St. Lawrence County Industrial Development Agency
Human Services Center
80 State Highway 310 Suite 6, Canton, New York 13617-1496
Phone: (315) 379-9806 Fax: (315) 386-2573
Patrick J. Kelly
Chief Executive Officer
PROJECT ACTIVITY REPORT
Project:
Project Address:
Application Date:
Board Approval Date:
Financing Date:
Kinney Drugs, Inc.
29 Main Street
Gouverneur, New York 13642
10/22/2012
10/25/2012
11/16/2012
Project Overview:
Headquartered in Gouverneur, New York, Kinney Drugs, Inc. is a diversified health care provider and one of the
leading regional drug chains in the country. At the close of 2011, Kinney Drugs operated 90 drugstores throughout
New York State (71 stores) and Vermont (19 stores) and is currently the 4th largest chain drug retailer in the United
States.
The Company has requested sales tax exemption relative to the purchase of materials required to update the existing
warehouse sprinkler system. Facing an inadequate water supply infrastructure and a resultant increase in insurance
costs on its warehouse and goods, the Company has outlined a plan to upgrade its fire protection system and meet
the required criteria outlined by NFPA 13 and NFPA 22.
The project is part of a comprehensive water system improvement initiative being undertaken by the Village of
Gouverneur. In addition to
Actions Taken:
Authorization of Sales and Use Tax exemptions on the purchases, rentals, uses or consumption of supplies,
materials, equipment and machinery.
See attached cost-benefit analysis document.
Economic Indicators:
Jobs Maintained and Generated: The improvement of the fire protection system will allow the Company to remain in
its building for the foreseeable future and prevent the need to relocate due to an inability to secure insurance
coverage on the property and its contents. This project will help retain the 289 jobs at Kinney Drugs’ Gouverneur
locations.
Improved Corporate Performance: The project will enable the Company to retain more affordable insurance.
Other Financing Leveraged:
St Lawrence River Valley Redevelopment Agency Grant .............................................................$100,000
Northern Border Regional Commission Grant...............................................................................$200,000
Community Development Block Grant ..........................................................................................$900,000
Village of Gouverneur Equity Investment ........................................................................................$42,000
Company Equity ............................................................................................................................$350,000
June 4, 2013 Note: The tax-exempt status for this project has been extended 30 days, to July 31, 2013.
FOR AGENCY USE ONLY
COST/BENEFIT ANALYSIS: As required by Section 869-A3 of New York General Municipal Law.
Estimated COST of Agency Assistance:
Estimated BENEFIT of Agency Assistance:
ESTIMATED EXEMPTIONS:
EMPLOYMENT COMPARISON:
Do not include construction jobs relating to the Project.
Double click on chart to enter data
Pre-Project
Employment
2. Mortgage Recording Tax Exemption
a. Projected Amount of Mortgage:
Mortgage Recording Tax Rate:
b. Estimated Exemption:
0.75%
$0
3. Real Property Tax Exemption
Property Location:
a. Investment in Real Property
(Total Project Cost):
b. Pre-project assessment:
c. Projected post-project assessment
d. Equalization Rate (for reference only)
e. Increase in Assessed Value of Property
$0
$0
$0
100.00%
Full Time
Part Time
Seasonal
Total:
Current
Jobs
225
85
310
Post-Project Employment
Total
New
Jobs
0
0
0
0
0
0
0
Created
Year 3
$490,000
7%
$34,300
Created
Year 2
a. Amount of Project Cost Subject to Tax:
Sales and Use Tax Rate:
b. Estimated Exemption:
Created
Year 1
Double click chart to enter data
1. Sales and Use Tax Exemption
PAYROLL COMPARISON:
Double click on chart to enter data
Total Payroll Total Payroll Total Payroll
Total Payroll
1st Year
2nd Year
3rd Year
Before
after Project after Project after Project
Completion Completion Completion
Project
Total New
Payroll
$0
f. Total Applicable Tax Rates per $1,000
g. Ten Year Total Taxes (e X f X 10)
h. PILOT Payments with Standard IDA Pilot
(g X .25)
i. Net Exemption Amount (g - h)
$0
ESTIMATED OTHER BENEFITS:
$0
$0
Sales Tax Revenue
If the project will result in the manufacturing of selling of
a new product, estimate the amount of annual sales
taxes that will be generated on retail sales of the new
product. Otherwise, enter “N/A”. $
4. Interest Exemption (Bond Only )
a. Total Estimated Interest Expense
(assuming taxable interest)
b. Total Estimated Interest Expense
(assuming tax exempt interest rate)
c. Interest Exemption (a – b)
TOTAL ESTIMATED EXEMPTION
$0.00
$34,300
If the Project will result in increased production or sales
of an existing product, estimate the amount of annual
sales tax that will be generated on the retail sales of the
increased production. Otherwise, enter “N/A”. $
Real Property Taxes
Estimate the amount of annual real property taxes that
will be payable on the Project (at the end of the PILOT
Agreement, if any). Otherwise, enter “N/A”. $
What other benefits will the Project bring to the community
and region? Improvement of the fire protection system
will enable the company to remain in the Gouverneur
building and avoid relocation due to an inability to
secure insurance on the property and its contents.