Potsdam residents speak out at public hearing against PILOT tax break for 300-student housing project
Thursday, July 5, 2012 - 5:08 pm


POTSDAM – Residents and landlords today raised more objections to property tax breaks for a proposed college student housing project, adding doubt to the success of the plan.

Nearly 40 people attended a hearing on a tax abatement plan for Chason Affinity Companies, LLC of Buffalo, which has proposed building housing for 300 people on lots across Outer Main Street from SUNY Potsdam.

The project, aimed primarily at college students, has drawn fire from landlords and others in the community. It has also run into resistance from two of the three government boards with a stake in tax revenue and who would have power of approval over the tax reduction.

Landlord Will Dailey said he objected to taxpayer money being given to private business, “and I can’t stomach it any more.” He feared for the livelihoods of some landlords.

Dailey’s wife, Luke, said such an agreement would be promoting “unfair competition.” She also said that if there was any shortage of housing in the community, it is not in student housing but in housing for professionals.

Potsdam Town Councilor Judy Rich, who voted against the tax abatement plan at the recent town board meeting, said she has heard concerns from businesspeople and taxpayers.

She said she was not against development, “but I don’t think development at any cost is a good thing. I think we’re being taken for a ride on this.”

Rich also said that Affinity has a record of challenging assessments as soon as initial assessment agreements expire, adding legal expenses to municipalities’ costs.

The tax abatement plan, characterized as a “payment in lieu of taxes” (PILOT) program, would offer a reduction in cost for the developer as an extra incentive, beyond any profit, to make the investment.

In return, the municipality would get a substantial project on the tax rolls, with the promise of higher property tax revenues after the PILOT expires.

But more than one landlord wondered if anyone, before the PILOT was drawn up, had analyzed the potential impact on the tax rolls if local landlords went out of business because of the presence of 50 new buildings, each building with two apartments, each apartment designed for three people.

“Assessment officials in the village might have some insight into that,” said county IDA Executive Director Patrick Kelly, who chaired the hearing, and who will administer the PILOT.

The Potsdam Village Board of Trustees recently agreed to the PILOT. It would freeze assessment of the estimated $15 million to $18 million project at about $5.5 million for 11 years while the company pays a fraction of the property tax due at first, increasing gradually over the 11 year term.

Next, in a 2-2 tie with Supervisor Marie Reagan abstaining because she is a landlord, the Potsdam Town Council voted down the plan. Then, the Potsdam Central School Board of Education tabled the matter for the time being because the town board action effectively killed the plan.

Some at today’s hearing said they believe temporarily negating property taxes and other fees on a project that will compete with local interests and send profits out of the area is not sensible in a town where much of the property is already tax exempt and where so much of the local economy depends on housing for students in private buildings in town.

“Why should I subsidize you?” one speaker asked of Chason Affinity CEO Jeff Birtch, who was there in behalf of the company. “I can see I won’t win that debate today,” Birtch replied.

Many of the statements and questions were of a similar nature.