COUNTY LEGISLATURE AND GC SCHOOL DISTRICT AGREE TO A SMALLER PIECE OF THE GARVIES POINT TAX AND PILOT PIE
DESPITE "CURSORY" AND "CRUDE" REVIEW BY ASSESSOR, MAJORITY PASSES RESOLUTION
August 20, 2016 - The City of Glen Cove cleared the last major hurdles standing in the way of executing its financing plan for the infrastructure improvements and public amenities for the Garvies Point re-development project as both the County Legislature and the Glen Cove Board of Education agreed last week to a smaller share of the tax revenue the property generates than they would have otherwise received.
Four taxing jurisdictions had to agree to the tax re-allocation formula which significantly increases the City of Glen Cove’s share of the PILOTs and property taxes generated by the 52 acre development relative to other properties in the City from 29% to 39%, while the School District’s will decrease from 62% to 53%, the library’s from 1.5% to 1.4%; and arguably, the County’s from 7.7% to 5.4%;
The City Council and Library district had already approved the new formula weeks ago.
Last Monday’s vote of the County legislature was complicated by the fact that the Legislature's Rules Committee two weeks earlier had approved the proposal with incorrect figures that, according to the County’s assessor’s office, underestimated the county’s current share of property tax revenue from the City of Glen Cove by about 13%, which in turn would leave the county an additional $4 million short of what they otherwise would have received from the property.
Steve Corte, who spoke on behalf of the Assessor’s office at Monday’s legislative special session, said that the County was unable to conduct a thorough analysis of the City’s report of what the tax revenue implications for the County would be.
“The best we could do in the time allotted was to read the report,” he said.
Despite calling the County’s review “crude” and “cursory,” Mr. Corte said he was confident that the new figure for the current allocation of taxes going to the county of 7.7% (13% more than the 6.5% that had originally been presented by the City of Glen Cove) was accurate because of the methodology used by Standard Valuation Services (SVS), the real estate appraisal firm hired by City of Glen Cove.
County Legislator Delia DeRiggi Whitton, challenged the updated figures, and questioned the County’s methodology in reviewing the report, saying that she had sent an e-mail to the Assessor the previous Friday regarding the issue but had not received a reply. An independent analysis, she continued, put the county’s current share of tax revenue from Glen Cove residential and commercial properties closer to 11% and that accepting the re-allocation would cost County taxpayers closer to $15 million.
“I don’t know how anyone could vote on this,” she said. “I think we do need to do our due diligence and at least table this.”
Francis Becker, an aide to County Executive Edward Mangano, whom he said supports the Garvies Re-development proposal, replied, “we are of the belief that the slight variation [in percentages] is within a margin of error.”
A few minutes later, through a long line of questioning, Legislator Howard Kopel (R - Oceanside) attempted to steer Mr. Corte away from using the words “crude” and “cursory.”
Sticking to his labels, Mr. Corte said that those terms were used by the Assessor’s office because it did not have the time to gather all of the data that SVS had collected and as result relied on their numbers. He reasserted his opinion that the appraiser's methodology was sound.
During the public comment period, Sea Cliff Mayor Bruce Kennedy reiterated the argument made by Legislator DeRiggi Whitton that there were many contradictory figures that required a closer look by the County Assessor, and offered as evidence a Glen Cove resident’s tax bill with a pie graph included on it that showed 9.9% of the property owner's taxes going to the County, and cited information within the SVS report that indicated the county receives as much as 13.15% of the property tax revenue generated in the City of Glen Cove.
"Whether you accept the 9.9% on the residential tax bill or the 13.15% it is a great departure from the 5.5% being offered," the Mayor said.
Additionally, he asserted that the revenue the city would now receive from the property, would not come closed to covering the cost to the County of providing services to Garvies Point residents.
“Neither I nor the residents of Sea Cliff are willing to pick up any portion of the tax bill for this development and I am sure the residents of your Districts do not want to subsidize these million dollar condos either,” he said. “It is unfathomable for the County to approve this subsidy. Why should all current taxpayers in the County be forced to fund this development for the next 40 years?”
Glen Cove resident Drew Lawrence, who had served for six years on Glen Cove Community Development Agency and seven years on the Zoning Board of Appeals, said that he is “pro-development” but is opposed to the financing plan which he said came into conflict with an earlier agreement which required the developer to pay for construction of public amenities and infrastructure improvements.
“A PILOT” he said, “was never intended to finance any portion of the project.”
Additionally, he questioned whether the City had taken into consideration costs that would be incurred in the future as a result of the development. Supporters of the development, he said, have argued that “without the project there will be no revenue.” But, he added, “without the project there will be no costs.
He also said that he believed the legislature’s vote was subject to NIFA review.
