The Economic Burden of Downtown New Rochelle
By PEGGY GODFREY
Reaction to the news that a Texas Limited partnership wanted to sell the Avalon 39 story apartment building in downtown New Rochelle was swift. The building had been given a 30-year tax abatement in 2005 by the New Rochelle City Council presided over by present Mayor Noam Bramson and recent Westchester County Democratic Committee designee for Westchester County Executive challenging incumbent Rob Astorino. Holiday Feroglio Fowler LP (HHF) is putting up the 588-apartment building for sale; it has a 98% residential occupancy rate. The 7,807 square feet ground floor commercial space has an occupancy rate of only 32%. This circumstance is a disappointment to the New Rochelle taxpayers; the commercial space by staying vacant does not generating tax revenues.
The New Rochelle City Council voted their approval of a 30-year tax abatement for The Avalon’s benefit. The 30-year tax abatement also known as a PILOT (Payment in Lieu of Taxes) is valid through 2035. This means the City of New Rochelle, its schools and library garner diminished tax payments until 2035. The lack of commercial development will also diminish any taxes that were contemplated to be collected. Further, The New Rochelle Industrial Development Corporation tax breaks will not create the jobs promised and fewer taxes will be paid since so few businesses have moved into the still mostly vacant commercial property. What is evident is the number of children whose school costs are not covered in the PILOT. The number of children going to public school exceeded the number projected by the developer. Again, the New Rochelle taxpayers continue to be burdened to shoulder millions of dollars of unrealized but contemplated revenue. 58 children were projected in the original report but there are 146 in the buildings that are estimated to cost the school district more than $3 million a year. The PILOT payment in 2012 was slated to be a bit over $1,100. The lack of jobs created can be greater cause for more scrutiny at the state level by the Office of Comptroller Thomas DiNapoli. In 2010 the NYS Comptroller found the cost per job created by New Rochelle's IDA was one of the highest in New York State, over $30,000 per job.
Another troublesome situation is the approval of the parking variance given to the Avalon East building, the first within the complex, when it was sold to Hartz Mountain. The City of New Rochelle has had many downtown parking problems including some created by the Avalon buildings. With the first building (as will happen with the second Avalon building) the 30 year PILOT will be transferred to the new owner. In effect Mayor Bramson has led the New Rochelle City Council and the taxpayers down a path of deceit and serious financial distress.
City services are being consumed at a high rate in this area of the City, but there is no attempt to alter these PILOT agreements to ask for money to cover the added costs. Certainly the lack of commercial or retail businesses in these buildings is a reason to review the PILOT. Council leadership under Mayor Bramson has been deflective toward remedy and passive in its tendency to mitigate the financial burden. Bramson has not sought answers as to why these downtown developments have not helped the City's economy.
An example, at issue, is the proposed new Monroe College dormitory which gained approval by the Planning Board, whose membership were each appointed by Mayor Bramson. Monroe officials told residents the Monroe dormitories lose money. An unanswered issue is if, or whether tax certioraris assessment valuations will be used to challenge the city after the dorms are built? Neither was the affect of students not needing the Avalon buildings after the dormitory is built. Will the Avalon building continue to be at 98% occupancy and / or will there be more small or one-parent families with children who will move into these Avalon apartments? The concern is whether such a circumstance will exacerbate the already financially strained school district and do so further.
The conclusion New Rochelle taxpayers are deducing is that since no safeguards are built into the City Council, Planning Board or IDA agreements, the homeowners will continue to be unfairly coerced into shouldering the financial burden once again.
Peggy Godfrey is a freelance writer and former educator.
