North 7th St Affordable Housing Project
Review of PILOT Agreement Announced By Hudson Common Council
Independent study will assess the property tax exemption plan for the N. 7th Street Affordable Housing Program.
Hudson’s Common Council President Tom DePietro announced on April 27 that the Council has commissioned the Benjamin Center for Public Policy Initiatives at SUNY New Paltz to conduct an analysis of the PILOT agreement for the proposed Seventh Street affordable housing project. The study is expected to be completed within four weeks, in advance of the Common Council’s vote on the project.
Common Council approval is required before the housing developer can move forward to secure the necessary funding from New York State Home and Community Renewal (HCR), the state’s affordable housing agency.
The Galvan Foundation, developers of the proposed affordable housing project, is underwriting the study.
“The Common Council is committed to increasing affordable housing in Hudson,” said President DePietro. “At the same time we need the expertise of the Benjamin Center to analyze the costs and benefits of the PILOT agreement.”
A tax abatement agreement between the city and the developer, known as a PILOT (Payment In Lieu of Taxes) is typical of affordable housing development projects.
The N. 7th Street affordable housing project’s proposed PILOT agreement covers 95% of the intended square footage, and excludes the remaining 400 square feet of commercial space.
“The Council takes its due diligence seriously,” added President DePietro. “Bringing in the Benjamin Center for an impartial review of the PILOT agreement is part of exercising that responsibility.”
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More about the Project
Currently on the desks of the Hudson Common Council is a proposed resolution entering into a PILOT (Payment In Lieu Of Taxes) with the Galvan Foundation. It would allow them to pursue the financing needed to build more than seventy units of housing at different levels of affordability.
This page collects the relevant documents and also invites further questions and comments from the people of Hudson.
- Galvan Foundation Presentation: 75 North 7th Street Project Overview
- Galvan Foundation summary of its mission statement and accomplishments: Galvan Summary
- Galvan Foundation financial statements in support of their PILOT application:
75 North 7th Street Budget Cash Projection
75 North 7th Street Income Expense Detail
75 North 7th Street Income Expense Summary
Questions and Answers
Following are a series of questions and answers (some edited for clarity) from recent emails from Council members, the public, and the Galvan Foundation:
Could current Hudson residents receive preference for the more affordable units?
Galvan is open to such a preference, if the community calls for it.
Could the number of units below 80% of Average Median Income (AMI) be increased?
The City of Hudson passed a community-driven Strategic Housing Action Plan (SHAP) which identified the need for mixed-income housing. The plan clearly calls for housing that does not concentrate poverty in a single neighborhood. The income mix is designed to further the goals identified in the SHAP.
Why is this plan being presented to the Council at this time?
Both the PILOT and the project itself are in step with the goals and action plan with SHAP, which was ratified by the Common Council more than a year ago. The project is seeking highly competitive state funding. An important scoring criterion is demonstrating project readiness, and the best way to demonstrate readiness is to submit local approvals with the application.
What will be the involvement of New York State?
The developer is seeking funds from the Homes and Community Renewal agency of New York (HCR). They will provide oversight in a number of ways. They will assure that the project conforms to the RFP and design outlines. If the application is funded, the HCR must approve all finance and construction documents. During the construction, HCR will be on-site at least every two weeks to monitor the progress and approve payments.
Is there any other involvement of HCR?
Yes. Before the building is occupied, the office of fair housing at HCR approves the marketing and rent plan. Once occupied, their asset management team makes sure income restrictions are met, finances are properly managed, and tenant issues addressed.
Is HCR the only oversight?
No. The investors and lenders are also involved in creating the documents, monitoring construction, and ensuring occupancy conforms to IRS regulations.
Is there a provision to ensure that tenants are full-time Hudson residents?
Yes. Both state and federal law require that the apartment be the tenants’ primary residence.
If inflation runs at roughly 3% per year, why is this project planning on 2% for its payment increases?
Rent increases are also projected at 2% and do not track ordinary inflation. Other project expenses are projected to escalate at 3%.
Why is this PILOT being considered by the Common Council and not the Industrial Development Agency (IDA)?
