The PILOT Program

PILOT, or “Payment-in-Lieu-of-Taxes” is a contractual incentive payment made by a business to replace some or all of the local property taxes that would otherwise be paid on property owned by an economic development organization such as St. Tammany Economic Development Corporation (STEDC). PILOT agreements are discretionary, often used as an economic development tool structured to offer favorable tax reductions to companies that create high impact new or expansion projects.

As a political subdivision of the State of Louisiana, STEDC was created to foster business development and advance sustainable commerce in St. Tammany Parish. Because of this status, STEDC can negotiate and enter into PILOT agreements for companies as an incentive to locate, expand, or remain in St. Tammany. When structuring a PILOT, STEDC negotiates an annual PILOT-payment that is usually lower than the property taxes that would otherwise be due. During the term of the PILOT, STEDC retains symbolic ownership of the incentivized project, and leases said assets back to the company for “rent” equal to the agreed-upon sum or terms.

WHO IS ELIGIBLE?

Any company looking to locate or expand in St. Tammany Parish may apply, however there is baseline criteria that needs to be present in order for a PILOT Incentive to be feasible, including:

• Project Capital Expenditures in excess of approximately $5 Million

• Creation at least 10 new full-time jobs*

• At least 50% of the jobs must meet or exceed the local average salary

• If above criteria are met, project must undergo a benefit-cost analysis with results indicating at least a 2:1 Benefit-Cost-Ratio

Favorable terms/rates are considered based on the determined positive benefit the project provides to St. Tammany Parish.

**STEDC may consider waiving the new job creation

Micro PILOT Eligibility

St. Tammany Economic Development Corporation also utilizes a small business version of the PILOT program known as a Micro PILOT. This tool has a scaled down benefit intended to help fill the gaps for smaller projects that may not meet the above criteria. The approval process is the same, but the eligibility is as follows:

• Project Capital Expenditures must be in excess of $1 Million but less than $5 Million.
• Must create at least 5 new full-time jobs*.
• At least 50% of the jobs must meet or exceed the local average salary.
• If above criteria are met, project must undergo an economic impact analysis.

How it Works?

1. STEDC analyzes the project to determine necessary criteria has been met. This step requires the company to complete a project intake form and provide any additional required data to STEDC.
2. STEDC commissions an economic impact analysis to determine impacts of the project on the local economy. Potential gaps in fire protection services are computed and figured into preliminary benefit framework.
3. Project specs and results of the Impact Study are reviewed and considered by STEDC’s Finance Committee.
4. Project specs and Impact Study are forwarded to STEDC’s Board of Commissioners with STEDC finance committee recommendations. Request for PILOT is either approved or denied by a vote of the STEDC Board of Commissioners. Company may be asked to make a presentation to the board.
5. STEDC takes ownership of project assets from the company and leases it back to the company based on the predetermined terms, including the PILOT payments and annual administrative fees.
6. Company makes annual PILOT payments to the Sheriff who distributes the PILOT payment to the applicable taxing bodies.
7. Company pays administrative fee directly to STEDC.
8. Under the lease, company is responsible for all liabilities, upkeep, maintenance, insurance, etc. on the project.

For more information

For any PILOT related questions, please contact Kyle Buckley.