Lead project manager for Pennrose, LLC, Will D’Avella led the Ulster County Legislature through a video presentation last Wednesday on the 164-unit Golden Hill apartment complex in Kingston. An endless rising four-chord progression of synthetic plucked strings provided lift for his narration.
“If you head to the right,” said D’Avella, “you have the senior building .… a four-story building of 80 units of affordable senior housing …. Moving around, we have the collection of townhouses, two or three stories. and then to the south side a four-story family building that will provide new affordable and mixed-income housing as well.”
Here were the center green, the outdoor exercise equipment, and the connection to the New York State trail winding through the woods. Here was the rooftop deck furnished with rocking chairs to take in the view of the Catskills.
Here was the Family of Woodstock supportive-services office, attentive to the needs of the frail elderly while ministering to those who had survived domestic violence.
“Hopefully, that added a little bit of life to the site plan,” concluded D’Avella as he cut the music. The legislative chamber returned to its accustomed silence punctuated with rustling papers and squeaking office chairs.
“I think that’s all,” D’Avella added. “Thank you.”
The fact sheet handed out to the legislators pegged construction costs at $51.8 million, soft costs at $17.1 million, an acquisition fee of $1.85 million, and a developer’s fee of $9.5 million. The cost of this affordable-unit paradise had climbed to $80.2 million, very close to a half-million dollars per apartment and the varied services provided with it.
Intergenerational housing for seniors “to age in place.” “Deeply affordable units” paired with supportive services. A daycare facility open to the public creating “a healthy, moving. multimodal community.”
D’Avella had presented a jargon-thick, net-zero, 100-percent-electric vision of an affordable-housing paradise.
The reality is years away.
Emergency housing needed
At this urgent moment in the housing crisis, a truism is often utilized of the absolute necessity of the creation of more affordable housing. Not to do so, it has been patiently explained to those taxpayers skeptical of the value received when compared with the resources spent, would be inhumane or negligent.
County executive Jan Metzger spoke along these lines when she delivered her opening remarks emphasizing that that the county was in a dire situation.
“The housing crisis is only growing worse,” said Metzger. “In June and July alone, the number of people needing emergency housing grew by close to 100 people, which is a dramatic increase on top of the 300 to 400 the county has been seeing.”
According to Metzger, the average length of stay for families in emergency housing has more than quadrupled since 2021. It was previously four months. The average time is now 19 months.
“Beyond the terrible human toll this takes, this increase in demand also increases financial costs for the county. The only sustainable and really humane solution for us,” Metzger said, “is to expand the supply of housing and permanent options for people to move into.”
Metzger said that the Golden Hill project will be a huge step forward for the City of Kingston. Over half the unhoused residents the county serves in emergency housing are from Kingston.
Statewide lottery for 116 units
The county executive’s statement did not lack empathy for those suffering. However, its inference that the Golden Hill apartment complex will address the plight of those currently unhoused in numbers meaningful enough to affect the crisis in Ulster County is questionable .
In exchange for state funding, 70 percent of future Golden Hill tenants must be selected from a lottery open to all residents of New York State.
“Thirty percent of these units are targeted to this local community,” explained D’Avela. “That’s 48 units which are going to be pulling from the local people staying in motels and emergency-housing situations. The other 70 percent will have to go through the lottery.”
County legislator Joe Maloney called attention to this aspect of the development during the Q&A with the representatives of Pennrose after the presentation. Legislators Eric Stewart and John Gavaris followed suit.
“If you were to say, ‘we’re not going to do a lottery system’,” asked Gavaris, “how much of the money actually disappears, approximately?”
“It would totally change the nature of the project,” responded D’Avella. “It’s an absolute requirement to conduct the lottery to work as an affordable-housing project in the State of New York.
“It’s the $28 million on the slide,” added Dylan Salmon, regional vice-president for Pennrose. “That was the financing. Plus the bonds. And the tax credits .… We would be talking about a $28 [million] plus the $3.1-million gap.”
The project has become more expensive than first anticipated.
Acknowledging that the project still had challenges to overcome, Salmon said the funding shortfall didn’t worry him.
“Whether that’s through grant dollars, whether that is through private fee monies, through banks, and through investors, that’s where we’re spending a lot of time. We cover the nut to get to closing,” Salmon explained. “In the past two weeks, we’ve submitted $25 million worth of financing applications to the state, which would hopefully more than address that $3-million gap.”
Filling the financing gap
The real issue in any project, said Salmon, is that time keeps ticking away.
“The investment thesis in affordable housing is not so much the rents that are coming off them,” said Salmon. “But it’s the creation of that low-income-housing tax credit, which only really takes effect once a qualifying household is in the unit at the end of the day — that the viability financially of the project is that steady stream of credits. These are projects that throw off only a couple of hundred dollars per unit per year.”
Maloney wanted to nail down exactly how much profit the individual units generated per year. Salmon’s estimation grew by more than $500.
“It’s $750 per unit per year,” clarified Salmon. “So roughly $62 a month.”
Or a total of $123,000 a year, assuming maximum occupancy of the rental units.
Forty-year Pilot sought
Legislator Kathy Nolan asked when the housing might be available for occupancy. D’Avella said that it was hoped construction could begin in the first quarter of next year, and that apartments would be ready for move-in for the summer or fall of 2025.
An element Pennrose considers essential drew ire from Maloney. Pennrose is seeking a Pilot, a payment agreement made to lower property taxes.
“I know you have to guarantee yourself profits,” said Maloney. “You guys are running a major corporation, and you’re not going to enter into something that you could take a loss on. But at the end of the day, we’re going to move a bunch of people from out of town in through the lottery. We’re not going to give our school district much money. And we’re going to send a bunch of kids in there.”
Pennrose has estimated another 50 children could be introduced into the school district from the Golden Hill complex. As part of the development deal, Pennrose would start paying $350 per dwelling unit per year, or about $30 a month per unit, beginning the first calendar year the tenants have moved in. That initial amount would be increased by two percent a year for the length of the Pilot.
Based on filings with the New York State Education Department, at least estimated $20,000 a year is required to educate each individual student introduced into the local school district.
Pennrose is pursuing a 40-year Pilot.
In a September 27 letter last year written to Kingston mayor Steve Noble, Salmon said the school district had reviewed the project and determined it would not have an adverse impact on the district’s capacity.
In an email response a few days later, Kingston’s schools superintendent Paul Padalino termed Salmon’s assertion “incorrect.”
In Ulster County, the long and difficult arc of project development bends towards private developers partnering with non-profits. Family of Woodstock is the 51 percent operating partner at the Golden Hill facility.
The legislature has already signed off on everything Pennrose required. Whether Pennrose covers the $3-million gap without seeking additional financial support from the county remains to be seen.
Under a 30-year agreement, the Golden Hill facility will serve tenants from the extremely low income, very low income, low income and moderate income tiers.
“Every night I’m kept up worrying about the emergency-housing situation,” said Metzger. “I believe it’s the only project like it in process at this level of affordability. It is our best near-term solution to reducing the need for emergency housing.”
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