IDA vote on Pyramid request for $1.2M in tax breaks delayed at last minute

GUILDERLAND — About 20 residents had gathered at the town hall Monday night for an expected vote by the Industrial Development Agency on the request by Pyramid Management, owner of Crossgates Mall, for two kinds of tax exemptions.

The vote was postponed.

Also on the agenda was setting a date for a public hearing on a request by Phillips Hardware for tax relief from the IDA.

Pyramid is asking the IDA for $1.2 in tax breaks to build a 222-unit apartment and townhouse complex next to the mall, and Monday the agency’s chief executive officer, Donald Csaposs, had posted on the town’s website his recommendation that the agency deny the request.

Pyramid received over a million dollars in tax breaks from the IDA for a hotel on Western Avenue that opened in October.

On Monday, several residents spoke for and against the tax breaks, and two IDA board members discuss recusal, with one saying he would recuse himself and another saying he would not, when a representative of Pyramid stood and asked for the vote to be tabled.

David Aitken, Pyramid’s director of government affairs, said he needed more time to discuss Csaposs’s recommendation with staff and with counsel. He had checked online numerous times on Monday and had not found Csaposs’s recommendation online, he said.

Donald Reeb, former long-time president of the McKownville Improvement Association, asked the IDA to register his opposition to tabling the vote. Reeb told The Enterprise on Tuesday, “Profit-making enterprises that have an enormous amount of money and are not doing anything special to provide amelioration of social problems should not receive any tax reductions.”

CEO’s view

In his recommendation to deny, IDA CEO Csaposs outlined his reasons in an IDA Staff Review and Recommendation, which he also summarized at Monday night’s meeting.

Csaposs started out by noting some of the positive aspects of the project. It is located within the Transit-Oriented Development district approved by the town in 2018, which grew out of the Westmere Corridor Study of 2016. The TOD calls for denser development in areas that offer better access to public transportation.

A transit center at Crossgates Mall is currently in a design/funding approval stage, Csaposs wrote, with the Capital District Transportation Authority as the lead agency. The project is in keeping with municipal planning goals represented by the TOD, he said, and a market analysis prepared by Robert Charles Lesser and Company suggests that there is sufficient demand for the apartments to be filled.

In addition, the project would provide increased property-tax revenue to the town, the county, and the school district, all of which, Csaposs wrote, are “positives in the broadest sense.”

But anticipated job creation and preservation is the main standard by which the IDA evaluates projects, Csaposs wrote. Pyramid’s Rapp Road apartment-complex project will create 150 short-term jobs in construction, but only six permanent jobs, “all of them at moderate levels of compensation.”

Another important consideration is whether the project addresses a “significant unmet need within the community,” Csaposs wrote in his recommendation. Market-rate rental housing is already available in Guilderland, and additional market-rate projects are in various stages of development in several parts of town. This project has “no unique characteristics,” Csaposs wrote, such as set-asides for moderate-income residents, allocation of units for physically or developmentally disabled residents, or set-asides for housing for veterans, for example.

Finally, the project seems likely to go forward and succeed without IDA incentives, Csaposs wrote.

The public speaks

At Monday’s hearing, two people spoke in support of the project, and four against.

Richard Ruzzo of Shepherd Communications and Security on Railroad Avenue in Albany said that, while some people say that six permanent jobs is not a lot, “Those are six real jobs.” He added the parcel is currently undeveloped, “so it’s not producing a lot of revenue right now.”

Nicole Baldwin of Albany, said that she grew up in this area and, as a child, often played in the Albany Pine Bush. She noted that the project is targeting millennials, which she said is her generation. She added, “I want to make it clear that my generation cares about the environment.”

Baldwin said that $1.2 million, if divided by six for the number of permanent jobs the project would create, equals $200,000 “per job, which is ridiculous.”

Agency Chairman William Young said he had represented Pyramid on a number of real-estate purchases in the past, but had no involvement with the company currently and had never been involved with the purchase of the land in question and said he would not recuse himself. Christopher Bombardier, the agency’s treasurer and assistant secretary, said he would recuse himself, without offering a reason.

