KINGSTON, NY – The school district trustees have voted against tax breaks for the Kingstonian Project.
The 6-3 vote against the request to pay taxes instead of taxes was held Wednesday during a video conference by the Board of Education. Board members James Shaughnessy, Robin Jacobowitz, Herbert Lamb, Priscilla Lowe, James Michael and Kathy Collins opposed the tax breaks, while Suzanne Jordan, Nora Scherer and Steven Spicer were in favor.
Ulster County's legislature approved the PILOT deal on November 17th. The Kingston Common Council had signed a previous PILOT deal but is now required to sign it on revised terms before being voted on by the Industrial Development Agency, which has the final say, on all of these agreements.
Several board members saw the biggest problem as income lowering the district's tax limit.
"This particular PILOT with its 25-year lifespan is far too long," said Jacobowitz. “25 years is roughly two generations of students. If approved, our communities would shoulder the burden of taxes that have not been paid on the full value of the Kingstonian for 25 years. "
The proposed $ 54.89 million Kingstonian would be a mixed-use retail and residential project with developers looking to reduce property taxes for schools, counties, and cities by $ 26.15 million. In 25 years, it would still pay $ 2.7 million in school taxes, but the savings would be $ 17.49 million.
Problems for the district include the impact on annual budgets falling below the tax limit.
"All PILOTs will reduce our ability to collect taxes in the future, which means that the negative effects of a PILOT will persist beyond the time the PILOT sunsets occur," Jacobowitz said.
State law determines allowable tax increases based on the estimated property value and then reduces the amount of the increase by deducting additional sources of income. Under the proposed arrangement, Kingstonian's valuation would keep increasing, but the amount he would normally pay as tax would not be calculated accordingly and would instead become a source of income.
"While other communities have the ability to collect donations in other ways, such as sales tax, school districts only have one levy," Jacobowitz said. “In addition, school districts are the only tax jurisdiction that needs public approval to exceed their tax cap. PILOT programs … affect our ability to raise funds for our children. "
Shaughnessy viewed the deal as a subsidy for developers Kingstonian Development LLC and Herzog Supply Company, but with little redemption value for the school district.
"The developers of the Kingstonian have been telling us all along that the PILOT is necessary for the (parking) garage," he said. "Without the garage, you wouldn't need the PILOT."
Developers plan to use Herzog's existing property on the east side of Fair Street and the city-owned vacant lot on the west side to build a complex of 129 marketable apartments, 14 affordable housing units, and 9,000 square feet of retail space. The plan includes 420 parking spaces, 277 of which are for public use.
Shaughnessy added that "People who live in luxury apartments should pay their full share … of school taxes, just like everyone else."
Board members have been asked by Spicer to postpone a vote in order to get more concessions from the developer.
“I would like to give (Superintendent Paul Padalino) time to meet with developers and pursue a benefit development agreement and possibly receive scholarships, internships, contributions to our music or arts program, and educational materials to help our children with special needs to support in these difficult times. Funding for the district's technical improvement … as part of a final agreement, ”he said.
Spicer noted that the county's industrial development agency can approve the tax breaks without approval from the school board.
"These concessions are small given the size and length of the PILOT," said Spicer. "But if this PILOT is enforced without our voice … we will be confronted with all the challenges of this PILOT and we would not have gained anything else for our children."