Article 11 of the New York State Private Housing Finance Law allows the creation of a specialized not for profit corporation whose purpose is to provide low-income housing. Under this provision, the City is authorized to grant the tax exemption.
Who are the investors mentioned in the proposal?
The developer is pursuing conventional and permanent financing from banks.
Is this an “opportunity zone investment”?
Will the commercial space enjoy the benefits of the PILOT?
No. The four hundred square feet of commercial space will be assessed at market rate, and provide an estimated $16,000 in tax revenue beyond the $77,000 promised by the PILOT.
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Additional Comments (5/26/2020):
1) Do the people currently in need of housing in Hudson (in other words, those our alder-people and mayor, and we have in mind when we call for affordable housing) actually make enough money to live reasonably in these apartments? 2) Can we see a side by side of what people pay in Bliss, the Terraces, places on Columbia St. and what they would pay for a place of comparable size here? If they have a 2 bedroom, a 2 bedroom etc. 3) Alderwoman Garriga talked about people paying $200 a month currently. Are there units at that price point? Will the people she's hoping to see housed be able to afford apartments of appropriate capacity here? 4) How will the building and site integrate, at the planning stage, with the rest of the city's open spaces? What sort of collaboration will be planned in terms of design and urban planning for the open spaces? What sorts of walkable or bikeable access routes to other vital places like the library, Oakdale Lake, the Youth Center, the waterfront, will be planned and built? 5) How will the planning, architecture, and construction of the building move the city forward in terms of walkability, play space, outdoor space, climate resilience? 6) What other community activities will be planned and integrated into the building to ensure its connection to the rest of Hudson?
- Tamar Adler
I firmly believe that this project shouldn’t go forward if the number of units below 80% AMI aren’t increased. I don’t believe this questioned was answered and people needs housing regardless of how the power elite define poverty concentration. Could the number of units below 80% of Average Median Income (AMI) be increased? The City of Hudson passed a community driven Strategic Housing Action Plan (SHAP) which identified the need for mixed income housing. The plan clearly calls for housing that does not concentrate poverty in a single neighborhood. The income mix is designed to further the goals identified in the SHAP.
- Quintin Cross
1) Who set the scope or parameters of the review to be conducted 2) Who determined that the developer be the party who pays for the review of the project 3) Is the Common Council (CC) aware that having the developer pay for the study of the developer's project creates the appearance of a conflict of interest if not an actual conflict of interest, as well as the appearance of impropriety if not an actual impropriety 4) Is it equitable to taxpayers and residents of Hudson to approve a 40 year PILOT on this 77 unit apartment building when only last year the city reassessed real estate of private property at rates of over a 100% increase causing many homeowners and small business owners to suffer an increasingly unsustainable tax burden 5) Will the CC consider the scores of existing residential properties that the developer owns and/or manages in Hudson, many empty, as the answer to the need for affordable housing, instead of building a somewhat mammoth new structure that will require increased infrastructure and use of current resources 6) Is the CC aware that the fiscal future of NYS is uncertain at this time, and that committing to a 40 year PILOT at this time is possibly unwise 7) Why is there such a rush to move forward on such a large project when the citizens of Hudson cannot attend live CC meetings, and are unable to have interactive participation with their elected officials 8) Has the CC not yet heard of Zoom? 9) Has the CC accepted at face value the developer's statement that it has switched the site of the proposed project from a vacant lot to a site where 3 houses stand? The developer appears to contend that this new site is one that can be readied more quickly, however, it would involve demolishing three homes. 10) Does't the C see the discrepancy in the many months long discussions about demolishing 2 houses by Stewarts, and the rush to commit to the PILOT plan which includes demolish 3 homes 11) If the reported statement by the mayor that he does not know the specifics about the developer's other projects, and only knows about the proposed PIOLT is true, what does the CC think this statement means? When proposing to enter into a 40 year agreement, with a partner, it is reasonable to expect that the person proposing the project, here the mayor, would have done his due diligence. Has he?
