Tuesday, April 21, 2020

Changes in the Plan

Tonight, the Common Council is expected to vote on the resolution to grant a PILOT (payment in lieu of taxes) to a building to be constructed in the area of the city dubbed by the Galvan Foundation "the Depot District."

Ahead of tonight's Council meeting, a PowerPoint presentation has appeared on the City of Hudson website. The PowerPoint clarifies one issue that puzzled Gossips: why they identified the project as 75 North Seventh Street when it's on the east side--the even side--of the street. They have changed the proposed site.

The building is not going to be on the even side of the street, as the rendering that circulated months ago indicates. It's going to be on the west side of the street, and the three houses that now stand on that side of the street--all currently owned by the Galvan Foundation--will be demolished.

The first reason cited for changing the location is: "Minimizes potential project complications to ensure this critical project is as competitive as possible for New York State funding support." One of those "complications" may be that the original site was in a locally designated historic district, and plans for the building would have to be reviewed by the Historic Preservation Commission. The new site is not in a historic district. One has to wonder about New York State funding support though. Nearly every day Governor Andrew Cuomo reminds us in his COVID-19 briefing that the State has no money, there is a $6 billion deficit in the state budget, and it is spending unanticipated money on equipment to deal with the pandemic. Will there be any state money for this project?

The PowerPoint gives specific information about the mixed income nature of the building.

Rents in the 77 units will range from $454 a month to $1,750 a month--based on incomes ranging from 40 percent of the AMI (area median income) to 130 percent of the AMI.

What should be important to everyone in Hudson is the PILOT. The building will pay $77,000 a year in a payment in lieu of taxes, which works out to $1,000 a unit. (Homeowners in Hudson are paying from $10,000 to $15,000 a year in property taxes, and some even more.) The PILOT will be in place for forty years, and the PILOT payment will increase by 2 percent every year. We are told that this amount is an increase of $57,000 over what is being paid in property taxes on the existing houses, but what isn't being made clear is that the $77,000 is not all coming to the City of Hudson. It will be shared by the City, Columbia County, and the Hudson City School District--the latter, as we all know, taking the lion's share of the $77,000. 

Over the weekend, former Council president Don Moore did the math, based on the current mill rates, to show how that $77,000 would get divided up, and gave Gossips permission to share his work.
  • City of Hudson, 7.59 mill rate, 28.88 percent of $77,000, or $22,237
  • Columbia County, 5.24 mill rate, 19.94 percent of $77,000 or $15,354
  • Hudson City School District, 13.56 mill rate, 51.6 percent of $77,000 or $39,732
Given that the $77,000 has to be divided three ways--and unevenly divided at that--the touted $57,000 increase in property tax revenue is not that significant. Hudson's 29 percent of the $57,000 is $16,530. Compare that gain with revenues the City is losing during the coronavirus pandemic. The 2020 city budget anticipated $340,000 from lodging tax, $1.9 million from sales tax, and $170,000 from parking fees. With the city shut down and parking fees at meters suspended, the City is losing close to $200,000 a month in unrealized revenue. We are already six weeks into the shutdown, and there's no telling when it will end. Now does not seem like a very good time for the City to be offering such a generous tax break, for such a long term, to anyone.
COPYRIGHT 2020 CAROLE OSTERINK

25 comments:

  1. I would also point out that in our current crisis, Galvan has not lifted a finger to proactively provide relief to its residential or commercial tenants in Hudson. Instead, after stressed-out tenants and small-business owners have exhausted the various Byzantine processes of government aid, often in the form of loans that have to be repaid, Galvan is offering to defer their rent to the end of their lease on a case-by-case basis. In contrast, a number of smaller landlords in town have cut rents in half or forgiven April rent in the altogether.
    It's unconscionable to think the Common Council would blindly rubber stamp a shameless money grab by one of the worst actors in town. It leaves our now-cash-strapped community on the hook to provide necessary services to low-income residents (which we won't be able to afford, to their detriment and the detriment of existing low-income residents), increase the mill rate for middle-class homeowners (which they won't be able to afford), increase rent for tenants of smaller properties (which they can't afford) while lining the pockets of Eric Galloway (which he most certainly does not need.)
    There's currently a lot of confusion and more questions than answers on community forums about this project. Before the Council votes to approve or reject it, the mayor should have the opportunity to present his proposal and supporting financial analysis to Hudson residents and answer questions. Common Council members should then, in turn, take time to listen to resident concerns before bringing this up for a vote. Other affordable housing projects in town have succeeded without PILOTS (see: Crosswinds); it's unclear why this project needs such a generous and long-term subsidy from the taxpayers to get off the ground.
    In this interim, we should have a clearer understanding of our city's financial outlook, which will give everyone time to decide if this is, in its current incarnation, the best project, or even a feasible one, for Hudson going forward.

