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Council to decide on tax breaks for Creek Wood Apartments

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City Councilmen Joseph M. Butler Jr. and Jeffrey M. Smith don’t plan to change their minds about a tax-abatement program when Creek Wood Apartments proceeds with the project’s second phase at the site off Mill Street.

Both councilmen opposed giving Norstar Development USA, Buffalo, a payment in-lieu-of-taxes agreement when the first phase was approved two years ago. And they plan to oppose it again when it comes up for a Watertown City Council vote, possibly later this month.

Norstar is asking for the same 10-year tax-abatement agreement it received in 2010, with a 100 percent exemption during the first seven years and a 75 percent exemption in the eighth, 50 percent in the ninth and 25 percent in the final year.

During Monday night’s council meeting, Mr. Butler said residents don’t want the city to “just give away” tax agreements. Mr. Smith agreed.

“Just give us a little bit, just a little bit,” he said in asking Norstar Executive Director Linda L. Goodman to give some taxes to the city during the first seven years.

Just finishing up the first 96 units, Norstar plans to build 104 apartments in the second phase of the $21 million project.

Mayor Jeffrey E. Graham pointed out that the city originally gave Norstar a tax break for both phases of the project, but the development company had to delay starting the second phase because the national economy bottomed out. The developers also were given tax breaks when they built Starwood and Summit Wood apartments in recent years.

Ms. Goodman told council members the tax agreement is needed for financing to provide apartments for low-income residents. Norstar hopes to raise about $13 million from investors, who would get tax credits in return, and obtain a $3 million grant from the state Empire Development Corp., a $2.3 million loan from the state’s Housing Trust Fund and a $2.3 million mortgage.

The tax break “is very typical for what we do with other communities across the state,” she said.

Of the 104 additional apartments in the coming phase, 75 will be low-income units and the remainder will be market rate, Ms. Goodman said. Construction is slated to begin this fall.

But Mr. Butler contended those market-rate units should not be included in the tax abatement, just the low-income apartments. Ms. Goodman said the entire PILOT is needed to finance all of the project.

Councilwoman Roxanne M. Burns also said the new apartments are needed to fulfill rental housing needs for Fort Drum soldiers.

The council recently rejected a PILOT agreement for New York City-based Related Cos. to buy the Maple Courts Apartments on Weldon Drive for $3.1 million and then invest about $2 million to renovate the complex. It was turned down because it involved renovating apartments, not building new units, they said.

In the past year, tax abatement programs for proposed town of Watertown apartment complexes became sources of debate for the Watertown City School District board. Construction has started on a 394-unit complex off County Route 202, and 296 apartments off Route 3 behind the Target store. Both of those projects were awarded PILOT agreements to proceed.

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