- Janet Kealy
--I FOILEd the City 7 days ago and rececived no response. Is the City' FOIL officer not working? --Does the Mayor believe that Galvan paying for a so-called assessment of the PILOT program is not a major conflict of interest? --COT program is not a major conflict of interest? --Can such a report be considered "independent"? --How many 40-year PILOTs have been given by the City of Hudson? --How many vacant apartments owned or controlled by Eric Galloway or any of his companies are there in Hudson? How long have they been vacant? --Has the City done an economic analysis of the impact of Gallooway rental rates on the price of apartments in the City? --Has the City done an economic analysis of the impact of the property tax on rental rates in the City? --Has the City done a needs assessment for "affordable housing" in Hudson? --Has the City done a background check on Eric Galloway and his businesses? --Is the Mayor aware that Eric Galloway's business entities are headquartered in New York City? --Does the Mayor know about the court case Baptist Churches v. Galloway? https://www.leagle.com/decision/2000363271ad2d921342 --What's the rush to get this proposal adopted? --It took Stewart's two years to get its tax-paying gas station and store expansion approved. Why does this non-taxpyaing proposal, with an incredible 40-year tax reprieve get rushed through in one month? --And why does it get rushed through when three-quarters of the City of Hudson is shut down? The worst economic depression in 70 years?
- Sincerely peter meyer
How many tenants are there in the existing houses which will be demolished? Will they be rehoused in the new building and will that reduce the number of new units available? Where will the displaced tenants be housed during demolition and construction?
Regarding the PILOT for 7th Street can you clarify that 1) $77K is the annual real estate payment? 2) what are the school taxes for the project? Why are they not included in the expenses? 3) how was the time frame determined? Other PILOTs have much shorter timeframes such as 15 - 30 years.
The PILOT is too long. The project is too large. The taxpayers of Hudson cannot sustain a project that does not pay its fare share of taxes. The tax payers are already stressed from the last re-va. The School is looking for a large increase in School Taxes this coming year asking for yet more money from already overburdened tax payers of Hudson--this 7th Street Galvan project will contribute little to the relief of an already over-taxed ever diminishing group of property owners who pay the bulk of taxes. The water and sewer bills have recently increased for example--will each unit pay the same as all the residents in Hudson? Perhaps such a give away should require the City of Hudson to make serious cuts in the budget. Also tearing down houses to make way for this project seems out of keeping for preservation of the character of Hudson as the comprehensive plans suggest. Plans change that is understandable but the plan has already changed by moving from one side of the street to the other--and the number of stories have changed. Embarking on such a project during the time of a pandemic crisis seems foolish. We have no ability to voice our concerns in person and we are asked to trust that this deal is a sound one--when the council seems like it has been left out of the process. Big housing projects in a 2 square mile city like Hudson seem to be out of fashion--the trend has been to find ways to make the housing stock fit in scale with this little city--80 units in one concentrated space is not in the City's comprehensive plan--if I recall correctly. Quote from the Hudson Comprehensive Plan: Develop a Housing Strategy While many of New York State’s urban communities are struggling with strategies to attract middle-class residents, Hudson has already started to attract this group. The challenge for Hudson is to develop a strategy that continues to provide for an ethnically and economically diverse community. Hudson’s housing strategy should seek to develop a “balanced” mix of housing types that encourages a mix of incomes as well as ethnicity and housing tenure throughout the City. Hudson’s continuing revitalization is likely to coincide with increases in the cost of housing (including housing values and rents). For the most part, this increase in value will be a very good thing for Hudson. However, the challenge for local decision-makers, the business community and neighborhood residents will be to ensure the benefits of Hudson’s resurgence are shared among all community members. Specifically, the adverse consequences of community success (rent increases and displacement of families no longer able to afford living in Hudson) must be anticipated and effectively addressed. A coordinated, multi-tiered approach must be developed involving the City, the private sector and not-for-profit organizations such as Housing Resources. For example, if the fire departments are consolidated in a single facility, the City may consider offering the fire houses as a package for redevelopment. Then the City can require that a percentage of units be reserved for low- to moderate-income residents. The City should also take advantage of the Department of Housing and Urban Developments Hope VI program, which has been developed to help communities rebuild Urban Renewal era public housing projects into mixed-use, mixed-income communities. Many communities are using this program to demolish obsolete public housing projects and rebuilding affordable housing in ways that promote human interaction and public open space. (For more detail on HOPE VI programs see http://www.hud.gov/offices/pih/programs/ph/hope6/) As the City develops its housing strategy, the following should be considered as a framework. 