Harrietstown agrees to 30-year PILOT with Lofts developer
Apartment developer would pay $70K base annually with 2% increase for 30 years
SARANAC LAKE — The Harrietstown board this past Thursday approved a 30-year payment in lieu of taxes agreement with the developers of the 70-unit Saranac Lofts apartment complex proposed on Broadway.
Under this payment in lieu of taxes agreement, or PILOT, Kearney Group would pay the town a base of $70,000 for 30 years, with a 2% increase every year, instead of paying full taxes on the property. It’s impossible to know what the property value would be assessed at until the complex is built.
Councilmember Ashley Milne abstained from the vote. She said she did not feel comfortable with the agreement, because she felt the town did not get much say in the terms of the agreement and she would have wanted the PILOT to last for a shorter period of time.
She said the town got involved in the process late, after the terms were set by the state, Saranac Lake village and Franklin County Economic Development Corporation.
“I didn’t feel like we had any negotiating power,” Milne said.
Milne said she knew it would get approved anyway, and that she’s glad the town is getting much-needed housing, but she didn’t want to put her name on approving an agreement she didn’t think was optimal for the town.
Town Supervisor Jordanna Mallach said the actual agreement language has not been drafted yet, so more details, like how the annual payment will be split between the town, village and school, are not known yet.
Town Assessor Marten Tichenor said a PILOT is a way for the town board to support a project they think will benefit the town with a tax break if that project wouldn’t be able to happen without the break.
“I think that PILOT and the whole project with the housing is the best thing to happen to Saranac Lake in a long time,” Councilmember Howard Riley said.
He said the PILOT means the town won’t get as much money as it could if it levied taxes on the property, but that by supporting development on the land, it can get more money than if it stayed mostly-vacant.
“It’s better than zero. We’ve been getting almost nothing from that area,” Riley said.
Councilwoman Tracey Schrader said she would have preferred a 15-year PILOT, around half the length.
“That’s a long time to chain our taxpayers to,” Schrader said.
She wanted Kearney Group to start paying taxes as usual sooner. It’s a for-profit organization, after all, she said. Schrader said she thinks the project is good for the town, but it’s not going to solve its housing problem alone.
Kearney Group Vice President Sean Kearney asked the town for the PILOT in July.
In July, Kearney said it’s likely they’ll break ground on the project in the spring, depending on the weather. He said his company hasn’t closed on the sale of the property yet — in the spring, they’ll close the sale and break ground at same time.
But the town isn’t planning to have PILOT money in the budget next year. Mallach said Kearney Group won’t make a PILOT payment the first year, not until it gets its certificate of occupancy, so the town shouldn’t budget for that yet.
With the 2% annual increase, in the second year, Kearney Group would pay $71,400 — an additional $1,400 from the base. In the third year it would pay $72,828 — an additional $1,428 from the year prior. This would continue for nearly three decades.
The project has been commonly referred to as “artist apartments,” but Kearney told the board his group markets toward a wider group, not just artists, and that the group’s definition of an artist is pretty broad.
Thirty-five units — half of them — would be designated for artists who meet eligibility requirements to live in.
A portion would be rented to people earning 60% or less of Franklin County’s median income — currently $52,905 per household, annually, in 2020 dollars, according to the U.S. Census data.
Others would be rented to people earning between 80% and 130% of the median income.
Kearney said after speaking to the town board last year, his group agreed to reduce the number of artist-designated apartments from 50 to 35, a reduction from 70% of the units to 50% of the units.
Artists get preference, he said, but the units are not set aside for them. So if they don’t fill all those 35 units with artists, it’s not like they’re going to leave them empty, Kearney said.
Kearney said one member of the household needs to be certified as an artist. This could be a child, a student, a partner or a single person. Art does not need to be a full-time job for them, or even a source of income. They do have to show evidence of a body of work and an “ongoing pursuit” of the arts. He said Kearney Group has done a number of these artist community spaces in New York for the past seven years.
The proposed project includes two buildings — The Carry and The Loft.
The Carry would be a smaller, three-story street-side building with a commercial office and seven apartments, built where the current Adirondack Tire building is located. The Carry, a local nonprofit with the same name as the building, focused on supporting start-up businesses, would have a community room, artist work spaces and a residence for a live-in superintendent.
The project has also been awarded $400,000 through the village’s $10 million Downtown Revitalization Initiative grant to outfit The Carry with a co-working space for entrepreneurs.
The Loft would be a larger, four-story structure, holding 63 apartments. This would include 46 one-bedroom units and 17 two-bedroom units.
In July, the project got $6.5 million from the state for affordable housing development.
The project also has been awarded a $100,000 grant through the village’s Energize Downtown Fund, which was set up by the Downtown Revitalization Initiative and is facilitated by the Franklin County Economic Development Corporation.