Monday, August 22, 2022

Of Interest

Roger Hannigan Gilson has an article about the Hudson IDA (Industrial Development Agency) in today's Times Union: "Hudson rethinks how it gives tax breaks after hotel developers flock." The article begins with the Pocketbook Factory, which it claims is "one of more than a half-dozen hotel projects that have started the approval process in the city of 6,000 in the last few years." As a pretty faithful observer of the IDA, I'm at a loss to name "more than a half-dozen hotel projects that have started the approval process." There was The Wick, which was granted a ten-year PILOT (payment in lieu of taxes) in 2016. (The Wick is now in Year 5 of its PILOT, which began in 2018, and its tax payment for this year is $53,125.) 

In 2020, the hotel proposed for 620 Union Street, the former Home for the Aged, was granted a PILOT and other tax abatements. (This is the project referred to in Gilson's article as "Hudson Home.")

In December 2021, the IDA approved a PILOT for the restoration of the Pocketbook Factory, the plans for which include a 40-room hotel component.

In April 2022, the Galvan Foundation made a presentation to the IDA of its plans for The Hudson Public, the hotel being proposed for the buildings at the corner of Warren and Fourth streets. The consideration of that proposal was halted in May, when the IDA decided to delay making any decisions until it had adopted its new guidelines and rubric for evaluating applications for tax benefits. Gilson includes this project in his article as if tax benefits for it had already been granted.

That makes only four hotel projects "that have started the approval process . . . in the last few years," and only if you consider six years ago to be "in the last few years." Both Mike Tucker, consultant to the IDA, and Ryan Wallace, who chairs the IDA, have made reference to two more hotels--the one being proposed for the former Elks Lodge and another at an undisclosed location--but neither has as yet presented an application. Even including those, the total is just a half dozen not more than a half dozen.

What seems strange about this article, which posits that the Hudson IDA is giving greater tax breaks than other IDAs in the Capital Region, is that there is no mention of the PILOTs given to the two apartment buildings proposed by the Galvan Foundation for the "Depot District."

The four projects Gilson focuses on are commercial projects with 10- or 11-year PILOTs structured in such a way that the amount paid in property tax increases over the duration of the PILOT. When the PILOT ends, taxes are levied on the assessed value of the property. The duration of the PILOTs for the Galvan buildings is longer: 25 years for 76 North Seventh Street and 30 years for 75 North Seventh Street. When the PILOTs on these buildings are over, it is unlikely that Galvan will start paying taxes on the assessed value of the property. Early on, a study by the Benjamin Center pointed out that, when the PILOT ends, Galvan could take the buildings off the tax rolls because they fulfill the foundation's mission as a not-for-profit. Dan Kent, vice president of initiatives for Galvan, has been quoted as saying Galvan "was completely onboard with entering into another PILOT when this one is up."

Clarification: Roger Hannigan Gilson has informed me that when he stated that the Pocketbook Factory was "one of more than a half-dozen hotel projects that have started the approval process in the city of 6,000 in the last few years," he did not mean approval by the IDA but rather site plan approval by the Planning Board. He has edited his article to reflect that.

No comments:

Post a Comment