JAMESTOWN – The Chautauqua County Industrial Development Agency has given its approval to extending a tax abatement package to a downtown property owner for an addition seven years.
On Tuesday the board voted 8-0 in favor of the extension on an original 10-year Payment in Lieu of Taxes (PILOT) agreement with Millennia Housing Development, the owners of Covenant Manor in downtown Jamestown.
Covenant Manor contains 88 apartments in the eight-story building, located at 23 W. Third St., which provides housing to low-to-moderate income seniors. The building has an assessed value of $3,065,000. Millennia was seeking the extension because of financial challenges its encountered while making more than $2.3 million in renovations to the building. When the initial 10-year PILOT was granted in 2012, the reported sum of all renovations was reported to be at $3 million.
As a result of the extension, Millennia Housing Development won’t have to pay full value taxes on the property until the year 2031. The PILOT payments will continue to increase at a 2 percent rate for the remainder of the initial agreement, up through 2023. Starting in 2024 the seven-year extension will kick in, at which time Millennia will see the PILOT rate increase by 11 percent, through the year 2030.
CITY DEVELOPMENT DIRECTOR AGAIN VOICES OPPOSITION
Prior to Tuesday’s vote on the extension, Jamestown Development Director Vince DeJoy – who also appeared during a public hearing on the issue last week – said the extension would lead to the city missing out on more than $300,000 in anticipated tax revenue. He reiterated the city’s concerns with the PILOT extension and offered reasons why it was opposed to it.
“There’s no additional significant investment or job creation for the development that would warrant the tax payers providing an additional and unprecedented seven-year property tax PILOT extension,” DeJoy said while addressing the IDA board. “It’s not fair to other similar affordable housing developments that pay full taxes, or any other business in Jamestown, or around Chautauqua County, that struggles to pay its property taxes.”
DeJoy also said that Millennia Housing should do a better job of marketing available retail space on the first floor of the building, and that the city would work with Millennia in identifying grant funds to help offset the renovation costs.
Despite the city’s opposition, the IDA board voted 8 to 0 in favor of the extension, although they did amend the abatement to include an 11 percent phase-in each year of the seven addition years. The original extension proposal called for a 7 percent phase-in. IDA Board president Mike Metzger said the board felt Millennia housing deserved the extension for the investment they were making in a downtown property.
“We were very pleased when this company came in and put this property back on the tax rolls,” Metzger said. “They’ve put a total of – between purchase price and improvements – of $4 million into the project. This is, to our knowledge, the only section 8 property that is on the tax roles, all the other ones are off of the tax rolls. And over the 17 years, this company will be paying $905,000 [via a payment in lieu of taxes] that wouldn’t have been paid previously.”
The board’s vote on the extension came after more than an hour-long closed-door executive session, in which members reviewed financial information with a representative from Millennia Housing without any members of the public present. When the executive session finally concluded, no board members commented on or discussed the extension resolution and voted immediately to approve it.
Following the vote, DeJoy expressed his disappointment with the outcome.
“This type of policy needs to stop,” DeJoy said. “Our taxpayers are way overburdened and to allow an extension of a PILOT is kind of an insult to the people who pay what they feel are very high property taxes in this city.”
The existing 10-year PILOT agreement approved in 2012 by the IDA resulted in Millennia Housing Development saving over $1,132,000 in property tax payments between 2013 and 2023. Of that amount, more than $460,000 will be lost by the city during those 10 years. According to DeJoy, the city will likely miss out on an additional $300,000-plus in tax payments during the seven years of the extension.
COVENANT MANOR TAX ABATEMENT SCHEDULE
Period – Year – PILOT Payment
Year 1 – 2014 – $37,847 (Initial PILOT)
Year 2 – 2015 – $38,604 (2% increase)
Year 3 – 2016 – $39,376 (2% increase)
Year 4 – 2017 – $40,163 (2% increase)
Year 5 – 2018 – $40,967 (2% increase)
Year 6 – 2019 – $41,786 (2% increase)
Year 7 – 2020 – $42,622 (2% increase)
Year 8 – 2021 – $43,474 (2% increase)
Year 9 – 2022 – $44,344 (2% increase)
Year 10 – 2023 – $45,230 (2% increase)
Year 11 – 2024 – $48,396 (11% increase)
Year 12 – 2025 – $51,784 (11% increase)
Year 13 – 2026 – $55,409 (11% increase)
Year 14 – 2027 – $59,287 (11% increase)
Year 15 – 2028 – $63,437 (11% increase)
Year 16 – 2029 – $67,878 (11% increase)
Year 17 – 2030 – $72,629 (11% increase)
Year 18 – 2031 – Full Tax Payments Begins