Plattsburgh lawyers up in tax dispute with Plattsburgh Town

PLATTSBURGH, N.Y. (WCAX) A fight between the city and town of Plattsburgh is heating up.

In the 1990s, a power company called Falcon Seaboard built a plant on land owned by the Clinton County Industrial Development Agency. The company promised to make payments in lieu of taxes -- so-called PILOT payments. But now that deal is dividing the city and town, and politicians and lawyers are getting involved.

The City of Plattsburgh says it was expecting hundreds of thousands of dollars a year in PILOT revenues from that property and the power plant that sits on it. But the city is not getting the money and has now hired a lawyer to find out why.

"From 1992 on the city was expected to get up to $850,000 a year," said Plattsburgh Mayor Colin Read. But in 2009, Falcon Seaboard sold the plant to Saranac Power. That's when the PILOT payments to the city, town, county, and school district started to drop off. The value of the land went down, and so did the value of Saranac Power.

"The facility was originally assessed at $200 million. It went down to about $32 million -- that's a significant decrease. The energy market has changed significantly," said Plattsburgh Town Supervisior Michael Cashman.

So the Town of Plattsburgh quickly struck a new agreement with Saranac Power to pay for so-called special districts that respond to the plant in an emergency. "The city has continuously received two thirds of the PILOT money that was negotiated. This other agreement was separate for the special districts," Cashman said.

The Town says that side deal had no impact on the city's PILOT payments. Mayor Read is not so sure. He says the city's payments from Saranac Power are shrinking faster than payments to the town. So Mayor Read hired a lawyer -- Bill Owens. The former democratic Congressman is now being paid to follow the money. "We have filed something that is known as a notice of claim, which must be filed in actions against municipalities, and or New York State," Owens said.

"The town's position is we feel that that's rather unfortunate at this point," Cashman said. "I've made a number of attempts to the mayor to hopefully sit down shoulder to shoulder to review the materials."

But Owens instructed Mayor Read to not meet with Plattsburgh Town officials. "Thats one of the reason there hasn't been a meeting -- because our recommendation to our client was not to meet until you knew the fact," Owens said.

Owens says he just received all the paperwork about the agreement from the town Tuesday. Now he says he will review it and meet with the town in a couple of weeks. "We'll have a better idea of where we stand at that point," he said.

Owens says this process could take years and there is no guarantee it won't result in a lawsuit.