Amy Marion, of Sea Cliff, who is representing 105 residents of Glen Cove, Sea Cliff and surrounding areas in a lawsuit against the City to block the development, argued that the County Legislature was violating procedure since the rules committee had never voted on the proposal with the revised figures. "Procedurally, you don't have jurisdiction to act here," she said.
She continued that the resolution was in direct conflict with the New York State Constitution, which she said, "does not allow [the county] to redistribute proceeds of taxes or benefit assessments.
Glen Cove resident Amy Peters said that she believed the City and developer were bullying taxpayers and the other jurisdictions by threatening that the property would remain undeveloped if this proposal was not agreed to.
Deb Dumas of Sea Cliff likened the proposal to a “shot gun wedding.” The City of Glen Cove, she said, “is trying to force us into a partnership we do not want and for which we are being asked to supply a considerable dowry.”
"The negative impacts on traffic and the environment will be far-reaching and permanent," she continued.
Several other area residents spoke against the proposal citing concerns, among others, about the impact of an 1100 residential unit development on the County’s sewage treatment facility in Glen Cove, the repeated changes to the figures presented by the city, and the tax breaks for the developer and tax increment financing of the construction of amenities and infrastructure improvements amounting to “corporate welfare.”
One area resident did speak in favor of the proposal. Pasquale Cervasio of Glen Cove said that “without PILOTs we will have nothing.” The project he continued is “good for the city and good for the county.”
Glen Cove Mayor Reginald Spinello also spoke, emphasizing that he believed the project would bring significant economic benefits providing jobs to construction workers and generating tax revenue.
Ultimately, the legislature voted 13 to 5 in favor of the proposal, with Democrats Laura Curran (5th L.D. - Baldwin) and Carrie Solages (3rd L.D. - Elmont) joining 11 Republicans in supporting the measure. The five votes against were all cast by Democrats.
"It's unconscionable that the County entered into a 30 year long agreement with a private developer when their own tax assessment office admits to having little time to review,” said Legislator DeRiggi Whitton in a statement to Northwordnews the following day. “Both our taxpayers and the children that utilize our school district deserve better than a rush job when the analysis is done to get their fair share of the County tax portion."
Mayor Kennedy called the “so-called emergency action” of the Legislature “completely improper and unjust.”
“The only issue before the Legislature was to examine the fiscal impact of accepting less tax revenue from the Garvies Point project, yet the Deputy County Assessor testified that their review was ‘cursory, last minute and crude,’” he said.
“Evidence was presented that the fiscal impact will be far greater than what was alleged, yet the members of the Legislature did not even consider the facts," he asserted. "How a County that is nearly a billion dollars in debt can force all Nassau County residents to subsidize a highly contentious and poorly planned development is beyond my comprehension.”
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FOR SCHOOL DISTRICT, RXR SWEETENS DEAL WITH SCHOLARSHIP AND EDUCATION CENTER
On Thursday, August 18, the Glen Cove Board of Education voted 5 to 1 for the School District to accept a significantly lower portion of tax and PILOT revenue generated by the Garvies Point waterfront redevelopment project relative to what it receives on other properties in the city. Rather than receiving a 62% slice of the property tax and PILOTs pie, the school district’s allocation will be reduced to 53% - an approximately 17% reduction.
Trustee Maria Venuto, who at the August 8 School Board meeting had expressed concerns that the City’s projection of the number of students the re-development project would generate was revised downward by about 75% from figures included in the 2012 Final Environmental Impact Statement, was the sole dissenter.
According to the 2012 document, the 1100 unit residential development was projected to increase enrollment in the Glen Cove City Schools by about 225 students. The new numbers presented on August 8 reduced that number to 56 students. With a current annual per pupil expenditure of approximately $23,000, the difference in cost (not taking inflation into account) between the two projections to the school district each year is about $3.9 million.
In an effort to alleviate concern that the diminished proportion of revenue from the property might not cover the cost of increased student enrollment, the developer RXR sweetened the deal with a supplemental “good faith” agreement, that was also approved by the Board on Monday evening, that Glen Cove Mayor Reginald Spinello argued creates a “backstop.”
Under that agreement, if an independent auditor determines that the costs of increased enrollment from the development exceeds the tax and PILOT revenue generated by the property for a given year, RXR will make an additional payment to the district not to exceed $150,000 for school years 2019 - 2021; $250,000 for the years 2021-2023; and $350,00 for years 2023 through 2056.
Additionally the agreement provides that RXR will contribute $50,000 to establish an "educational program" at the site, and $10,000 each year following through 2056, as well as $10,000 each year to a scholarship fund for Glen Cove High School graduates.
Residents spoke on both sides of the issue reiterating points made at the August 8 meeting (Click here for article).
No public discussion took place among the Board members prior to the vote.
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