TUPPER LAKE — The Franklin County Industrial Development Agency board voted to approve a 20-year PILOT agreement for the now-shuttered Oval Wood Dish factory on Demars Boulevard, likely setting the stage for workforce housing development to begin this summer.

The vote was unanimous with one board member, Nate Monette, absent from the meeting, according to IDA CEO Jeremy Evans.

The vote came one day after a public hearing at the Tupper Lake Emergency Services Building that saw around 50 people in attendance. Of the 11 speakers, one was opposed to the PILOT, saying the village and town are too financially strained to lose the tax revenue. One wanted more time to understand the agreement’s details before asking questions and nine voiced support — including some of the community’s most iconic fiscal hawks.

“The fact that Fred Schuller and Dan McClelland both spoke in favor of the PILOT — I was shook,” village Mayor Mary Fontana said. “The two biggest critics in our community spoke in favor of a PILOT.”

A PILOT, or payment in lieu of taxes, is a negotiated local tax break, where the property owner pays an agreed-upon annual sum for a certain number of years instead of the property’s full assessed value. The agreed upon payment, while unique to each PILOT, is a discounted price compared to the full taxable value in exchange for a project having an ostensible benefit to the community.

In this case, that would be the many units of affordable housing, which would be deed restricted and set to varying thresholds of the area median income. It’s a middle-ground of sorts between public and traditional housing, and is meant to provide living space for essential, middle-income jobs like teachers, law enforcement and nurses.

As a public benefits corporation strictly regulated by state laws, the Franklin County IDA is tasked with negotiating, and ultimately deciding whether or not to approve, PILOT programs. Evans said the agency is currently overseeing around a dozen other PILOTS throughout the county, each with its own unique terms.

Evans said the turnout shows there’s a great deal of care in the community, and most comments received showed support for the project and proposed PILOT. He said he understands the concerns of those against the PILOT, but at the end of the day, feels that this is a good project that merits these tax benefits.

“It’s going to provide economic benefit,” he said. “It’s going to provide benefits to people looking for better or more affordable housing. It will clean up and make beautiful that blighted building that’s kind of right in the middle of town and has been sitting there vacant and underutilized for about 15 years now.”

At the hearing, Evans said that the developer is currently slated to start in May, with occupancy estimated to start in late 2027.

“I think we’re all going to be waiting anxiously to see that first sign of movement on that site,” he said.

What’s in the agreement?

The approved PILOT agreement gives the developers — the Syracuse-based Lahinch Group, Housing Visions Consultants Inc. and Braxton Capital LLC — three different avenues of tax savings: property, mortgage and sales.

Over the term of the 20-year agreement, the developers are estimated to save $325,453 in mortgage taxes, $615,357 in real estate taxes between the village, town, school and county and $1,824,811 in sales taxes for equipment and supplies used during construction, only for a total financial assistance of $2,765,621.

This is offset by the annual fixed payments, which sum to $1,942,461 over the 20-year agreement, or nearly 76% of what would have been paid in taxes with no PILOT. Many who spoke in favor at Tuesday’s hearing cited this as a meaningful share the developer would still be contributing.

“The result was right down the strike zone of our policy,” Evans said. “We are negotiating something that does affect taxing jurisdictions and we take that very seriously. We understand that, then we have to balance that with business, and property owners and developers trying to bring investment into our community. You’re caught in the middle of trying to balance different needs and wants.”

He said extensive feedback was gathered from the OWD developers, as well as local government leaders.

“We incorporated feedback from both parties,” he said. “In the end, I think we came up with something that’s still right down the middle of the plate as far as our policies are concerned.”

Evans said that even though 20 years may seem like a long agreement, he said this type of project provided pretty sturdy statutory grounds for the developers to ask for a substantially longer, 30- to 40-year PILOT term.

“In this case, the team understood how important that question was, and we ended up with a 20-year term. I thought that was a good compromise,” he said. “I’m pretty happy with it and excited about them being able to move forward now.”

Though Evans stipulated at the public hearing these are all estimates, and are based on a myriad of factors, such as building costs and future assessments, he was confident that they’ll be accurate, with a lot of planning and cost modeling taken into account while building the agreement.

“It’s a lot of estimates as far as what the payments will actually be,” he said. “But I’m comfortable with them. There’s going to be a lot of verification.”

The IDA’s full cost benefit analysis of the project is available at tinyurl.com/3hm7p7fu.

Public hearing

After reading the required legal notice, Evans moved to address the proposal in “plain speak,” explaining how the IDA arrived at the agreement, how it distributes payments back to each taxing jurisdiction and some project background.

“We’ve got what we think is a good proposal on hand,” he said. “We have a declining population, we have a population that’s getting older, we have a population that’s finding safe and affordable places to live. Our labor force participation rate is lower than it should be. So we know the challenges that we face, but yet we’re all here because we know how amazing this community is.”

