MONTICELLO – The County of Sullivan Industrial Development Agency (IDA) meeting on Monday, February 9, had a special guest in attendance: Monticello Central School District Superintendent Dr. Matthew Evans, who was there to represent his school district after the IDA had announced its plan to make a deviation from the Sullivan County uniform tax exemption policy in the case of Bethel Performing Arts Center (BPAC), otherwise known as Bethel Woods, a 501c(3) tax-exempt organization. 

According to its PILOT (payment in lieu of taxes) program, the IDA grants a 20-year tax abatement for eligible organizations, and that period has run out for Bethel Woods, which seeks to extend the abatement for another 10 years. This move by the IDA to deviate from its policy flagged the attention of Dr. Evans, who submitted an impact statement to the IDA on February 6 stating that this deviation would result in an estimated loss of $5.1 million for the Monticello Central School District.

“Without question, BPAC has served as a terrific cultural and economic resource for Sullivan County,” says Evans in his letter. “The annual loss in tax revenues for Monticello Central School District, however, are tremendous. We ask the IDA to reconsider this proposed deviation and find a fair exemption that balances the economic impact on the communities affected.” 

Shortly before the meeting on February 9, the IDA released a new meeting agenda which made no mention of the Bethel Woods deviation.

Why was the deviation pulled from the agenda?

After the board discussed several unrelated business items, IDA Agency Counsel Walter Garigliano addressed the deviation, saying, “Dr. Evans sent a letter suggesting that the IDA involvement was reducing the amount of money the school would get.” 

Briefly outlining the PILOT’s history, Garigliano stated that the Town of Bethel’s assessor 20 years ago believed that Bethel Woods was entitled to a full exemption from taxes; however, former Bethel Town Supervisor Alan Scott, who led negotiations for the deal, asked Bethel Woods founder Alan Gerry to pay $69,676.52 to the IDA every year instead of entering into host-community benefit agreements with the county, town, and school. 

“The PILOT is now ending,” Garigliano explained. “I connected Dr. Evans’ counsel with Bethel Woods’ counsel so that they can have an adult conversation. We’re just an intermediary … Howard [Siegel, Chairman for the IDA] pulled it from the agenda to give the school time to work with Bethel Woods to try to figure that out.”

Siegel agreed with Garigliano’s explanation, adding, “I’ve spent an enormous amount of time understanding it… I have Dr. Evans’ letter, I have numerous conversations with Bethel Woods and the research they did all weekend on this… So that’s why I pulled it, it was just way too contentious.” 

‘Bethel Woods does not make money’

Garigliano said that Bethel Woods originally requested to continue to pay the $69,000 that Mr. Gerry had agreed to pay 20 years ago, but Siegel persuaded them to adjust the amount for inflation, “so that the $69,000 became $113,000, and Bethel Woods has agreed to continue to pay $113,000 for the next 10 years, in their mind, in lieu of becoming tax exempt. Whether or not the assessor, or the school district, or others, feel that they’re entitled to be tax exempt, that’s not our job—It’s our job to provide a mechanism where, if there’s a payment to be made, we can facilitate that payment,” Garigliano said.

IDA member Paul Guenther interjected, “Don’t forget that Bethel Woods does not make money, and so there’s a very major contribution that the town benefits from by the fact that Bethel Woods is a not-for-profit operation.”

Garigliano responded, “Bethel Woods has not looked at or cared much about their assessed value, which is an incredibly large number for a facility that loses $5 million a year. They haven’t cared about it because they were only paying taxes to the fire department; they pay about 70 grand a year in special district taxes. But one might be also concerned about the fact that their assessed value might change dramatically if they don’t work something out.”

Response from Bethel Woods

Bethel Woods Senior Director of Marketing and Communications Susan Russ responded to inquiries in an email message, positioning Bethel Woods as a hub of Sullivan County’s cultural fabric and a contributor to the community. 

“For 20 years, Bethel Woods Center for the Arts has served as a catalyst for economic revitalization in Sullivan County, generating more than $1 billion in economic impact since inception,” Russ said. 

Russ said the organization voluntarily contributes a significant amount every year through a combination of PILOT payments, property and school taxes, and special assessments.

“Our priority,” continued Russ, “has always been the long-term strength and viability of the community. We are committed to ensuring that our impact — economic, educational, and cultural — endures well beyond the next 20 years. 

She said the organization looks forward to collaboration with the IDA and local taxing jurisdictions “to continue a thoughtful, sustainable path forward.”