
Jeda Capital has agreed to pay property taxes for the 0.8-acre chunk of land that will house the water tower. Both the Town Council and the Potsdam Central School Board of Education rejected a PILOT deal for the land in June.
"The developer has taken on the burden of taxes. I don't think it's about being a nice guy. I think the developer needs a water tank and there's pressure from Lowe's to get the job done in a timely way," Mr. Yurgartis said. "They felt they could absorb the taxes, but I wouldn't say they're happy about it."
The village would pay for its annual payments by raising water rates 8.5 percent over two years. Officials probably will boost rates by 2 percent in the 2008-09 fiscal year, and hike them an additional 6.5 percent in the 2009-10 fiscal year, but that will be decided during the budget process, village Administrator Michael D. Weil said.
Unlike the previous agreement, the village has no option to purchase the $1.88 million tower. Under the old deal, the municipality would have bought the tower for $10 after 10 years of lease payments.
Mr. Weil visited the Lowe's site on Thursday, and said the foundation has been poured for the water tower, and the metal components are there. In addition to the tower, the developer plans to install 12-inch water lines, pump stations and force mains, he said.
Water lines will connect to the rest of the village system just behind the Ponderosa property on Market Street. The 73-acre Lowe's property was annexed into the village in December.
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.
"This is something we've been looking for since the tank came down in '98. An opportunity presented itself, and I think it's a good one," Mr. Weil said.
