We wish to reply to the article posted in the Kingston Times paper on Dec. 22, 2011, and the corresponding website on Dec. 27, 2011, regarding the PILOT and taxes for Birchwood Village affordable housing.
Initial planning for Birchwood Village was for affordable senior housing. However, we were asked by Mayor James Sottile to reconsider and instead to build affordable housing for workforce families, veterans and people with disabilities. This kind of affordable housing requires a community’s support, not just to build but also to maintain affordability. The Kingston City Council at the time approved a PILOT agreement as a way to maintain affordability for these residents, none of whom earn over 60 percent of the area’s median income, and many considerably less.
In discussions with former IDA president Chester Straub, he suggested that we pursue this work-force housing in association with the IDA. He explained the IDA recognized that work-force housing would be an economic driver, helping entice employers to the area, and offered a PILOT as well. In response Birchez paid over $100,000 in inducement fees to the IDA and its attorney fees, although we did not utilize IDA bonds as a method of financing the project.
We cooperated with both the city and the IDA in the creation of Birchwood Village, the first and still only workforce housing in the County. With two PILOT options before us, we choose the IDA PILOT. Unfortunately, the flawed assessments that were set by the City of Kingston’s prior assessor resulted in payments that, even under this PILOT, will not sustain affordability.
The reported amount of payments due in lieu of taxes is based on an unlawful assessment by a former City of Kingston assessor who refused to follow the New York State Real Property Tax Law (RPTL) in reference to affordable housing projects. As a result, we have legally challenged the PILOT bills from 2009 on. Once the Kingston revaluation hit in 2008 it became clear that the taxes on the property were considerably more than could have been anticipated in estimating a PILOT payment; considerably more than the New York State Division of Housing & Community Renewal approved budget called for; and considerably more than the ability of the state rent-controlled Birchwood Village complex to pay. As a result of the acknowledged flawed revaluation, the assessor had raised the Birchwood Village assessment valuation by nearly double.
Currently the relative assessed value of Birchwood Village exceeds that of market-rate apartment complexes in the City, some with swimming pools and tennis courts. Under the PILOT agreement, the land on which Birchwood Village is situated is taxable. Although this is a flag lot near the railroad tracks, next to public housing and next to an abandoned armory, on a per acre value it is assessed higher than apartment complexes on Washington, Hurley or Fairview avenues — again all market-rate apartment complexes. In addition, there is a great disparity when unit values at Birchwood Village are compared with apartment values in other affordable housing complexes such as Yosman Towers (see chart). This, Birchez believes, speaks to the issues we, and others, had with the prior assessor.
Over two years ago, Birchez asked for assistance from the IDA attorney and Lance Matteson, president of the IDA, to append, that is to have them clarify, not change, the PILOT. We asked for instructive language that the 581(a) section of the RPTL be applied to calculate the assessed value upon which the PILOT would then be determined. The statement that we “would pay no taxes” under current RPTL — attributed to IDA Chairman David O’Halloran in the article — is incorrect. In fact, prior to the initial IDA Board meetings on the issue, we had shown, in a presentation to Mr. O’Halloran, the PILOT amount Birchez legally owed.