COUNTY OF SULLIVAN INDUSTRIAL DEVELOPMENT AGENCY
One Cablevision Center
Ferndale, New York 12734
(845) 295-2603 – telephone
(845) 295-2604 – fax
Thursday, September 12, 2013
I. CALL TO ORDER
Chairman Steingart called to order the reconvened meeting of the County of Sullivan Industrial Development Agency at approximately 11:11 A.M., which was held in the Legislative Hearing Room at the Sullivan County Government Center, Monticello, New York.
II. ROLL CALL
Members Present- Members Absent-
Ira Steingart Sandy Shaddock
Harold Gold Charles Barbuti
Staff Present- Staff Absent-
Jennifer C.S. Brylinski, Exec. Dir. None
Jen Flad, VP
Walter F. Garigliano, Esq., Agency Legal Counsel
Allan C. Scott, IDA CEO
Douglas Sansted, Crystal Run Healthcare LLP Chief Legal Officer
III. OLD BUSINESS
Attorney Garigliano passed out to the Board a resolution authorizing the transfer of property and restructure of the sale/leaseback agreement with CRH Realty I, LLC and Crystal Run Healthcare LLP. He explained that the Rock Hill site is located in the Empire Zone. Both the owner (CRH Realty I, LLC) and the tenant (Crystal Run Healthcare LLP) are certified qualified empire zone enterprises. This transaction is structured to ensure that the taxing jurisdictions will get all monies due to them, and that the site owner and tenant will continue to be able to take the real property tax credits offered by the Empire Zone program. The transaction involves allowing the IDA exemptions on the property to expire and terminate at the time of that the property is transferred, after which time the taxing jurisdictions will be paid directly by the new owner.
Attorney Garigliano explained that New York State requires that the amount upon which a PILOT calculation is based cannot exceed the federal income tax basis in the property. In this case, once CRH Realty I, LLC, sells the property, their federal income tax basis will become zero. So if they are making a PILOT payment, that limitation will reduce their credit for real property taxes to zero. However, that limitation doesn’t apply to real estate taxes. So if the exemption goes away, and they make their real estate taxes, they will get the credit for real property taxes for the fourteen-year period.
Mr. Sansted then thanked Attorney Garigliano for his assistance in carrying out the transaction. He explained that Crystal Run LLP will remain the tenant. He described changes in health care services and charges, and that under the Affordable Care Act, the federal government will allow practitioners like Crystal Run to render services to Medicare recipients, and any savings will be divided between the federal government and the practitioners.
This transaction is intended to help the Crystal Run entities raise money to start their own insurance company. He anticipates that the new company’s rates will be approximately fifteen percent lower than current rates. This savings will help attract new businesses to Sullivan County.
Board members asked about the insurance plans that will be offered, and Mr. Sansted stated that the plan networks will be comprised of Crystal Run physicians and other physicians who commit to value-based care, focusing on rendering appropriate services at the correct time, using various technologies, rather than sending patients to the emergency room. This will result in large savings while ensuring quality care. He continued that he anticipates new physicians will be hired at the Rock Hill location as a result of this project, and that as a result utilization of the Catskill Regional Medical Center (where those physicians will perform various procedures) will increase. He also noted that many Crystal Run physicians are equal owners in the business, and others are on a track toward ownership. The Affordable Care Act includes patient satisfaction and quality components, so savings are only passed along to practitioners if their patients are satisfied. So there is a great incentive to provide high quality care. He also indicated that the money saved will be shared among the owners, and among businesses who buy commercial policies from the company. This will provide an incentive for those businesses to give raises to their employees. He projects that the insurance company will be developed over the next year or more.
On a motion by Ms. Loughlin, seconded by Mr. White, the Board voted and the resolution was unanimously passed.
Chairman Steingart questioned the Board and those present if there were any further questions or comments. There being none, on a motion by Mr. White, seconded by Mr. Alport the Board voted and the meeting was adjourned at approximately 11:37 A.M.
IDA VP, Business Development