MONTICELLO –– Tensions rose during Thursday’s full board meeting of the County Legislature when Fremont resident Cat Scott brought up a statement made by County of Sullivan Industrial Development Agency (IDA) Counsel Walter Garigliano at their February 14 meeting.

During that meeting, the IDA Board voted to authorize a straight lease transaction between the agency and the Sunset Lake LDC, as well as a Payment in Lieu of Taxes (PILOT) Agreement, for the Care Center at Sunset Lake property.

The PILOT agreement, which is for a term exceeding 20 years, has the LDC paying the IDA $350,000, due January 2023, with that amount increasing by two percent annually.
Garigliano, when answering a question from a member of the IDA Board, said there was a contract by the LDC to “sell the Care Center.”

Scott, referencing the statement, said to legislators, “You lied. You lied through your teeth.”
Legislator Joe Perrello then added, “If you guys put a contract together to sell it, you’re gonna have a problem with me ... whoever did it. There better not be a contract.”

Legislative Chairman Rob Doherty and Vice Chair Michael Brooks quickly jumped in and said there was not a contract to sell the Care Center.

‘Definitely a lease’
The Democrat reached out to Garigliano on Friday and he said that the agreement between the LDC and Infinite Care, the operators of the Care Center, is “definitely a lease” and “not a sale.”

Garigliano told the Democrat that the person he was interacting with (who he said he wouldn’t mention), kept calling it a sale, and that it’s been commonly discussed among people as a sale.

However, Garigliano said Perrello had pointed out to him that it was, in fact, a lease.Then Garigliano asked County Attorney Michael McGuire for a copy of the agreement between the LDC and Infinite Care. Garigliano said McGuire referred the request over to the LDC’s counsel, Harris Beach, PLLC, who sent him the document.

Garigliano said the IDA would be clarifying that it is a lease when they reconvene and that the agency will readopt the resolution once they have the correct information that it is a lease and not a sale.

“I don’t want them voting on something when there’s information that’s not 100 percent accurate in front of the board,” said Garigliano.

Next steps
The LDC is still in a dispute with the Town of Liberty over the Care Center property’s taxable status.

Currently the Care Center’s Certificate of Need (CON), which is required by the State to operate a nursing home, rests with the County, therefore a consulting agreement is in place between the LDC and Infinite Care, and the latter is serving as a contracted vendor.

McGuire explained that when the County transferred the property to the LDC, there was an immediate leaseback of the property to the County to continue to operate it. That lease sunsets once Infinite Care gets the CON. Then they will enter into a lease with the LDC.

LDC Chair Lowell Feldman, responding to comments at Thursday’s full board meeting, said that when Infinite Care becomes the operator, a property tax exemption will no longer apply, as it will be a for-profit enterprise.

Feldman said there’s been no discussion whatsoever about a sale and called the property being put on the tax rolls, “an unjustified move”, adding, “There was no reason for that exemption to be removed because the LDC’s a nonprofit.”

In the meantime, McGuire said there would be an Article 78 suit to contest the taxable status, which they have six years to bring. An Article 78 proceeding is used to appeal the decision of a New York State or local agency to the New York courts.

He also said they would be filling the RP420A (Real Property Tax Exemption application) prior to March 1, 2022 (New York State’s Taxable Status Day).

Taxes revisited
Town of Liberty Assessor Vanessa Kelder previously told the Democrat that when the County transferred ownership of the Care Center to the LDC, the property no longer fell under the tax exemption it had. Therefore, the exemption came off. Kelder said the Sunset Lake LDC did not apply for a new exemption by March 1, 2021.

At the LDC meeting on Thursday, their counsel, Shawn Griffin of Harris Beach, PLLC, explained that there are two arguments to be made.

One is that they don't have to apply for an exemption because it’s a continuation of the County exemption when they took the lease back. The other, he explained, is that the County wasn’t aware the asset they had transferred was deemed taxable until after the 2021 Taxable Status Day.

“As an LDC, we are relying on the exemption,” said Griffin. “The nursing home obviously does not need any additional costs. Nor does the County. But an additional property tax payment paid in the first year will lead to the second year being eligible for reimbursement. So the first year is painful. We can handle taxes with reimbursement. We can’t handle unfunded taxes.”

Therefore, the LDC board gave Griffin the authority to try to stabilize the taxes, which is why they approached the IDA.

He added, "We also knew long term, in order to get Infinite Care to stick with the plan here, get the resident population back up, get the employment back up, work with us on all that and then get the CON in their name so that they can operate the facility, we needed to have this long-term resolution to [the] property taxes.”