SANTA FE – The operators of the El Castillo retirement community have agreed to make additional “payments in lieu of taxes,” or PILOTs, to offset property tax breaks El Castillo would receive if Santa Fe city government issues $80 million in tax-free industrial revenue bonds for a new facility.
El Castillo initially agreed to pay the equivalent of the annual property taxes due to the Santa Fe Public Schools and to the Santa Fe Community College during the 30-year-life of the bond issue. Under the IRB financing arrangement, recipients legally aren’t responsible for the property taxes on the financed project. Also, investors don’t pay state or federal income taxes on the bond interest they earn.
Santa Fe Mayor Alan Webber said Monday that El Castillo last week committed to making PILOT payments to the other government recipients of property tax revenue, but starting in year six of the bond issue. David Buchholtz, El Castillo’s attorney, later confirmed the arrangement.
Santa Fe County government, along with the public schools, are the biggest benefactors of property taxes. Along with the community college, the city and state governments also take in property tax revenue.