A New York City developers multimillion-dollar plan to purchase and renovate Maple Courts Apartments, an affordable housing complex on Weldon Drive, will move forward without a payment-in-lieu-of-taxes deal.
At a public hearing slated for 10 a.m. Oct. 26, Related Cos. will ask the Jefferson County Industrial Development Agencys board of directors for up to $5.4 million in tax-exempt bonds. The JCIDA will offer the bonds at an interest rate lower than rates offered by commercial loans.
The developer plans to extend a state tax program that Maple Courts Apartments, owned by Vision Development of Watertown, enrolled in last year through the state Division of Housing and Community Renewal. The program makes lower property tax assessments possible through the 581-a provision in state Real Property Tax Law, which calculates assessments based on rent subsidies received by the government for low-to-moderate income housing. The program requires owners to rent at least 20 percent of apartment units to qualifying low-income tenants a requirement Maple Courts will continue to meet under the developers proposal.
Maple Courts enrolled in the program last year because a 40-year tax exemption deal in which it paid a combined $12,000 a year to three taxing jurisdictions expired, City Assessor Brian S. