ROTTERDAM — Members of the Rotterdam Industrial Development Agency approved a tax agreement sought by the SI Group to limit its costs and that will have the company pay the town, county and Schalmont school district $10 million over 15 years.

The effect of the ruling is to resolve Schenectady International’s tax challenges and clear it to upgrade equipment, which officials claimed is necessary for the company’s survival.

But in what was termed a concession Tuesday, SI agreed to pay the Schalmont Central School District $30,000 per year to help mitigate the anticipated $152,000 shortfall in taxes the school will have from the company under the agreement. IDA Chairman Angelo Santabarbara said the town, county and school district will waive an estimated $1.5 million in tax revenue through the duration of the agreement.

“We tried to make sure everyone was benefiting in this,” he said following the meeting.

As part of the payment-in-lieu-of-taxes agreement, the Niskayuna-based chemical company will end four years of litigation with the town over its property assessments. IDA attorney Gerard Parisi said ending the litigation will prevent Schalmont from having to refund more than $1 million in taxes that were overpaid by the company and potentially saves the town more than $100,000 in legal fees.

SI also agreed to provide land at their Rotterdam Junction plant for the town to build a water tank. By building the estimated $1.2 million tank on SI property, town officials will avoid elevation problems identified at other sites considered for the project.

“They’re either going to give us ownership, an easement or a license — one of the three,” Parisi said.

Santabarbara said SI will also consider “community givebacks” in the event the company is fined by the state Department of Environmental Conservation during the agreement. He indicated SI’s production facility off Main Street is now operating under several DEC consent orders.

The agreement was ratified by all five attending board members following a sparsely attended public hearing and a nearly hour-long executive session called to discuss potential litigation. SI Vice President William Scheffer was satisfied by the PILOT and said the company looks forward to spending another 15 years as a productive “corporate citizen” in Rotterdam.

“We think is a winning situation for all parties really,” he said.

Company officials are hoping the PILOT agreement coupled with an estimated $12 million investment to build a biomass boiler will improve its finances. When SI first pitched the PILOT, company official indicated the plant had lost money for five consecutive years.

SI launched a biomass initiative after receiving a $1 million grant from the New York State Energy Research and Development Authority in 2006. Plans for the wood-fired boiler have already passed the state’s environmental quality review with the town Planning Board.

The company projects employing 50 workers during construction, which is expected to last nearly two years. Afterward, the company anticipates creating one additional management position, two skilled or unskilled jobs and four semi-skilled positions.

Fewer than a dozen people turned out for the public hearing on the PILOT Tuesday. Officials from the Schalmont district were not present.

Former town board member Robert Godlewski questioned the tax impact of the PILOT agreement. He feared revenue shortfalls caused by the company’s tax break could ultimately affect residents.

“Somebody has to pick that up,” he said.