Lockport Union-Sun & Journal Online

November 29, 2013

Council vote on South Junior, Walnut Avenue projects draws puzzlement, anger

By Justin Sondel justin.sondel@lockportjournal.com
Lockport Union-Sun & Journal

Lockport Union-Sun & Journal — The Niagara Falls City Council has rejected tax break agreements for two of three agencies looking to move forward on housing projects throughout the city.

The council defeated payment-in-lieu-of-taxes agreements for proposed projects from two out-of-town agencies — both with only one no vote — and approved a 40-year PILOT on a joint project from developer Norstar and the Niagara Falls Housing Authority during Monday’s city council meeting.

The two agencies that were denied tax agreements — CB Emmanuel Realty, LLC and Housing Visions, Inc. — have both proposed projects that would include the conversion of long-vacant school board-owned buildings into apartments.

Councilman Robert Anderson Jr. was absent from the meeting, home with an illness, meaning that three of the four council members present need to cast a yes vote for each measure to pass.

Councilman Sam Fruscione abstained on the two votes involving school district-owned property, but provided the necessary third vote on the Norstar project, while Councilwoman Kristen Grandinetti and Councilman Charles Walker voted yes on all three agreements and Council Chairman Glenn Choolokian voted no on all of the agreements.

Choolokian said he did not like the duration of the agreements, with the CB Emmanuel Realty seeking a 30-year PILOT for their project at the former South Junior High School Building and Housing Visions seeking a 20-year PILOT for the agency’s proposed Walnut Avenue project.

“The PILOTs were definitely too long,” Choolokian said. “That bothered me and if I’m not comfortable with something I’m going to vote no.”

Choolokian said the city is too quick to give out tax breaks or other concessions to entities looking to do business in Niagara Falls.

“It’s like the city of Niagara Falls is in the business of paying somebody to do anything here,” he said. “If it’s building something, if it’s just moving here, it seems like we’re desperate.”

Choolokian said he has also heard concerns from landlords who feel the housing projects will create unfair competition for tenants.

“We’re taking away the population for these people, home, local guys that own these properties,” he said. “So now your renters are definitely not much to pick from.”

Seth Piccirillo, the city’s Community Development director, expressed frustration after the council meeting, saying that he and representatives from each of the agencies made themselves available to discuss the tax agreements in recent months, but received no inquiries from council members.

“We found people that have experience converting these buildings and we basically just told them to leave council chambers,” Piccirillo said. “We have explained the details to (council). We have made sure to keep the community updated. But they have made a decision that the way these buildings stand today is acceptable to them.”

Piccirillo then noted that only Choolokian had voted the tax agreements down and said the councilman might have voted differently if he lived near one of the vacant school buildings that would be restored as part of these projects.

The projects would help to bring stability to the sometimes dangerous neighborhoods where each is planned, he added.

“I urge (Choolokian) to spend some time on Seventh Street or Portage at about 11:30 at night and check if he thinks that’s acceptable,” Piccirillo said.

In addition, the council, including Choolokian, voted to sell city land to Housing Visions and approved a Community Development budget that included a $300,000 grant for the not-for-profit’s Walnut Avenue project.

Choolokian’s no vote was particularly puzzling in that the chairman asked no questions about the tax agreements in the months leading up to the vote, despite Piccirillo reaching out to council members offering to answer any questions they might have both at council meetings and in emails, he said.

“At the last minute he’s put these projects backwards,” Piccirillo said. “We could have had this conversation with him any time in the last six months.”

  

PROJECTS OUTLINED

Piccirillo gave a presentation during the work session at Monday’s council meeting outlining the positive impact he said the projects will have on the city’s bottom line.

Both projects would see the respective agencies take over school board-owned buildings that have been vacant for at least a decade and produce no tax revenues.

The proposed PILOTs included long-term deals that would have seen the agencies pay a percentage of the rents they collect over the duration of the agreement.

The Housing Visions agreement was a 20-year deal that would have seen the agency pay the city 5.75 percent of rents collected, starting at $16,000 in annual tax revenues and building to over $20,000 each year over the course of the agreement, according to projections from the Community Development office.

The CB Emmanual project, a 30-year agreement, would see the agency pay 10 percent of rents collected starting at $33,000 and building to more than $600,000 a year, according to the projections.

Piccirillo said that, in addition to bringing in tax revenue on land that is producing none, the projects would alleviate the city and school board of the approximately $2.1 million it would cost to demolish all of the buildings that will be either demolished or renovated as part of the projects.

“Essentially these programs should not be called payment-in-lieu-of-taxes,” Piccirillo said. “The should be called payment-in-lieu-of-zero-taxes, plus caring costs, plus eventual demolition costs.”

  

DEVELOPER REACTS

Ben Lockwood, the director of development for Housing Visions, rushed out of council chambers after his agency’s PILOT was denied, visibly angered by the measure’s failure.

Lockwood later said he was upset that Choolokian would deny the PILOT despite having asked “no questions of real substance” during the months of negotiations between the city and his agency.

“I think it’s frustrating when the council doesn’t see through a good project,” he said.

Lockwood said his not-for-profit has sunk more than $100,000 into “pre-development costs” and needed the tax agreement in order to provide a predictable tax structure to give the project stability.

“That’s what the PILOT was about,” Lockwood said. “Predictability.”

Lockwood said his agency, which has partnered with Carolyn’s House locally and plans to provide housing for women seeking to end abusive relationships and gain independence as part of the project, does not operate on “huge cash flows” and so needs predictable tax structure to make projects work.

“Really, that was a vote against survivors of domestic violence,” Lockwood said.

Contact reporter Justin Sondel at 282-2311, ext. 2257