1) Develop a strategy for transferring in rem properties ß Streamline process for transfer of in rem properties to minimize length of vacancy ß Develop proposal process and requirements in line with community vision for neighborhood revitalization ß Develop detailed guidelines for prioritizing proposals/bids for the properties (i.e. ownership tenure requirements, set asides for mixed- income projects) ß Market program to the public *water & sewer bills Fees for these services, PER UNIT---Water & Sewer Rents, are set by the Common Council each year and billed quarterly to owners of the property. Present Rates $49.00- Sewer $61.00 - Water Per Quarter. (Non Metered) Hel
- Linda Mussman
Hello, Thank you for sharing. Why are there no renderings or site plans beyond the sketch up model in wireframe mode? It does not show materials, scale or neighborhood context. I imagine the developer/ designer has drafted site plans that show the building footprint in the context of the neighborhood. They should also have renderings and sections showing the building elevation relative to neighboring properties. The text presentation in ppt is semi helpful but does not show enough of the proposed design for anyone to understand what this looks like. Could we ask the developer to show the drafted plans and renderings in more views and details?
- Britt Zuckerman
I understand the need for affordable housing, but do not feel it appropriate for taxpayers subsidized rents through a PILOT for people making up to 90K a year. Many homeowners make less than this, and your are forcing people of lower income to subsidize rents for people with a higher income than themselves. Also I believe it sets a bad precedent for the city to allow construction of new large scale urban buildings. I would be more in favor of investigating the use of existing buildings for affordable housing projects. The pocket book factory, John L, the apartment building on 5th and Union St could all be good sites. John L is huge, could hold many apartments and would be a fantastic site that has a gym, kitchen, parking lot, etc Why is it necessary to give tax breaks that lead to the demolition of perfectly good houses while we have huge structures sitting vacant? It makes no sense. Other things could be done, increasing the lodging tax and using part of the money to subsidize rents, or giving tax breaks to owners who convert their B&B to affordable housing units. I believe allowing the construction of this large apartment building will only lead the the construction of more buildings and the continued urbanization and congestion of the city which in the long run would degrade the entire community to the detriment of everyone.
- Tim SLowinski
The amount of units in this proposal and its previous iteration seem very specific, is this based on community need or developer profits? Have any studies been performed to quantify the current vacancy rate, existing unused and offline units, or other measures which would validate or inform the scale of this proposal? The existing houses on this street are occupied and in good shape, why is the city of Hudson demolishing existing housing and displacing tenants? What measures will be taken to protect the tenants of these units? The setbacks do not conform to local codes. If this proceeds it has the potential to greatly increase the population of the area, what services will the city of Hudson be providing in response to this (schools, groceries, public transportation, public green space)?
- Maxfield Schnaufer
This project is so very, very wrong in many ,many ways. 40 year PILOT - What ! That's insulting to every property tax payer in Hudson No parking spaces - What ! Hudson has a huge parking problem right now that is being swept under the carpet. Hudson's share of the PILOt is $22,000 per year. I pay over half that amount on my property. And don't forget the economy is in freefall with an unknown recovery time. all projects of this enormous size should be on hold until there can be truly PUBLIC meetings. Finally, does anyone read these? In my experience Aldermen do not respond to their email. Does anyone at City Hall ?
- Pamela Kungle
This new image has dramatically changed from the first proposal, which seemed somewhat fit for the neighborhood. This building is simply too big and ugly. Not to mention the sketchy tax plan. It seems that this and some other architectural plans are too modern and inconsistent with the flavor of Hudson. This image in no way reflects the history and design of the Pocketbook Factory. One of the reasons I moved here was for the charm and architectural beauty of Hudson. I think the leaders of Hudson need to be very thoughtful about approving plans, historically, aesthetically and financially.
- Sher Stevens
Please add questions you have that aren’t answered above. We want to hear from you.