BY CRAIG FREILICH
North Country This Week

POTSDAM -- The village Board of Trustees has approved the 32-year $2.1 million Payment in Lieu of Taxes (PILOT) plan for the Vecino Group's "The Quarry" project to remake Clarkson University's Old Snell Hall downtown classroom building into affordable apartments.

Before the vote, the village changed its resolution after it learned that the PILOT document approved last week by the town government and the school board contained flawed language which would force them to vote again on the PILOT for it to be approved by the county Industrial Development Agency, the sponsor of the plan.

A local landlord objected to Vecino's plan, which he sees as competition that is getting a tax break that he will not have when he purchases an apartment building on Market Street.

Approval by all four taxing entities who will be affected by the PILOT -- village, town and county governments and the school board -- is required for the tax break to proceed.

The village board learned of the flaws in their resolution from attorney Kevin McAuliffe of the law firm Barclay Damon, which is advising on the matter. It is believed that the Town Council and Board of Education will have to take a revote on a revised resolution.

The board approved the revised resolution on a 4-0 vote, with trustees Abby Lee, Maggie McKenna and Alex Jacobs Wilke voting for it along with Trustee Steve Warr acting as deputy mayor in Mayor Ron Tischler's absence.

The confusion over the measure's language apparently stems from the non-standard agreement that this PILOT is operating under.

A standard agreement, according to county IDA CEO Patrick Kelly, calls for a 10-year PILOT payment plan, usually in behalf of an industrial developer.

The plan by the Missouri-based Vecino Group, a developer of affordable housing depending on federal and state assistance, calls for an extended term allowing 32 years to pay $2.1 million under the plan.

Nicholas Zirn, a local landlord who said he was representing a group of landlords who hold about 200 rental units in Potsdam, objected to reduction in property tax for Vecino.

He told the board that he is about to purchase North Country Manor at 100 Market St., and he will be paying taxes based on assessment, which he believes will be driven higher after he makes improvements there. He called the PILOT "an insult" and "an injustice" since Vecino should be paying "$750,000 a year at fair market value" while Vecino will pay $50,000 in the early years of the PILOT, "less than 10%" of what they would pay without the PILOT.

Vecino will pay $119,774 in the first year of the agreement, nothing in the next year, then $50,000 the next year, the rate rising by 2% a year until the end of the term.

The project is not a standard commercial enterprise, but is structured to be non-profit, taking in rents to pay the cost of the project.

The plan is for 59 apartments affordable to households with incomes below 60 percent of the area median income, along with the other features, such as a hub for the arts housing SLC Arts and a community theater, as well as the Shipley Center for Innovation, a Clarkson University business incubator.

Of the 59 apartments on four floors, 30 will be studio apartments, 21 will be one-bedroom, and eight will be two-bedroom. One of those apartments will be reserved for the superintendent. The apartment area will include a community room and a library lounge.

The project will make for about 50 jobs during construction and two permanent jobs for apartment management.

The $15 million project got a major boost last May when a $5.6 million grant of loans and tax credits toward the total cost was awarded for the project by the state from a pool of money from New York State Homes and Community Renewal earmarked for building or preserving affordable apartments and revitalizing communities.

The Vecino Group plan also includes installation of new mechanical and electrical equipment in Old Snell Hall.

The Vecino Group specializes in developing affordable apartments around the country, taking advantage of various federal and state grants, loans and operating subsidies.

Of the Potsdam project, they say the budget is "tight," so without a tax abatement through a PILOT, the project would not be viable, according to Vecino.

The company has agreed that if the rents they receive are substantially higher than their projections, then they will make higher payments.

There have been several attempts to have Old Snell refurbished, which has sat empty for years, but financing difficulty spiked those efforts.