Evans said that while nobody “loves” PILOTs, given that they impose a greater burden on the rest of the tax base, it was important to consider the project’s benefits, and adding 80 affordable housing units to Tupper Lake in what would otherwise be a blighted, abandoned building, brings with it a lot of potential, and future improvement to a tax base that has been stagnant.

“To model this out, the total local benefit to the greater Tupper Lake community is $23 million,” he said. “The cost in benefits, basically the cost in (lost) taxes … is estimated at almost $1.6 million, which leaves a very strong, very positive benefit to cost ratio for the project.”

Former village Mayor Paul Maroun was the first to speak. The project began under his administration, and he began by vouching for the developer, citing “fine apartments and condos” that they’ve developed out of old factory buildings in Syracuse and Utica.

“Who wants to buy condos or go into a hotel business when you have a dilapidated factory?” he said. “We have to do something with that factory in Tupper Lake and these folks are making an offer to do it. … This will increase our tax base dramatically. We have to eliminate that blight. Can we do it as individuals? I don’t think so. Can the village do it? I don’t think so. Can the town do it? … I don’t think either of them can do what needs to be done to put this program together.”

Maroun also said the developers will be under strict controls with the income and age restrictions on tenants in some units, joking that it’s not a purely private business like the Tupper Lake Free Press, where McClelland had the option to raise the price per copy from $1 to $2.

“Not enough, Paul, not enough,” McClelland said in a moment of levity.

Maroun said it would also free up older residents who want to remain in the community but live in too big of a house for their current life stage, yet with a lack of smaller and safe housing, have chosen not to put their homes on the market.

Town Councilman and Kentile Excavating President Adam Boudreau spoke next, first stipulating that his private company would not be bidding for any of this work, and he was speaking as a community member and member of local government — in favor of the PILOT.

“The OWD site has sat dormant for far too long,” he said. “The project connects improvements we’ve made Uptown and Downtown into something coherent: a village that tells a story of momentum, not neglect. It also triggers a chain reaction of commercial development.”

He pointed to several local businesses in the factory’s vicinity of real, actualized economic progress, not mere potential, adding that now is not the time to turn back.

“Is this project perfect?” he asked. “Maybe not. Does a PILOT program excite the community? Absolutely not. But this is our one real opportunity. The PILOT discussion deserves honest scrutiny, and I understand the frustration of taxpayers who might ask, ‘Why help carry the weight?’ But this is exactly the type of project that earns that kind of support. It’s community serving, professionally managed and catalytic in ways that benefit every property owner and business in the village and town.”

He then held up large photos of the blighted OWD building, and pointed to photos behind him of recently completed apartment projects by the company in central New York.

“For the past two decades, we’ve passed this shuttered industrial giant every single day,” he said. “What do you want to see over the next 20? Because we have a choice.”

Jed Dukett spoke next, saying he supports the project in a macro-sense, but didn’t feel the hearing gave him and others enough time to fully understand the PILOT’s important details and ask questions to the IDA.

McClelland spoke next, offering support for the project after declaring he is “a man who hates PILOTs more than anybody in the world.”

He said that while the property is currently fetching $677,400, if the developers and their vision were to walk away, that value would probably “drop like a rocket” and become a major liability.

“I’ve come full circle on PILOTs,” he said. “I think PILOTs are kind of a community’s way of investing in a project that’s worthwhile. And I just think if we pass on this, we may be looking at that … untidy structure for a long long time.”

He thought it was a good financial package for Tupper Lake, and that the outsized benefit to cost ratio had convinced him this was worth the buy-in.

Schuller spoke next, stating that there’s an extreme need for affordable and safe housing — and that this is a much better PILOT than other current agreements in Tupper Lake, with the fixed payments encompassing three-quarters of what a full tax bill would have been.

“We’re not making money,” he said. “But this is a lot more than the other (PILOTs) are paying.”

Brian Merriam spoke next, in favor of the PILOT. As someone who moved to Tupper Lake a year-and-a-half ago, he said a PILOT was instrumental in helping him grow his business, the Merriam Insurance Agency in downtown Schenectady, from 13 to 25 employees. Had it not been for a PILOT, he said the numbers would not have worked for him, and he would have had to take his business elsewhere.

“These people were all able to come to downtown Schenectady, they were able to buy food, gas, go to the restaurants — and if it weren’t for my company staying there, I would have had to move to another place where I could have bought the building. Instead, we stayed in downtown Schenectady.”

Scott Varden spoke next, joining the meeting via Zoom. Though his comments were largely unintelligible — claiming he had an order to manufacture 10 million blankets from billionaire Chinese businessman Jack Ma — he said he was in favor of the project. Varden suggested a blanket manufacturing business in the proposed commercial developments to “bring some jobs back to my hometown,” before he exceeded the time limit and had his audio muted.

