This morning, the Hudson Industrial Development Agency (IDA) narrowly approved a PILOT (payment in lieu of taxes) and other benefits for Hudson Mansion, the boutique hotel proposed by the Casetta Group for 601 Union Street, the Terry-Gillette mansion which was for decades the Hudson Elks Lodge.
In the vote on the resolution granting the PILOT, there were four yes votes, from Heather Campbell, city treasurer; Randall Martin, who represents the Planning Board on the IDA; Dominic Merante, Common Council minority leader; and Charles Millar, the community representative on the IDA. Those opposed were Mayor Kamal Johnson and Margaret Morris, Common Council majority leader. Cheryl Kaszluga, the city assessor, was absent from the meeting.
The agreement the IDA approved was not the agreement originally sought. The original proposal from the developer was for a twenty-year PILOT, which would have exempted the hotel from property taxes for the first ten years and given a 50 percent exemption for the next ten years. Needless to say, that proposal has not well received. At a public hearing on December 3, Colin Stair, of Stair Galleries, called it "preposterous" and declared, "I will do everything I can to fight this." Nick Haddad, vice president of Hudson Development Corporation (HDC), said it was "unseemly that they are asking a giveback from a stressed-out city." Real estate broker Nicole Vidor called the proposal both "obscene" and "grotesque."
After the public hearing, the Hudson Mansion came back with a new proposal. This time, the request was more reasonable. The PILOT would last for only ten years, and the hotel would be paying a percentage of the property taxes each year, a percentage that would increase over the period of ten years until in the eleventh year it would be paying 100 percent of the property tax.
At this morning's meeting, the IDA considered three possible PILOT agreements: the one proposed by Hudson Mansion Partners; the "HIDA Hotel Model," based on previously approved PILOT agreements for hotels in Hudson; and a third plan, which provides a tax abatement to the applicant that is greater than the HIDA Hotel Model but less than what was sought. In the end, the IDA opted for the third plan. Below is the payment schedule in the resolution that was passed.
Campbell noted that Casetta has never requested a PILOT in other places where they have developed hotels. (Casetta has five hotels in California and one in Taos, New Mexico.) Gallo told her that in all the other projects they purchased existing hotels and redeveloped them. This was the first time they were adapting a historic building. He told the IDA they were facing "unprecedented increases in construction costs" and suggested the construction costs would not have been so high "if the Planning Board hadn't taken two years to approve this." Martin, who serves on the Planning Board, took issue with that statement, denying that the review had taken two years. In fact, the application for site plan review was presented to the Planning Board in December 2022, and site plan approval was granted in June 2024.
During the discussion that preceded the vote, Morris, who voted no on granting a PILOT, spoke of "the assumption that no other developer will come in and do anything with the building." (The building has been vacant or underutilized for close to twenty years.) Campbell spoke of the highest and best use of the building, asking, "What is that property going to become?" She opined that, if it were redeveloped for housing, it would be "very high-end housing that wouldn't help with our housing issue." Campbell also said the increase in lodging tax from the hotel would be "a significant boost to the city." Millar concluded the benefit to the city greatly outweighs the cost.
Mike Tucker commented, "The IDA has seen developers that don't have the wherewithal to complete a project, but these people do." It is not clear, however, given that the benefits of the PILOT being offered are less than what were requested, if the project will move forward.
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Casetta Hotels is known for developing exceptional properties in highly desirable destinations, and Hudson should consider itself fortunate to be on their radar. A quick look at Casetta’s portfolio—Palm Springs, San Diego, Taos, Malibu, among others—makes it clear that Hudson is not typically mentioned in the same conversation as these affluent, design-forward cities. That said, Casetta’s involvement presents an opportunity for Hudson to rise above its usual standard of mediocrity.
ReplyDeleteThe approval of the revised PILOT is a welcome decision. Increased visitation translates directly into economic activity, tax revenue, and broader financial benefit for the city—outcomes that are difficult to argue against with a straight face.
Finally, a gentle reminder to Hudson: tourism is not optional. The city’s vitality depends on visitors. Rather than resisting them, it would be wise to embrace them, welcome them, and—most importantly—learn how to benefit from their presence.
How on earth could the Assessor have been against the PILOT while the Treasurer/CFO was for it? Shouldn't they be expected to be on the same page?
ReplyDeleteWe don't know what the assessor wanted. She wasn't there.
DeleteOops! I'm not surprised Cheryl wasn't at all involved. She's never in her office. Does she live in Hudson?
DeleteWell, it doesn't bode well that our future Council President and CFO voted differently.
ReplyDeleteTourism and hospitality continues to be the most vulnerable part of any economic base. Continuing to put that at the forefront of our fragile local economy is shortsighted and foolish. Take an economics course. This isn’t the lipstick effect.
Tucker must have had some good reason to give a billionaire a discount on a project they have never attempted before, while our neighbors are trying to pay their bills and put food on the table.
Merry Christmas from the IDA, let’s all unwrap our lump of coal.