Kingston Common Council members voted 8-1 on Aug. 4 in support of a 25-year payment-in-lieu-of-taxes agreement for the Kingstonian, a mixed-use apartment, commercial and parking project proposed for the site of the former parking garage between North Front Street and Schwenk Drive. The agreement will now move to the county’s Industrial Development Agency for consideration on Wednesday, Aug. 12.
The agreement has been modified since it was discussed last week before the city’s finance and audit committee. The property tax for the first year will now be $40,000 rather than $28,488 and increase by three percent annually, and the profit-sharing with taxing authorities (including the county, city and school district) was bumped up from three percent to five. Renters of the 14 affordable units will have their cost for a dedicated parking space cut by 50 percent, and those units will remain affordable for the life of the project, rather than just the length of the PILOT agreement. Unchanged are other amenities, mostly in the category of public access, including the pedestrian plaza, foot bridge, and public bathrooms; they are additionally pledging to make a significant number of parking spaces available to the public for paid use. Developers will also provide two paid internships for students and fund a scholarship over 10 years.
Council members praised developers for being willing to continue to negotiate additional terms until the last moment, with Michele Hirsch, a “nay” vote last week, saying she was “very pleased with the process.” The elected representatives were focused largely on the increased availability of parking—central to the request for proposals which brought this project to the fore—as well as the anticipated indirect economic benefits for the uptown area.
While there were no votes in opposition, that isn’t to say that no one in the community has misgivings about tax breaks for this project. Some of the concerns that were expressed by a number of residents in written public comment were laid out last month in kingstoncitizens.org blog post. According to that post, many of the financial projections have been classified as trade secrets and kept from public scrutiny, and the parking needs of the project are not yet clear. In order for 277 spots to be available for paid use by members of the public, only 143 would be reserved for residents and business uses. However, the blog post author suggests that under current zoning code, the apartments and hotel rooms would themselves require 277 spaces, which would undercut the value of the central public benefit parking. In any case, the spots available to the public will result in revenue for the developer, rather than the municipality.
In that post it’s noted that developers justify paying a lower amount of school taxes than a project of that value would otherwise pay by predicting few schoolchildren will live in the project; the unnamed author writes in response, “Is education not a public good to which we all have a responsibility to pay? On this logic, those without children in the public school system should not be required to pay school taxes. Yet we pay school taxes irrespective of whether we have children who attend public school because we all benefit from an educated populace.”
It appears all of the 45 comments in opposition were identically worded, and since officials holding a public hearing are expected to consider the weight rather than the volume of testimony, that may have factored into the decision to support the PILOT. The boilerplate comments include the phrase, “In the midst of a financial crisis, the substantial loss of $30.6 million in tax receipts will have a profound effect on the community.” (That figure refers to the difference between what the project would pay with and without a PILOT agreement.)
Alderman Jeffrey Ventura Morell echoed some of those concerns. Though he voted in favor, he called on developers to release more information about project finances and parking needs.
Tony Davis, an outspoken supporter of the project, referenced how contentious the process has been. He said he’s received many “nasty emails” as a result, but “when you start attacking my wife when she’s out in public, that’s crossing a line.”
Steven Schabot recused himself because he is an employee of Herzog Supply Co., the principal of which is one of the partners in this development. His recusal was marked as a “nay” vote due to council rules. He remarked at the meeting that he didn’t see this as a problem, but recognized that there is a perception of a conflict of interest.
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