The Ulster County Industrial Development Agency voted today in favor of property tax breaks for the Kingstonian, paving the way for the large Uptown mixed-use residential, commercial and parking garage project to move forward after years of review.
The Industrial Development Agency (IDA) voted 4-1 to approve an agreement that would save developers $26.2 million in property taxes over 25 years and also includes a $1.4 million waiver from local sales and use taxes and a $325,000 exemption from mortgage recording taxes.
The tax agreement, or PILOT (payment in lieu of taxes), was previously approved by the Kingston Common Council and Ulster County Legislature, but rejected by the Kingston Board of Education. The IDA, which makes the final call on PILOTS, factors in the views of affecting taxing entities but unanimous approval isn’t required.
“It’s an internal policy to get the approval from all three taxing jurisdictions before doing any Pilots or incentives for housing projects,” said IDA Chief Executive Officer Rose Woodworth in December. “But it’s not a New York State law.”
The Kingstonian is a mixed-use $55 million development project proposed for the site of a former parking garage off North Front Street in Uptown Kingston that includes a 143-apartment complex, 32-room boutique hotel, 8000 square feet of commercial/restaurant space, a pedestrian plaza, a footbridge to the Kingston Plaza, and a parking garage with 420 spaces (277 public).
Project opponents say the apartments are “luxury” housing that aren’t affordable for local renters (monthly rents for one-bedroom units are expected to start at $1650 and $2200 for two-bedroom units) and say Kingston (Uptown in particular) is experiencing a real estate boom so there’s no need to offer large tax breaks to spur development. Supporters point to increased jobs, additional public parking, and the fact that while the project includes tax breaks, most of the property now is a city-owned parking lot that pays no taxes, so it’s still a net increase for the tax rolls.
“The board has reviewed this project for many, many months,” said IDA member Richard Jones during this morning’s meeting. “[We’ve had] discussions with the applicant, ourselves, and a public hearing. It’s my view that this project will be a boon to the City of Kingston and the larger community of Ulster.”
Additionally, the IDA highlighted a “description of the expected public benefits” of the Kingstonian, which include the creation of 40 full time permanent jobs by the end of year two following completion and 150 full-time construction jobs, the estimated value of tax exemptions with $1,480,000 in sales tax, $24,744,529 in real property tax exemptions and $325,575 of mortgage recording tax exemption, and the likelihood of the project being completed in a timely fashion. The resolution also mentioned that the Kingstonian will be within ¼ mile of public transit, is in an “economically distressed area” and asserted that this is a “needed service in Ulster County.”
Proposing the project are Kingston Plaza owner Brad Jordan and Poughkeepsie-based developer Joe Bonura Jr. They originally proposed the project a $28.2-million reduction in property taxes over 25 years, a $1.4 million waiver from local sales and use taxes, and a $325,000 exemption from mortgage recording taxes. This agreement was renegotiated following an analysis by the National Development Council, which reduced the value of the property tax breaks and included provisions that could lessen the tax breaks further if revenues for the project exceed expectations. No other changes were included in the revision.
Approval of the tax breaks was needed for the project to be feasible, according to developers. The project still needs site-plan approval and to secure financing. It also faces a lawsuit seeking to overturn a planning board ruling that it would not pose a significant environmental impact on the area, a decision that significantly reduces the scope of the review process. That suit was filed by Neil Bender, a real-estate investor with extensive holdings in Uptown.
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