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    1. silver lining for the "worst actor"

      Hudson rewards bad behavior

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  2. I do hope the Council members discuss the relative track records of those proposed to manage this undertaking: our mayor who I believe has no experience in project management or property development, and any one of the existing or proposed Galvan/Galaway entities given that they have littered Hudson with multiple examples of their constitutional inability to complete what they started. This is especially true given the broad and unchecked authority the Council seeks to grant the mayor in the resolution.

    There needs, at a minimum, to be significant conversation about the affordability of this project which seems to depend entirely on public finance and the sale of tax-benefit bonds to well-heeled investors. If the promoter of this project has no skin in the game, how can we as a city feel comfortable partnering with it especially as the terms of the public money will lock up the use of the property for nearly a half century? A completion bond in the amount of the projected cost might go a long way towards quelling the community's reasonable suspicions about the advisability of supporting this project as presented.

    Maybe it is the best idea for that space and this time . . . but the onus is on the promoter to show that, and on the Council to insist upon that showing being evidence-based and convincing.

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  3. The illustration is very deceptive. It makes a tree look almost as tall as this building. 77 apartments is almost the size of Bliss Towers. This is a huge building. Does Hudson really want to go down this road, allowing another gigantic apartment building in city limits? How many more cars and congestion is this going to add? Many small towns are destroyed by this type of development. Usually, it leads to more developments, more cars, more box stores, widening of roads and expansion into adjacent farmlands. This is very shortsighted. The impact of a project of this type is not localized, it is not based solely on the amount of taxes or even the impact on this immediate area. This changes the direction and character of the community not just now, but into the future. A big mistake, totally unnecessary. If affordable living space is needed, create it within the confines of already existing structures.

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    1. Bliss Towers is 117 units, 40 more than the proposed project.

      For the record, I'm in no way opposed to density. We should have a more pedestrian-friendly city, and density provides incentive to provide incentive within walking distance.I'm also a big fan of green spaces, and restricting development to small, dense places preserves more of our green space for preservation, recreation, and agriculture, where appropriate.
      Also, FWIW, Hudson has laws preventing the building of chain stores. Not sure where big-box development would go.

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  4. Has anyone inquired about the expense to the City? I can't imagine the current water/sewer lines or drainage system are sufficient for 80 units. In addition, has anyone investigated the burden (ie, increased expense) on other City services? The taxpayers have a right to understand how the project will impact their taxes, and our elected officials have a responsibility to ask the right questions. Sadly, it seems as though many of our elected officials are ready to rubber stamp this project with little information to claim a housing victory.

    Are taxpayers supposed to swallow this untimely pill while we watch so many of Galvan's (and its related entities) properties fall further into disrepair? Has anyone seen the condition of the Robert Taylor house lately- one of Hudson's oldest properties, fenced in to protect the public from the unsafe condition? Have we forgotten the lessons of the Armory already? Or what about the building on State Street that was demoed due to neglect? Or the bricks from the mental health building that would be repurposed? How many of Galvan buildings remain vacant and how long have they been vacant? Why are we thinking about another Galvan project when so many of Galvan's properties have sat for years on end? Why are these questions not being asked?

    Here's hoping the council shows some sense tonight and tables this project until the City has reopened, the City has an understanding of the impacts of the virus on the current and future budgets (we generate a lot of dollars from tourism, and we're going to lose a lot of those dollars), and the residents of the City have an opportunity to weigh in on this project.

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  5. The very fact that a project of this size, with implications for historic preservation and public expenditures in the millions should be decided with no practically no public hearings and single meeting of the Common Council should be enough of a reason to scuttle this proposal. Think of what poor Stewarts went through to create a tax-paying business!!! In my 30+ years in Hudson, I have never seen a robbery of the public purse more shameless than this one.

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  6. Some questions for the Council:

    --Has Historic Preservation approved the demolition of the houses?
    --Is there a clause in the PILOT contract guaranteeing what the rents will be for ten years?
    --Is there a clause in the PILOT contract specifiying what rental lease will look like?
    --Is there a clause in the PILOT contract specifiying when the project will be rentable and when the PILOT starts vis a vis a fully rented building?
    --Is there a Housing commissioner or public committee overseeing compliance with the PILOT contract?
    --What are the Ctiy's estimates on the econoomic impact of the current COVID crisis?
    --What are the forecasts property tax forecasts for next year?

    Etc. This is the tip of an iceberg...

