Merlin Seeks 20-Year PILOT Deal For LEGOLAND New York Project

John Jordan | March 2017

GOSHEN—The proposed developer and operator of the $500-million LEGOLAND New York theme park here announced on March 1 that it will seek a 20-year Payment in Lieu of Taxes deal from the Orange County Industrial Development Agency.

Merlin had originally proposed a 30-year PILOT deal, but now is looking to finalize the 20-year accord after the shorter-term agreement was suggested by the Orange County IDA and was evaluated as part of the agency’s study of the project’s impacts by KPMG.

“We hold in high regard the work of the Orange County IDA and the expertise of KPMG,” said Phil Royle, LEGOLAND New York head of project & community relations. “While we believe our initial proposal of a 30-year PILOT would have generated tremendous economic benefits to the Town of Goshen, the Goshen School District and Orange County, we respect public feedback and are modifying our request to a 20-year agreement. The updated proposal will provide even greater economic benefits to the community.”

The KPMG report noted that the 20-year PILOT will generate $87 million in payments over a 30-year period, compared to Merlin’s initial proposal, which would have generated approximately $61 million in payments over a 30-year period. According to the report, based on attendance of two million patrons, the property will generate $8.25 million in sales tax revenue each year from ticket, food and merchandise sales at the theme park.

Other highlights of the KPMG report include estimates of approximately 800 construction jobs to build the project and a total of 1,300 annual jobs (500 full-time, 300 part-time and 500 seasonal) with an initial total payroll of $46 million per year.

“The 20-year PILOT is a lot more lucrative and brings more revenue to all the taxing agencies a lot more quicker than the 30-year PILOT,” said Orange County Executive Steve Neuhaus. “It also, if you add the cumulative value, is better for the communities. It’s something that I think the Town of Goshen wanted in the first place after they saw the 30-year PILOT proposal when it first came out. So, I support it.”

Maureen Halahan, president and CEO of The Orange County Partnership, said of the revised PILOT offer by the LEGOLAND New York developer, “Merlin and the Orange County IDA have worked tirelessly to negotiate a PILOT that will maximize the benefits to the schools and the community while also having the ability to retain the company, making it profitable for LEGOLAND to succeed. Months of hard work was invested and KPMG just released their report stating the economic benefits to our county. It’s positive and worth the read.”

Merlin Entertainments announced last month that it would relocate and reconfigure Exit 125 of Route 17 to help alleviate traffic on local roads in connection with the project that is now in the approval process before the Town of Goshen. The Exit 125 proposal, which still must receive approval from the New York State Department of Transportation, could run as high as $25 million to complete, Orange County Executive Neuhaus told Real Estate In-Depth.

Legoland’s Royle will be the keynote speaker at the April 20th meeting of the Hudson Gateway Association of Realtors’ Commercial Investment Division. The session, which will begin promptly at 8:30 a.m. will be held at the HGAR Goshen offices at 9 Coates Drive.

 

John Jordan
Editor, Real Estate In-Depth