During the city's revaluation process last year, this meme and others like it appeared often on Facebook pages and elsewhere.
I was reminded of the meme on Tuesday night, when the Common Council was discussing the Benjamin Center's study of the PILOT proposed for 75 North Seventh Street.
Both Dominic Merante (Fifth Ward) and John Rosenthal (Fourth Ward) complained that there was financial information missing from the report. The missing information was the estimated value of the project when it was completed, which would allow the Council to calculate how much in property taxes would be forfeited if the project were to be granted a PILOT. The proposed PILOT (payment in lieu of taxes) is $77,000 in the first year (of which about $22,237 would come to the City of Hudson), to be increased by 2 percent every year thereafter for the 40 year duration of the PILOT.
Dan Kent told that Council that the Benjamin Center had not requested that information, indicating they did not think it was necessary for the study they were doing. Kent told the Council that construction costs for the building were estimated to be $22 million. Here's the extraordinary part--the part that brought the meme to mind: Council president Tom DePietro, who opened the discussion by expressing his support for the project, reported that the city assessor, Cheryl Kaszluga, estimated the assessed value of the building would be between $8 and $10 million. How does a finished building end up being worth less than half of what it cost to construct it?
The Benjamin Center study suggested that the City might want to extend the PILOT to fifty years, which is the period of time the building is required to remain affordable housing by the federal Low-Income Housing Tax Credits program. The reason for making this recommendation is that when the 40-year PILOT is over, Galvan is likely to seek tax exemption for the building and take it off the tax rolls altogether. Merante asked Kent if Galvan would commit to not taking the property off the tax rolls. Kent suggested that if the City extended the PILOT to 50 years, Galvan might commit. Christine Chale, the City's legal counsel in matters having to do with PILOTs, advised that the PILOT agreement Galvan was seeking only allows the PILOT to last for 40 years.
One thing we can be sure of is that Galvan has not abandoned its plan to construct another apartment building across the street, on the site originally proposed.
When Dewan Sarowar (Second Ward) expressed doubt about the expectation that the cars associated with 77 apartments could be parked on the street, Kent told him it was not feasible to include a parking garage in the project and cited the parking study which showed there was adequate onstreet parking in the neighborhood. When Eileen Halloran (Fifth Ward) suggested that the lot across the street might be used for parking, Kent told her they were saving it for another housing project.
At the onset of the discussion, DePietro told the Council, "We are being asked to approve a PILOT so that Galvan can apply for funding from the state." Jeff Baker, legal counsel to the Council, corrected him: "You are expressing support for the PILOT not approving it." Whatever they are doing, it is not clear when they will be doing it. Toward the end of the meeting, before the Council went into executive session to discuss pending litigation having to do with assessments, Ronald Kopnicki, a member of the public, said he wanted to make a comment about the Galvan project. DePietro refused to allow it and told Kopnicki, "We won't be deciding anything at the next meeting, but we can allow public comment at the next meeting."
The next meeting of the Common Council takes place on Tuesday, June 16, at 7:00 p.m.
Update: Since this post was published, Cheryl Kaszluga, the city assessor, has provided Gossips with additional information. She was asked by Tom DePietro about the potential assessment more than a month ago. On May 1, she asked for additional information, such as the cost of construction. Apparently, that information was not provided to her. Without it, she made an estimate based on square footage alone and without the commercial space. "That," she explained, "is how I came up with the $8 to $10 million value."
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