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JCIDA vows to stop tax breaks for housing developers as 1,035-unit housing goal is met

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The goal of building 1,035 housing units to address the acute shortage around Fort Drum has now been surpassed with 1,047 units. As a result, the Jefferson County Industrial Development Agency board of directors vowed Thursday to stop offering tax breaks to housing developers.

But the change won’t take effect until the agency finishes negotiating a final payment-in-lieu-of-taxes agreement for a housing developer seeking to build apartments in the town of LeRay.

“At the end of this particular project we’re working on now, the IDA won’t offer PILOTs for housing,” said agency CEO Donald C. Alexander, who would not disclose the name of the developer. “As a general rule, we’re going to say enough is enough. Housing is not one of the core economic-development areas the IDA is supposed to be working in, and we’ve participated in this emergency along with several other hard-working folks in the community. Now things are on a relatively even keel.”

The need for 1,035 market-rate rental units here was calculated by the Army in 2011. That figure was based on the scarcity of available housing along with the projected return of 19,000 soldiers from deployment by the summer of 2014. The JCIDA, Development Authority of the North Country, Fort Drum Regional Liaison Organization and municipalities have been working toward the goal.

Mr. Alexander, who learned this week that the goal has been reached, said the agency will nevertheless pursue a PILOT agreement with the developer in LeRay. The agency has been actively negotiating the deal for the past six months with the developer and taxing jurisdictions — the town of LeRay, Jefferson County and the Indian River Central School District.

“The process is well underway, and I think it would be inappropriate at this point not to continue our discussions,” he said. “We were never quite sure we were in a position to claim victory in terms of the 1,035 units, and I’d want to continue this because we’re in the middle of it.”

Only two housing projects are now being planned in LeRay: The Common at Fleming’s Farm, a development with 150-plus rental townhouses planned by California developer Fidelity American Holdings Corp. It would be situated off Route 11 on a vacant parcel north of Eagle Ridge Village. The second is LeRay Place Apartments, a 360-unit complex planned by Management Resources Development, East Lansing, Mich., on land a half-mile south of Route 342 on the west side of Route 11, owned by Robert P. Gillespie.

The Michigan developer for the LeRay Place project previously told the Times it would not seek a tax break. But Fidelity is actively seeking financial assistance from local agencies for that project, according to principal Linda W. Luther.

The JCIDA’s vow to end tax breaks for housing developers could change, Mr. Alexander said, depending on whether the Department of Defense decides this summer to change the number of troops at the base due to cuts in national defense spending. If a Pentagon realignment of forces brings thousands more soldiers here, for instance, the agency may then again offer incentives for developers. The post now accounts for the presence of some 19,000 soldiers and 20,000 connected family members living in the area.

“We don’t know what’s going to happen in three months,” Mr. Alexander said. “We could be plus or minus 8,000 troops. I think we would be compared favorably by the government with another post that may be considered for closures or to be downsized if their community has not responded to housing needs as ours has done.”

The tax breaks for housing projects have been controversial in some communities, as local leaders have questioned developers’ need for them. Last May, for example, a PILOT agreement was narrowly approved by Watertown City School District Board of Education, 4-3, for a 394-unit apartment complex on County Route 202 in the town of Watertown proposed by Morgan Management, Pittsford. Board members were concerned about the financial and educational consequences of gaining as many as 500 students from families living at the site.

Though the JCIDA plans to discontinue tax breaks for housing developers, municipalities are legally allowed to offer incentives without the agency’s assistance.

“The Army came to us with a problem and we stepped up to the plate,” JCIDA board chairman David J. Converse said.

“Going forward, this agency won’t take the lead on housing projects,” Mr. Converse said. “But if the taxing jurisdictions come to us and say let’s move forward, then of course we would do it.”

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