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Potsdam school board questions PILOT agreement

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POTSDAM - When the board of education meets again, they may hold the future of a multi-million dollar student housing project in their hands.

The board will be voting whether to accept a PILOT (Payment In Lieu Of Taxes) with Chason Affinity, a development group that is looking to construct 50 upscale cottages on a 103-acre site on Outer Main Street across from SUNY Potsdam’s Maxcy Hall.

Should be board reject the agreement, there would be no PILOT.

“It’s all or nothing. In essence each municipality gets a veto,” Superintendent Patrick H. Brady said. “Will they do it if we don’t provide this incentive to them? I don’t know.”

Mr. Brady worked with the district’s business manager, Laura Hart, along with representatives from several other involved parties in negotiating the agreement.

“I’ll have a difficult time supporting this,” school board President James A. Bunstone. “We need development, but do we need this development?”

Board of education member J. Patrick Turbett also questioned the proposal.

“This seems fairly favorable, and they’re not creating many jobs with this,” he said.

The agreement calls for the development to have an assessment of $5.5 million that would not change over the 11-year life of the agreement. Chason Affinity would receive a 35 percent discount on its property taxes for the first six years of the agreement. That discount would be followed by a 30 percent discount, to be followed by a 25 percent, 20 percent, 15 percent and 10 percent discount in the final year of the agreement.

In the project’s 12th year, Chason Affinity would then pay 100 percent of its property tax bill.

Board of education member Frederick C. Stone Jr., wondered if Chason Affinity could challenge their assessment once the agreement was signed, .

“That wouldn’t be for 11 or 12 years down the road,” Mr. Bunstone said. “They’re agreeing to this for 10 years.”

Mr. Turbett also talked about the potential negative impact the project could have on other landlords in the community, who have never and will likely never receive similar benefits.

“We have a lot of landlords who have never gotten tax breaks and over those 10 years their assessments will likely go up,” he said.

Mr. Brady defended the proposal and said the community needs upgraded student housing.

“Speaking with officials from both colleges, they agree we could improvement to our student housing stock,” he said. “Unless you’re talking to landlords, almost anyone in the community would say the same thing.”

Mr. Brady said before the agreement can be finalized it must earn the support to the school board, village board, town board, county legislature and library board, since Potsdam’s library board is a taxing entity.

“The question is is this a residential or commercial development?” Mr. Stone asked.

Mr. Turbett replied, “It’s clearly commercial. They’re going to be making money.”

The project calls for 50 cottages to be built over a two-year period with 20 being built this summer and hopefully open prior to the start of the fall semester at Clarkson and SUNY Potsdam.

Given that the agreement must be passed unanimously by each of the involved boards, Mr. Turbett said he wanted to know when the other boards would be voting on the agreement.

“I don’t have that schedule,” Mr. Brady said.

“Could we get that? If one of them votes it down than we’re off the hook,” Mr. Turbett said.

While Mr. Brady doesn’t get a vote, he said he is recommending the board support the proposal.

In a memo distributed to board members, he wrote, “In my opinion, the deal is a solid compromise as it provides some incentive for the project without being too generous. Though most recognize that our college housing quality could improve in the community, we were cognizant that the project will not bring any economic growth of substance and will have some impact on other landlords. On the other hand, Chason has been in our community for some time with the Lawrence Avenue Apartments and are now looking to make further investment in Potsdam. This will be an increased source of revenue during difficult financial times and will eventually be added to the tax rolls.”

Mr. Bunstone though noted that as a school district their interests extend past Potsdam.

“As a school board we have people living in Stockholm who aren’t going to see any benefit from this unless they are one of the six people hired.”

The board will again meet at 6:30 p.m. June 26 in the high school library. It is expected that they’ll vote on the proposed agreement at that time.

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