Owego: Another housing project hits detrimental snag

LeeAnn Tinney

OWEGO -- As a second potential local housing project suffered a significant setback that could be so cost-prohibitive that it has stalled indefinitely, the overall comprehensive plans for both Tioga County and the Village of Owego are strugglling to achieve their aims.

Among those goals is the critical need for mixed-income housing, which has wide-ranging influence on overall housing stock -- including high-end -- along with business development and the maintenance of a sustainable tax base.

The pair of housing projects -- both proposed by Two Plus Four Construction -- have hit local resistance as a result of a myriad of concerns that range from bringing in "low- to moderate-income" housing into the Village of Owego to environmental concerns, and whether the projects would garner a fair property tax rate.

"There are extremely limited possibilities to construct this type of project," said county Economic Development and Planning Executive Director LeeAnn Tinney.

Tinney was referring to the recent plans to bring a 40 duplex project to a currently vacant parcel the corner of Monstrose Turnpike and Southside Drive -- which annually fetches roughly $500 in property tax -- that was struck down last week via 6-1 vote of the village board.

Concerned residents presented a petition against the proposed rezoning of the parcel from residential-two to residential-three.

The change would afford the project to be constructed on a single parcel, rather than keeping with the current zoning requirement that R-3 zones require subdivision for each proposed structure.

"Technically, they could subdivide the 19 acres into 20 lots and have the project go forward -- but, in doing that, it adds cost to the project," Tinney explained. "These projects are very closely monitored because of the state funding sources, so if you add $300,000 to $400,000 to a project, it could push it out of even being financially feasible because they work very close to the budget."

Resident resistance due to, and insistence for, a "fair" tax rate was a significant stumbling block for the duplex project.

Regarding property taxes, Two Plus Four had sought a payment-in-lieu-of-tax agreement -- an area of common misconception due to the fact that PILOTs most often typically function as a means for consistency in an otherwise potentially cost-volatile endeavor.

"It's simply a mechanism to even-out what the taxes are to be paid," said Tinney of the PILOT agreement.

Specifically, projects that utilize state-sourced funds include a calculation for real property tax under section 581A under New York state law.

The function of the law is to make sure that projects are kept in good repair, and in unison with general municipal law, its aim is to clarify that some building projects are primarily income-based.

Under that section of law, the developer calculates the allowable amount to charge for rent, but if an unexpected costly issue blindsides the property owner, that expense can be deducted from the parcel's property taxes in order to ensure the facility is kept up to par.

"The state wants to make sure those properties are maintained to a certain level," Tinney explained. "Section 581(A) is a way to make sure that happens."

Regarding the use of a PILOT, Tinney noted that "investors like them for forecasting."

"It really is a benefit to municipalities because they, too, know what they're going to receive (in tax funds) each year," Tinney said. "That's why a PILOT is sought after. It's not a tax break -- it's a tax equalizer."

"Otherwise, these projects aren't built, because they can't sustain," Tinney added, noting difficulties in financing and the inherent difficulty in self-financing an endeavor like the Two Plus Four project.

Additionally, the above-noted concepts help capture some of the downtown revitalization funds.

"(The state) is not going to fund a project that is going to fail," said Tinney.

In terms of resistance to mixed-income housing, a notion that has cropped up in other area project proposals -- such as the proposed Sayre Gardens development -- regional comprehensive plans cite the need for updated, attractive and affordable options for area residents to live.

"When you say 'low-to-moderate' -- that's the people you go to church with," said Tinney. "That's the parents from your kid's soccer team. That's who we are -- it's teachers, nurses, county workers."

Tinney also noted that the area's large employers have a considerable number of employees living outside the counties in which they work.

"We need to change that and give them an opportunity to live here," she said.


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