The board has four other voting members. The CEO does not vote.

Csaposs said that, in the past, the board has gone against his recommendations “on housekeeping matters such as our fee structure” a couple of times, but not a request for project assistance.

“I am always mindful, however,” he said, “that the final decision is theirs and not mine.”

Seven applicants in a decade

The volume of applications to the IDA has increased in the last couple of years, Csaposs told The Enterprise, as has development activity. “The two trends are linked,” he said.

During his decade or so as CEO, Csaposs said, the number of projects for which a formal application has been submitted and considered, including Rapp Road Apartments and Phillips Hardware — which both have yet to be decided — is just seven.

The projects have been, in addition to the Rapp Road Apartments, Phillips, and Pyramid’s hotel:

— Mill Hollow, in August 2016, was approved for an estimated $181,250 in sales-tax and mortgage-recording-tax exemptions for a project that was to build condominiums for senior citizens near the town hall. The project eventually became apartments with no age requirement;

Promenade at University Place, an assisted-living facility in a converted Best Western hotel was approved in November 2017 for $400,000 in sales-tax exemptions, $320,000 in mortgage-recording tax exemptions, and $32 million in bonds. When the bonds are sold, the interest on them would be tax-exempt. The town’s building department has issued a certificate of occupancy and the facility is set to open shortly; and

— Summit Senior Living, also known as Mill Hill, on Route 155, which received sales and mortgage-recording tax breaks from the IDA of about $650,000 in February 2018 for the last stage of a Planned Unit Development, the construction of a 92-unit independent-living retirement community.

Before that, the only project that made an application to the IDA during his tenure was Hamilton Square, which received net exemptions of $173,000 through the IDA in 2012.

Two other projects listed on the IDA website — the expansion of a building for the Wildwood Program and the construction of a facility for the Western Turnpike Rescue Squad — predate Csaposs, he said.

Phillips Hardware request

The IDA went on to set a public hearing to discuss the application of Phillips Hardware for IDA assistance with a project already underway at the corner of routes 146 and 158.

Phillips Hardware has applied to the IDA for $228,710 in tax exemptions: $188,400 in relief from sales tax, and $40,310 in exemption from mortgage-recording tax.

The company is building a new, larger hardware store with company offices. When the new building is complete, Phillips will tear down the current store and, near Route 146, construct a store with gas pumps.

Jonathan Phillips told the IDA Monday night that his wife was getting involved and the store will be female-owned. He called it “a Phillips general store” and said it will be “a different kind of convenience store.”

Although this was not included in Phillips’ application to the IDA posted online, the attorney representing the project, Paul Goldman of Albany, told the agency that Phillips Hardware would also be asking the IDA for a payment in lieu of taxes, or PILOT agreement.

Csaposs told The Enterprise afterward that he had been informed five minutes before the meeting that Phillips Hardware would be seeking the PILOT agreement.

The Guilderland IDA has granted a PILOT just once in the decade or so that he’s been the CEO, Csaposs said: The Best Western Hotel on Western Avenue, across from the University at Albany, is be converted into an assisted-living facility to include Medicaid-eligible beds and maintain about 40 percent of the facility’s units for low-income residents.

The Guilderland IDA has had only had one other application for a PILOT, from the hotel that Pyramid built in 2018 in front of Crossgates Mall. That request was denied, although Pyramid received other forms of assistance for the project. The Guilderland IDA granted the hotel project just over $1 million in sales-tax and mortgage-recording tax assistance. Pyramid had applied for a total of $2.4 million in assistance, including the PILOT.

The amount of exemptions in a PILOT agreement cannot be determined at the time of an IDA application, but only estimated, Csaposs told The Enterprise, because the amount is determined as a portion of assessed value.

The board is likely to consider the Phillips application on Feb. 25, as well as the Pyramid application, Csaposs said.

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