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    1. Just now, while listening to the meeting, I'd like to add
      --What is the size of a Studio?
      Is it 300, 400, 500 sq feet?

      Delete
  7. For comparison, 620 Union, St the former Old Folks home, assessed at $1,700,000, currently pays around $50,000 a year in town and school taxes. Not against PILOT's but $77,000 is way too low, even with increases.

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  8. I'm writing as I'm listening to Common Council President Tom DePietro have the absolute audicity to proclaim how much time the council has spent on this proposal during the last week. This democracy-scuttling performance -- keep in mind, this is an audio meeting in the midst of Covid!!! -- should be the beginning of an immediate impeachment initiave to remove Kamal and DePietro.

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  9. The Mayor is speaking... Oh now he says he's been working on this little project for months All the more reason to hurry up the impeachment petition. Transparency? Democracy? Who has been wokring on this with you, Kamal? Where's your housing commisioner? Where's your "public"? This is right out of the Trump playbook.

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  10. Hurrah for Rebecca... I think she just said that these apartments were high-end apartments.... Oh wow. This used to be called corporate welfare! Kamal for affordable housing? Oh my God. What disaster.

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  11. Malachi: Table the resolution. Yes, affordable housing. This ain't it, Malachi. Table the resolution. How is it going to affect taxes... Galvan's Kent compares an empty lot to $77k. Isn't that convenient. Apples and oranges? Galvan should go into the fruit-growing business.

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  12. "I'm not even sure that his is the first PILOT that the City has taken on,"says Tiffany Garriga. Is that true? Is this council member's ignorance on this question so profound that she should be voting on this proposal? Shouldn't the taxpayers expect a reasonable amount of knowledge about these issues before they are voted on? who's in charge here?

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  13. There are so many questions here, it is truly remarkable that the Mayor and others have lined up in favor of it. This is not democracy; it's the dictatorship --- or attempt at it --- of the proletariat. And that proletariat is a very very small group. Stay tuned for the impeachment petition...

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  14. "We have all the time we need in the next two weeks," says DePietro. Forget Trump. These guys might as well go back to the 3d Reich. An amazing vote ("oh, it's just to have a meeting")... to table the resolution... ... the votes are as confusing as the reichstag would love it... "We can't actually talk about it," says DiPietro, "but we can ask Dan questions..." Marquez couldn't do any better: confusion in the time of chaos. Throw the bums out.

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    1. I received a very cordial but direct email from a friend almost as soon as this comment was posted. And he was absolutely right: my use of the "3d Reich" here was reprehensible. And he's right. I'm sorry. Carole, of course, can delete anything she wants to delete. As a one-time journalist, I believe in having to live with what I write; not proudly, in this case.

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  15. "Very hard to create a timetable for anything," says Kent. Uh? Isn't this his business?

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  16. So what kind of guarantee is there that these units will only be rented out to current Hudson residents in need of affordable housing? What’s to stop Galvan from renting these units out to people moving to Hudson? These kinds of projects have a way of starting out sounding very altruistic but morphing into something else entirely.

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  17. The more you think about it, the crazier it gets. With an average rent of $1100 a unit, that's $84,700 in rents a month. $1,016,400 in rental income a year, and for that the city gets $16,530 a year in tax? No wonder this is being pushed during a pandemic with no public scrutiny.

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  18. $17,500 going to Hudson Youth? Really? What?

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  19. The mayor said that he has been working on this since before the election. Did all of the “All Hands on Deck” folks know that their candidate had such a cozy relationship with Galvan?

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  20. How about a resolution that no entity or individual can own a certain amount of properties in the City of Hudson (that number being the same number that Galvan and all its subsidiaries currently own here). Let them take us to court. Galvan is out of control -- wanting to knock down perfectly good houses, letting many others rot, naming neighborhoods as if they are our lords, and being so unprofessional and brazen as to make a rendering of an enormous City-backed project and deciding that it was all wrong anyway and on the wrong side of the road. They get the City's approval (at least the Mayor's) to build on an unused lot, then do the old switcheroo as if it was a minor mistake or overlook and no big deal. It's ridiculous. This entire project should be put on hold until things return to 100% "normal," if that ever happens.

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  21. Wow, this stinks badly. Certainly to push through in one week is ridiculous - so many questions. What no Public Hearings? Galloway is a bad actor with a bad reputation in his dealings from New York City. And too many of his projects around town rotting, just a few finished to make him look good. He's good at switch and bait. Wake up City, don't have the wool pulled over your eyes. We're in the middle of a pandemic and it's going to take long enough to recover from that, never mind a boondoggle like this.

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