FORT EDWARD — A major landowner has defaulted on $3.8 million in property taxes, precipitating a financial crisis for Washington County.
The county is now suing the property owner, WCC LLC, a real estate holding company whose owners are affiliated with D.A. Collins, a Wilton construction company, to get its taxes.
WCC leased land to General Electric Co. for the dewatering plant that processed sediment pulled from the Hudson River during the PCB dredging project.
WCC has had no income since GE finished dredging and dismantled the site.
The company marketed the location as an industrial park and various companies expressed interest, but no one has moved in.
WCC officials have repeatedly expressed concern about their ability to pay the taxes if they can’t get new companies onto the property.
The tax bill went down significantly after GE moved out and removed many of the buildings, but it’s still considered a developed site because WCC asked GE to leave behind water and septic systems, lighting, roads and parking lots.
The assessed value for the two dewatering plant parcels was lowered from a combined $72.6 million to nearly $37.5 million. That reduced the tax bill from $3.8 million for 2016 to $1.9 million from 2017.
WCC spokesman and D.A. Collins Vice President John Davidson declined to discuss the situation, citing the lawsuit. He also said WCC is not connected to D.A. Collins.
The tax default has already created serious problems for Washington County. The county had to spend $3.8 million of its savings to cover the taxes.
The county is preparing for WCC to default on its 2017 and 2018 taxes as well, for a total of $3.7 million, Treasurer Al Nolette said.
If it does, the county could suffer from a cash flow problem that would make it difficult to pay bills in between times in which it receives taxes and other large chunks of revenue. The county uses its savings to manage cash flow.
The county had $15.2 million in savings before writing off the $3.8 million that has now defaulted. That reduced the county’s savings to $11.4 million. The county also spent $500,000 in savings, reducing it further to $10.9 million.
Assuming the county spends another $500,000 each year and WCC defaults again, in 2019 the county will have only $6.1 million in savings.
“And folks, I don’t know how we operate there,” Nolette said.
That amount would leave the county struggling with cash-flow problems, he said.
Until the lawsuit with WCC is resolved, the county must continue to pay taxes to the Fort Edward school district, the village of Fort Edward and the town of Fort Edward, for WCC. After the lawsuit, those entities will likely take a loss, Nolette warned.
“I have serious concerns about the schools,” he said.