Village of Saugerties trustees have been asked to agree to a Payment in Lieu of Taxes (Pilot) extension for the Mill, an 89-apartment unit complex on East Bridge Street.
Saying he was “coming hat in hand,” Mill owner Mike Puntillo told trustees at their March 7 meeting he was looking to refinance the original construction loan for the affordable senior housing complex at a more advantageous rate then when he took out the original loan 17 years ago.
He has proposed making payments of $40,000 each year for the term of the program rather than paying property taxes and increasing that amount by two percent every year after the initial payment. A Pilot extension would affect not only village and town taxes but school taxes and county taxes as well.
His original Pilot called for Puntillo, who built the senior facility in 1998 and 1999 and opened it in 2000, to pay a flat fee of $35,000 as well as some property taxes. His original loan, which came through a state program at 6.57 percent interest and that rate “floated,” he said. He is now working through the Federal Housing Authority’s HUD program where he has been promised a fixed rate of 4.25 percent on a 30-year loan.
The original Pilot was for 30 years. It has 15 years left. Puntillo said he wants to refinance for 30 years, and HUD wants a written guarantee that the new Pilot will be for the 30-year term of the loan.
The only governing bodies that can grant a Pilot agreement are those that have a tax assessor. The town of Saugerties has one. The village has no assessor of its own but uses the town’s.
The original Pilot went through the town, however. According to Frank Orlando, the town assessor, the town is giving the authority to the village to be the lead agency on the new request, something trustees at the Monday-night meeting said they wanted, since the property is in the village.
Puntillo had gone before the town board several months ago and promised to pay a fee of $35,000 each year on a new Plilot and increase that by one percent every five years. He has now increased his offer to $40,000 and two percent each year.
He added that he would invest $600,000 in the Mill in the first six months to repave the parking lot and sidewalks, construct a new entrance into the building, and upgrade the balances on all the windows. Puntillo said that wherever possible he would use local companies to do the work, “which would economically benefit the area.”
He also said he would upgrade the lighting in the parking lot and around the building to energy-efficient LEDs.
Trustee Patrick Landewe asked Puntillo for drainage work on the parking lot and property. During large storms, particularly Irene, water runoff damaged Tina Chorvas Park, Landewe said, which sits below the Mill property.
“We’d be happy to address that,” Puntillo said.
“So you want us to extend this Pilot out to 2046?” asked trustee Donald Hackett.
Puntillo replied that that’s how long HUD is asking for.
“This new Pilot has the potential for the village and town to receive less tax dollars then the current Pilot brings in,” trustee Terry Parisian noted.
“We’re only making about a two percent profit,” on the Mill each year, Puntillo, said. “We’re not getting a lot of money out of the project.”
“What will you do if you don’t get the Pilot?” asked mayor William Murphy.
“I have limited options,” Puntillo said. “I’d probably put the property up for sale.”
Puntillo explained that the underwriter on the loan, Bank of America, will be applying for the loan through HUD, and “HUD will not close on this without the Pilot.”
The village trustees will take up the discussion again at the March 18 meeting. They want to look at the information and the proposal, and they want to talk with their lawyer.
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