Mark Stocker spoke next, stating that he was a new resident of Tupper Lake, moving from Florida. He said he fell in love with the community “instantly.”

“This is a great thing,” he said. “I don’t see how anybody could not want this to happen to our Tupper Lake. This is a great place. … This has to be more than just a summer destination. This has to be a place where people want to come and live. And if you don’t do something — and I looked at the population, it’s been going down and down and down — this is your life rope right here. Build this thing, people come, kids will come, more investments will come.”

Matthew Showalter, who recently purchased the Northwood Cabins with his brother, spoke in favor of the PILOT and project. He spoke on the new revenue the future would generate long after its completion.

The tax income from spending by residents and workers of the project after completion, increased tourism driven by a stronger, more active town, the additional revenue created by increasing housing capacity — which is a hard number to assess, but without a doubt, the more people live here, the more people spend money, the more tax we get on the town,” he said. “All of that undoubtedly supersedes the modest real benefit to the builder. Because when you look at the full picture, the $2.7 million that he mentioned that the builder benefits from in that PILOT program, results in tax revenue that would not exist otherwise.”

For example, while the sales tax is technically lost through the PILOT, he said if it wasn’t for the project getting underway, it wouldn’t be spent. In other words, it would never be there anyway.

“This isn’t a giveaway at all,” he said. “It’s a trade that works in our favor in every way. We get investment, we get housing, we get economic growth and the old ass building just looks better. No project, no progress.”

Steve Furnia spoke next, stepping forward as the sole voice of opposition at the hearing. As it is, he said the village and town are so financially strained currently that, while he said the project was a good thing, it does not make sense to initiate the PILOT.

He cited all of the taxes from last year that the county had to pay back to make the school, village and town whole — showing the delinquency.

“As far as the PILOT program, I don’t agree with it,” he said. “If somebody can afford $46 million to put a building up with state grants, millions and millions of dollars of state money, taxpayers’ money, our money going to build a building — if they can’t pay taxes on it, take it someplace else.”

Fontana was the last to speak, saying that it was nice to see the turnout, and that she had been fielding a lot of PILOT questions from concerned citizens the last week. She said the village, town and school governments all came together and “did not take it easy” on Jeremy to get better terms for the taxing entities in the negotiations.

Fontana thought that, in the end, the IDA board came up with a favorable enough plan, and it was assuring to hear the community support.

Process problems

While Fontana said she supports the project, and believes the approved PILOT is a fair compromise between both the developer and the local taxing entities, she said the IDA’s lack of transparency and timing around the process were red flags.

“Having a public hearing at 6 p.m. the night before your meeting where you’re going to adopt it is bad faith,” she said. “It tells me, as a community leader, that frankly you don’t care about the opinions of my community, constituents and residents.”

Evans said that he understands the concerns, acknowledged it wasn’t an “ideal” process but said that if anything said or written in public comments supported pumping the breaks, he was confident the IDA board would have done so — and that it only took the vote the next day because its members, three of which were at the public hearing, had time to review the comments and were confident the agreement enjoyed sufficient support.

Although Fontana said there’s a clear contingent of Tupper Lakers opposed to the PILOT, even if they favor the project, Fontana said she was confident in both listening to the public hearing and in conversations with an array of community members that the majority of the community is behind it.

She said that it’s good it happened to line up with the IDA board’s decision, she’s not too sure the community’s voice mattered in the process, and to her, that was deeply alarming, and extremely upset about how Evans conducted the hearing process for such a consequential decision for Tupper Lake’s future.

“I think the end result is favorable for everybody,” she said. “But setting that aside, I’m pissed about how Jeremy conducted this process and how it didn’t matter — the fact that the community thought that their opinions would be considered as part of this process — I think is what pissed me off.”

Evans said he and his staff had the responsibility of making sure all comments were recorded and provided to the board, which he said were reviewed ahead of the vote. Evans said he reminded the board ahead of the vote that, if they felt it was warranted, the decision could be tabled.

“It’s not ideal, but we felt comfortable with how we approached it all,” he said. “In the end, there wasn’t anything that was shared or raised that required any additional time or research or anything like that.”

Fontana was grateful that village Trustee Eric Shaheen is one of the IDA’s board members, and said he would have let the board hear it if they were moving toward a vote that did not enjoy sufficient community support.

“He was going to represent the interests of village taxpayers and the town of Tupper Lake,” she said. “Our job is to represent the opinion of the people of Tupper Lake, and the people of Tupper Lake came out in favor of the PILOT. That trumps our own personal opinions.”

Fontana said that, with the PILOT’s passage, while that may be a bit rosy of a timeline, community hopes are running high.

“I think they’re going to do whatever they can to expedite this project,” she said. “Do I think it might be a little unrealistic? Sure. But do I hope they prove me wrong? Yeah, you bet.”