Wednesday, July 21, 2021

The Depot District and the IDA

The Hudson Industrial Development Agency (IDA) is coming to the end of its consideration of benefits for the two apartment buildings being proposed for North Seventh Street. Today, the IDA heard a presentation by representatives of DJH Advisors, the group that did the financial analysis of the proposed project. 

The presentation walked IDA members through the report submitted by DJH, which Gossips posted about yesterday. The most significant recommendation of the report was that the PILOT for 708 State Street be amended to make its duration twenty years instead of twenty-five years. When the presentation was complete, it was suggested that the PILOT proposal submitted by the Galvan Foundation be amended to modify the PILOT schedule proposed for 708 State Street. Dan Kent said Galvan was "comfortable with the review by DJH." Mayor Kamal Johnson moved that the IDA accept the recommendation to change the PILOT schedule for 708 State Street. Mike Tucker advised that the next step was to receive an amended application from Galvan.

A public hearing on the project will take place sometime between August 4 and August 11. Gossips will publish the date and time of the public hearing as soon as it is scheduled. A week after the public hearing, the IDA will meet to make its decision.

Some interesting information emerged during the meeting, which took just 38 minutes. The representatives of DJH consistently referred to 708 State Street as "market rate housing." Rebecca Wolff asked why they were calling it "market rate" when "it does have income restrictions." She was told, "We don't know what regulating construct applies to this project." The other building--75 North Seventh Street--is, to quote the DJH report, "a regulated affordable development with LIHTC [low-income housing tax credit] equity."

Wolff also asked about a statement in the report that conversations with the assessor had been "inconclusive." Tucker explained there were only three or four comparable properties in Hudson, and they were all older. Earlier, Anna Marsh of DJH spoke of existing apartments in Hudson being "older and lower construction grade." 

Gossips was struck by one bit of information in the report that seems counterintuitive. The construction costs per unit are estimated to be $250,000 for 75 North Seventh Street and $205,000 for 708 State Street. This may be because there are fewer large apartments proposed for the "market rate" building at 708 State Street.
COPYRIGHT 2021 CAROLE OSTERINK

8 comments:

  1. I wonder if the end result is that Hudson is building capacity to accommodate more low-income residents? Seems to me the goal should be to get present residents into better quality housing, but not to open the door to an even greater population of economically disadvantaged people. A re-run of the 1970's would be a big mistake.

    ReplyDelete
    Replies
    1. Thanks for saying that, my thoughts exactly. I remember the days.....and a lot of sweat equity has been put into this town to upgrade housing from the way it was.

      Delete
  2. The Industry of poverty is a real moneymaker for a few.

    ReplyDelete
    Replies
    1. And that's the only industry Galvan is invested in. Everything it does seems about increasing poverty in Hudson to enable more need and less ability. If they were so invested in alleviating poverty why don't they also invest in education and job training? Where's the donations to the school district? Or do they only make donations to pliant local pols?

      Delete
  3. I have a few observations about this discussion.

    In the pro forma documents reviewed, 708 was referred to as a mixed income housing development. At some point in Galvan's proposals for the development of 7th street, this was changed to Market Rate, which is how it is now described. Are the pro forma documents filed relevant or accurate given that a very basic aspect of the proposed development for 708 has changed?

    If 708 is a commercial real estate development of market rate housing, why is a PILOT even on the table? It will not generate any long term employment opportunities in Hudson - unlike, say, a hotel. It will result in increased costs to the city and the school district for services. If the developer sees this as lucrative investment opportunity, in a town which is currently desirable, why are the taxpayers in Hudson expected to subsidize it?

    My last observation relates to the initial proposal, which was much less ambitious, to build an affordable housing apartment building. Galvan withdrew from that proposed project because they could not come to an agreement regarding the PILOT. They then came back with essentially same proposal, but added on the mixed income piece, commercial space and essentially an entire new neighborhood. Mixed income has now become market rate. There seems to be a lot of bait and switch going on here. One of my many concerns - and there are many issues for the city with this whole project -- is that if the city decides to approve this development but not grant the request for a PILOT for the real estate development of market rate housing, that Galvan will simply pick and choose what pieces they plan to actually build. This will bring them back to where they want to be -- major concessions from the city for the original proposal that they had put forward, which was met with considerable resistance.

    Surely we cannot be this naive.


    ReplyDelete
    Replies
    1. You are mistaken about 708 State Street. It was originally proposed as market rate apartments, but the IDA asked the very question you do: If it's market rate, why does it need a PILOT? So in May, Galvan decided to change the description from "market rate" to "workforce" housing, saying the building would be affordable to households with incomes from 80 to 130 percent of the AMI. https://gossipsofrivertown.blogspot.com/2021/05/news-from-ida-meeting.html That's why Rebecca Wolff questioned why DJH consistently referred to 708 State as "market rate." See paragraph 5 above. 75 North Seventh Street is and always has been mixed income--for households with incomes from 40 to 80 percent of the AMI.

      Delete
  4. thank you Carole I stand corrected. I still think there is some bait and switch going on here
    M

    ReplyDelete
    Replies
    1. as they say : the devil is in the details

      Delete