Incentives & Financing

The Straight Lease is a tool used by the Sullivan County IDA to help businesses acquire, construct, and equip facilities that create or retain jobs and support economic growth.

Through a lease agreement, the IDA takes title to the property and/or machinery and equipment, allowing eligible companies to receive certain tax benefits.

Eligible projects may receive real property tax exemptions through a PILOT agreement, sales and use tax exemptions, and mortgage recording tax exemptions.

1. Real Property Tax Exemptions

When real property is transferred to the IDA as part of a straight lease or bond transaction, the IDA becomes the owner of record. As a tax-exempt agency, the IDA may provide real property tax relief through a Payment in Lieu of Taxes agreement, or PILOT.

A PILOT typically allows the applicant to pay a portion of normal real property taxes, especially in the earlier years of the project. PILOT schedules are negotiated to balance the needs of the applicant with the needs of local taxing jurisdictions.

Special assessments and special ad valorem levies, such as water, sewer, lighting, and fire district assessments, remain the responsibility of the applicant.

2. Sales and Use Tax Exemptions

Eligible purchases of construction materials, equipment rentals, and project-related equipment and furnishings may be exempt from local and New York State sales and use taxes when made as agent for the IDA.

Operating and maintenance expenses are not eligible for this exemption.

3. Mortgage Tax Exemptions

The IDA may exempt mortgage recording tax on project-related financing to the full extent permitted by New York State law.

In addition to Straight Lease incentives, the IDA may issue taxable or federally tax-exempt bonds to provide low-cost financing for eligible projects.

The borrower agrees to make payments to retire the bond obligations through agreements with the IDA and lender. Depending on the project and financing structure, bonds may be placed privately or publicly.

Bond counsel is typically involved in document preparation and tax-exempt bond review.

1. Application Process

The Sullivan County IDA considers applications on a first-come, first-served basis.

Projects must be eligible under New York State law and approved by the IDA after review under its Uniform Tax Exemption Policy. Eligible projects must generally serve a public purpose by creating or retaining employment.

Certain projects may be limited or restricted under New York State law, including governmental projects, extra-territorial projects, certain retail projects, and projects relocated from outside Sullivan County except where allowed by law.

Retail projects may be limited under New York State law, with certain exceptions for approved tourism destination facilities.

All applications must include the required cost/benefit analysis and meet State Environmental Quality Review requirements.

2. Procedures

Once a completed application is submitted, the IDA conducts a preliminary review. The application is shared with IDA board members and counsel.

If proposed financial assistance totals $100,000 or more, a public hearing is required.

The IDA may then consider an inducement resolution, complete environmental review, and approve final project documents.

3. Fees

A non-refundable $250 application fee is required with all project applications.

An additional upfront fee of $5,000 is required to cover initial IDA costs, including environmental review. Additional agency, administration, and attorney fees may apply.

Contact SCP for more information and application guidance.