IDA approves $3.1M in tax breaks for Hiawatha Trails

— From Hiawatha Land Development submittal to town of Guilderland

Hiawatha Trails would host a mostly three-story building — a portion would be four stories — with 256 market-rate independent senior-living units at 6025 and 6051 State Farm Road. The Guilderland IDA this week granted the project $3.1 million in sales- and mortgage-tax exemptions.

GUILDERLAND — The board of the Guilderland Industrial Development Agency on Tuesday granted mortgage- and sales-tax relief to the developer of 256 senior-housing units to be be built at the former Hiawatha Trails golf course, but declined to enter into a payment-in-lieu-of-taxes (PILOT) agreement with Hiawatha Land Development LLC. 

“No Board member offered a motion in support of the PILOT request, which means that that portion of the application failed by default,” Donald Csaposs, the IDA’s chief executive officer, told The Enterprise by email after Tuesday’s meeting. 

Since its founding, in 1978, the town’s IDA has granted just one PILOT request, Csaposs said during the meeting, Promenade at University Place on Western Avenue, an assisted-living facility.

The Guilderland IDA’s recent history “indicates that projects of this nature have been provided with mortgage and sales tax waivers, but that requests for property tax abatements have been declined unless the project contains some tangible benefit for an underserved constituency within the Town such as the set-aside of a portion of the units in the project for affordable housing,” the IDA staff report on the Hiawatha project states. 

Hiawatha Land Development will be receiving about $2.46 million in sales- and use-tax exemptions and an approximately $664,000 in mortgage-recording tax exemption, but not the $1.06 million property-tax exemption it had been seeking. The $2.46 million request was initially $4.1 million, but in a Sept. 20 letter to IDA attorney A. Joseph Scott, the estimate had been reduced by about $1.64 million.

During the Sept. 28 IDA meeting, Csaposs told board members that, after a review of the Hiawatha application, it was determined the $4.1 million figure had been “unreasonable.” That observation was then conveyed to the developer, who returned with the $2.46 million ask.

The IDA staff report said the applicant-provided third-party analysis asserted the estimated $70.8 million project “meets an unmet need for senior housing in the market area…”

“Market area,” in the third-party analysis, appears to be the entire Capital Region. But the IDA staff report notes that “it is necessary to consider demographics within the Town of Guilderland rather than in the market area as defined by the developer.”

Citing data from the Capital District Regional Planning Commission, the report states the number of residents over 55 increased by 2,220 between 2010 and 2020. However, the Guilderland Building Department issued certificates of occupancy for 100 senior apartments during the same period — 92 of which were for the Summit at Mill Hill, “a project offering enhanced amenities and services at rental price points above the standard market level,” meaning only eight senior apartments that came online in the past decade were market-rate units.

An analysis from the developers of Hiawatha Trails placed the market rate for senior housing in Guilderland between $1,600 for a one-bedroom unit and $2,000 for a two-bedroom apartment.

The market analysis from the owners of the Pine Bush Senior Living facility estimated Guilderland market-rate rents at $1,428 for a  937-square-foot one-bedroom apartment and $1,782 for a two-bedroom unit with  1,237 square feet.

Yardi Matrix, an apartment-market research-and-intelligence firm, puts the “average” rent of a 917-square-foot unit in town at $1,279 per month.

The most recent Census estimates, from 2019, show close to 4,900 renter-occupied housing units in Guilderland, categorized into 23 different monthly payment tiers.Nearly 1,900 had a monthly rent between $1,000 and $1,250 — a figure that was double the second-highest number of rental payments, 944, whose rents were between  $1,250 and $1,499.

A “fair-market” two-bedroom apartment in Guilderland goes for $1,207. Fair-market rent is set by the Department of Housing and Urban Development, and used to determine Section-8 housing payments.

“This data supports the notion that this project is responsive to an unmet housing need in Guilderland at this time,” the IDA staff report states. 

The latest development activity tracked by the town, from February, shows that, in addition to the 256 Hiawatha Trails senior-living apartments, 257 units of senior housing have been approved for construction: 65 Beacon Communities apartments on Mercy Care Lane and 192 units on New Karner Road.

The town board recently OK’d the first phase of the Pine Bush Senior Living facility on New Karner Road to switch from 96 market-rate apartments to 86 affordable units. 

Another 84 units of senior housing were under construction as of February, according to the town. In total, 597 units of senior housing were either approved or under construction as of February. 

Additional senior housing would allow a greater number of Guilderland’s seniors to stay in town once they’ve left single-family living, the staff report says, which has the added benefit of contributing to the “economic and social well-being of the community.”

The report says there would also be direct economic benefits associated with the development:

— An $18.4 million short-term construction payroll;

— The creation of seven permanent jobs, with salaries that would generate a total of $2.8 million in salaries; and 

— About $3.3 million in property taxes over 10 years — which was before the $1.06 million property-tax break was taken into consideration, which the developer will not be receiving. 

Per the town’s approval, project engineer Daniel Hershberg told the IDA board in August, the housing will have to be developed in two phases — 130 units would be built first. 

Hiawatha Land Development can’t start the second phase until “significant progress is made” in renting the first 130 units, he said. But Hershberg thinks there would be a market for the rental units and believes there would not be a delay between the first and second phases.

The developer would be seeking a $53 million private loan to finance the project, according to the IDA application, with an expected completion date of December 2024.

William Toffenetti
Joined: 05/11/2021 - 17:50
Affordable Housing for Seniors

I will guess that the rent will be much higher than $1600. What real controls on rent will the Seniors have. These are not apartments for seniors who were either lower income or even middle income people . What the town must realize is that Seniors generally don't get richer as they age. 3.1 million for a rich developer. It makes me sick!!!!

Joined: 07/02/2018 - 12:35
IDA Approval

Four clarifications regarding the report on the IDA approval of tax relief for the Hiawatha developers. First, the upper level of proposed rents is $2,200 PLUS utilities. Secondly, the Capital District Regional Planning Commission report cited by the third party analysis is ten years old. Third, of the seven proposed jobs to be created, only two are full-time. Fourth, the only public discussion by the IDA mentioned land that is proposed to be deeded to the town, an issue that they themselves stated was not to be considered in their deliberations.

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