Chobani haggles with town, school on taxes

Sarah Eames | The Daily Star Rebecca Speno, an attorney representing Chobani in a civil case against the Town of Columbus and the Unadilla Valley Central School District, addresses the judge Friday during proceedings at the Chenango County Courthouse in Norwich. Also pictured, from left to right, are Jeff Lewis, Robert McKurdick and Alan Pope, attorneys representing the town and school district.

NORWICH — A nearly three-year lawsuit between Chobani, the town of Columbus and the Unadilla Valley Central School District may extend into a fourth year if a judge grants an extension requested Friday by the defense.

Chobani is suing both the town and the school district to secure a reduction in the property tax assessment of its 423,000-square-foot Columbus manufacturing plant from $27.4 million to $13.1 million, according to court documents.

Attorneys for the respondents filed a motion Friday in the 6th Judicial District of the New York State Supreme Court to extend the deadline to submit an appraisal of the company’s property from Oct. 30 to Feb. 28.

There are two methodologies for appraising commercial properties, according to Alan Pope, an attorney from Coughlin & Gerhart representing the town of Columbus — a sales comparison method, which measures a property’s value relative to those of sale prices of vacant or formerly vacant shells on the market in other locales, or by calculating the RCN, or replacement cost new value, based on the cost of construction minus depreciation.

Of the two, the RCN methodology is more time-consuming and complicated, Pope said.

Were the extension not granted, “it’s going to leave us — the town, the school district, every taxpayer in the town of Columbus — with less than fair proof on the RCN methodology,” Pope said. “When we boil it all down, we truly need to be able to put our best proof forward, and the only way we can do that is by the two methodologies.”

Columbus Town Supervisor Tom Grace said the property’s initial assessment was agreed upon in a contract signed by both parties five or six years prior allowing the company to submit to the town an annual payment in lieu of taxes, or PILOT.

The PILOT agreement included a provision allowing the company to challenge its assessment value at any time, Grace said. Known as a retention of rights clause, the provision is not standard in PILOT agreements in New York, he said, but was inserted in this case by the Chenango County industrial development agency during initial negotiations.

Grace said the town “didn’t even know it was possible” for Chobani to sue for a reduced assessment under a PILOT agreement, but the retention of rights clause permitted the suit to move forward.

Since 2017, the town has spent nearly a quarter-million dollars and exhausted nearly all its reserves defending the initial assessment in court, Grace said.

Under the PILOT plan, Chobani is already off the hook for more than 50% of what it would otherwise pay in property taxes, according to Grace. In addition to the reduced overall assessment, Grace said, Chobani is also requesting an exemption for its wastewater treatment plant, currently valued at $9 million.

If the company successfully negotiates a reduced assessment, the Unadilla Valley Central School District would be required to retroactively reimburse the company for the difference — about $388,000 — from the time the suit was filed in 2017, according to Superintendent Robert Mackey.

While taxpayers in the town of Columbus would bear the fiscal brunt of a reduced assessment, Mackey said, residents in each of the other nine towns within the district would also be impacted.

“Chobani is one of several employers in our school district,” Mackey said. “As a school district, I like to think we have an excellent working relationship with all of our businesses, including Chobani, and I don’t want to compromise that relationship.”

The company recently settled a similar suit against the town of Norwich and the Norwich City School District and successfully negotiated a reduced assessment for its Twin Falls, Idaho, facility, according to Grace.

“We have taken any pity we can on the assessment entities,” said Rebecca Speno, the Baldwinsville-based attorney representing Chobani. “We understand school — that’s why in July we met with the school district specifically to discuss settlement. The town did not show up.”

Town officials did not feel prepared for the meeting without an RCN estimate, Grace said. Engineers contracted by the town were delayed in gaining access to the plant because the company dragged its feet in responding to a settlement offer put forth by the town several months prior, he said.

“I’m hearing a lot of excuses for procrastination,” Speno said.

Judge Brian Burns, who is presiding over the matter, said he recognized that each party had caused some delay in the proceedings.

“In terms of the delay, this is not one-sided,” Burns said. “It appears from the beginning this was mutual.”

“This is not the first time we’ve had a request for adjournment,” he continued. “By my count, this would be your fifth request for adjournment, and I’ve granted each and every one of them to date. At some point in the very near future, the case has to be trial-ready.”

Burns said he would issue a written decision on the matter in the “very near future.”

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