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Economic Impact Studies Put Facts Over Fears In Evaluation Of PILOTs For Haverstraw Residential Developments
By Tina Traster
The North Rockland Central School District in September hired Storrs Associates LLC, an Albany-based research firm that advises public and private entities on economic development, to study the potential impact on PILOT programs for five pending projects in the Town of Haverstraw and the Village of Haverstraw. Four of the five projects are residential. The town has already signed off on two of the four residential PILOTs (payment in lieu of taxes) for market rate housing. The remaining two projects include affordable housing in the Village of Haverstraw and are stalled because of opposition from the Town of Haverstraw.
“The district wants to have a minimum criteria, a framework for PILOTs,” said a representative for the school district. “The district is trying to be proactive and deliberate.”
The cost of the study is $13,350.
The push to study the impact arises out of the high-profile proposed Chair Factory project in the Village of Haverstraw, which requires PILOT approvals from the village, town, county and school district. By many accounts, there is broad support for the project, which would clean up fallow riverfront property, provide affordable housing, and stimulate economic vitality in the village. However, Town Supervisor Howard Phillips has been waging a vociferous campaign against approving PILOTs for the two affordable housing projects.
In contrast, the town last year swiftly signed off for two market-rate developments with PILOTs: BNE’s 300-plus unit luxury development in Letchworth Village and another development for 228 units at the site of the former Oak Tree Bungalow colony. Both developments are in the town’s LA-17 (Luxury Housing) zone and neither will provide affordable units or public amenities. Both are for-profit projects, and do not have lotteries. These rentals are open to the entire marketplace, including people from outside the county.
The Rockland County Industrial Development Agency (IDA) has signed off on both the Chair Factory project, as well as WestHab Inc., which is planning 81 affordable housing units at 63 Maple Avenue in the village. Both affordable housing projects have broad support from Village and County officials but Phillips continues to stymy affordable housing in the Village, saying Haverstraw has enough affordable housing and Rockland’s other towns should step up. At several public meetings and on WRCR 1700 AM, he has railed against PILOTs, affordable housing, the burden of hiring more police officers. He ties the proposed PILOTs to threats of certiorari lawsuits and says it will add a financial tax burden to property owners while sidestepping the economic benefits to new development. The Rockland County IDA (Industrial Development Agency), which has signed off on a pilot for the Chair Factory site, has shown the benefits of the project make sense. According to a study by the IDA, the local benefits, over $500 million, outweigh the cost 55:1.
“It’s a good thing that North Rockland Central School District has hired a consultant,” said Steve Porath, Executive Director of the Rockland County Industrial Development Agency. “It’s a rational way to make an informed decision.”
PILOTs schedule payments to taxing jurisdictions over a long term. They provide certainty of revenue for the county, town, village, and school district, though the amounts are typically lower than assessments based on fair market value. The incentive is necessary to make a project financially feasible for project lenders, not to enhance the profitability to the developer.
A common misunderstanding is that PILOTs increase property taxes. In fact, the lack of development and lack of new taxpaying properties are the cause of increased taxes. Municipal salaries, insurance premiums, and maintenance and improvements on public facilities are always increasing, and without new revenue from development, the existing taxpaying base has to cover those ever-increasing costs.
PILOTs have a net-positive impact on tax rolls, as the economic benefits derived from the project outweigh the costs of the PILOT. The IDA is required to certify a positive net benefit through an economic analysis before it can authorize a PILOT. And PILOTs preclude developers from filing annual tax certiorari challenges during the term of the PILOT. If a developer does not deliver, PILOTs have a recapture provision that allows the IDA to void the PILOT agreement and enable the taxing authorities to collect the lost tax revenue and assess the property at full market value.
PILOTs are complicated – but they are often a critical component of economic development.
It is worth noting that the four projects in Haverstraw all involve desperately needed housing.
The 2024 Rockland County Housing Needs Assessment, prepared by Pattern For Progress, says, “exclusionary land-use policies are a significant barrier to meeting housing needs in Rockland County.” In other words, most of the county’s housing is overwhelmingly comprised of single-family homes in single family zones.
The Rockland County Housing Assessment Needs report shows 42 percent of the town’s (Town of Haverstraw) residents are housing burdened, while 52 percent of residents in the Village of Haverstraw are spending more than 30 percent of income on housing costs.
The proposed $330 million development to revitalize the former Chair Factory site, a long-blighted nine-acre peninsula that juts into the Hudson River, is Rockland County’s largest opportunity for affordable housing. The Huntington, Long Island-based MPact Collective is proposing 450 housing units, 70 percent of which will be a combination of affordable and 40-year rent stabilized workforce housing. The original plan also included 14,000-square-feet of retail that connects with Allison Avenue, green spaces lacing the perimeter of the site to make the Hudson River accessible for kayaking and boating and built- in protection for climate change flooding. The proposed 150-room hotel is slated for the second phase.
Without a PILOT agreement, neither the Chair Factory nor the WestHab project can secure necessary government financing and tax credits that enable affordable developments to be built. MPact Collective has said it will not purchase the property until the PILOT is approved, and other state and private funding is in place. The developer plans to pay nearly $8 million for the nine-acre site, as well as three to four private parcels it is in the process of acquiring.
“We think it’s commendable that the school district is taking a methodical approach to analyzing the merits of these important housing proposals,” said Ryan Porter, managing partner of MPact.
The Chair Factory has been navigating through the approvals process in the Village of Haverstraw. Meanwhile, it has filed a Brownfield Cleanup Program (BCP) application and Draft Remedial Investigation Work Plan with the New York State Department of Environmental Conservation (DEC). In 2022, the village won a $10 million downtown revitalization grant (DRI) from New York State. Portions of the grant are being used for infrastructure on the site.
The Storrs report breaks down as follows:
Student Cost and Enrollment Projection Framework (initial data mining): $3,500
Cost for assessment of individual proposed PILOT projects: $1,500 per proposed PILOT
PILOT Approval Policy Advisory Services: $2,350
