The Oneonta Common Council on Tuesday night gave a green light to tax-abatement plan for Newman Development Group, which proposes building a student apartment complex on Blodgett Drive.
The vote was 7 to 1, with Fourth Ward council member Michael Lynch casting the sole vote against the plan and reiterating opposition to tax abatement for the developer.
Newman Development proposes building Hillside Commons, a four-story 330-bed apartment building, on Blodgett Drive near the State University College at Oneonta.
The tax-abatement plan, which includes a 15-year payment schedule and other stipulations, now goes to the Otsego County Industrial Development Agency, which has jurisdiction to negotiate payment-in-lieu-of-taxes agreements.
About 40 people attended the council meeting in the Oneonta High School cafeteria. Several speakers gave mixed views on the proposed project and PILOT agreement, and letters to the council also were summarized. Lynch’s opposition to the PILOT and his view that the value of the project was grossly overstated drew vigorous applause from the audience of about 40 residents.
The IDA recently asked the Common Council to work with Newman Development on a PILOT agreement. Under the plan approved by the council Tuesday, Newman Development would pay taxes according to a schedule based on a preliminary assessment of $8.4 million and with a 3 percent annual tax-rate escalator.
In the first year, Newman Development would pay $92,316 in taxes, and in year 15 it would pay $418,909 in taxes, of which 32 percent would go to the city, 11 percent to the county and 57 percent to the school district, according to the plan. In the 16th year, taxes would be $575,301.
Mayor Dick Miller said current taxes on the parcels comprising the site to be developed are about $11,000. Miller said city attorney David Merzig will review the PILOT, which he didn’t expect to change significantly under the IDA’s consideration.
After Tuesday night’s meeting, Jeffrey Smetana, a vice president with Newman Development, said the firm was happy that the PILOT it was approved. Newman Development is working with the city to resolve some issues, he said, and reviews by the Planning Commission remain hurdles ahead.
”We hope to start building this summer,’’ Smetana said. The proposal calls for occupancy in the fall of 2014.
In a separate but tandem process, the city Planning Commission is conducting a mandated State Environmental Quality Review and a site plan review for the project. The city planners’ next meeting is May 15.
At Tuesday night’s meeting, each council shared views about the proposed project and the PILOT agreement.
Lynch said Newman Development hadn’t shown a need for a PILOT other than as a path to maximize profits as soon as possible. Also, voting on a PILOT without means of enforcement was premature, he said.
Merzig said the IDA has many enforcement mechanisms, and Miller said the council needed to act on a proposal so that the IDA has basis to implement a plan.
Larry Malone, Second Ward council member, said he objected in general to instances of PILOT agreements being used by states to lure large corporations. However, in the case of Newman Development, Malone said, the PILOT plan is a defensive tool to protect the city and its residents, for instance, from “less-ideal scenarios” such as the development or holding of the Blodgett site by an exempt property owner.
”In recent years, the SUNY Oneonta Foundation has purchased private properties in the city and then sold them … to New York state,’’ Malone wrote in a statement on the Hillside Commons tax abatement plan. “These purchases have extended the boundaries of the campus, reduced city tax revenues and increased pressure on the city budget.’’
Newman Development Group, a private company based in Vestal, has built other student complexes, including Twin River Commons in Binghamton.
Miller said the Newman Development will be “very beneficial’’ to the city and its taxpayers, and that if the project isn’t completed, SUNY Oneonta will build a complex to meet demand.
SUNY Oneonta, which last year withdrew plans to build a townhouse complex, has has remained neutral about the current proposal by Newman Development.
On Tuesday night, the council also approved a policy that the IDA only enter into PILOT agreements for housing projects with construction costs greater than $3 million or which comprise 40 or more dwelling units, among other guidelines. Lynch was the sole opponent of the measure.