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What Is A Pilot Agreement
PILOT agreements are designed to support the development of a property or area that would not otherwise generate its maximum contribution to a city`s tax base. The negotiation of the PILOT agreement should be a thorough and fair process. Since state laws do not require local school districts to receive a direct portion of the PILOT, local officials should take the opportunity during the negotiation process to ensure that if the new property directly affects the school district, accommodations should be made to include the school district with appropriate compensation or credit. “Confidential Information” means any information or matter of a confidential nature of the other party and the affiliates of the other party that may be made available to it and of which its affiliate is known with respect to this Agreement, including the limitation, content and existence of this Agreement and any future agreement contemplated herein; and the fact that discussions and negotiations take place in relation to these processes and transactions. If the proponent uses the LTTE option, the agreement is structured in two ways: no less than 10% of the gross annual revenue of the project would be paid; or at least 2% of project costs would be paid annually. If the PILOT is based on the percentage of gross annual turnover, rental income and other expenses paid by the tenant, such as insurance and parking facilities, must also be taken into account in the calculation of the contract. Municipal officials should evaluate the proposal and make reasonable assumptions about the economic viability of the project. These factors include determining the value of taxes that could be generated over the life of the pilot if the property were valued at fair value. The full impact of development should also be taken into account. For example, if single-family homes are built, will there be an increase in school enrolment? When a skyscraper is under construction, do local fire departments have adequate equipment to protect the building or do additional equipment need to be purchased? When seniors` housing is built, do these residents need additional emergency services? An increase in these local services should be taken into account when negotiating a PILOT agreement.
PILOT payments are made in accordance with the financial agreement and in quarterly instalments according to the property tax payment plan. .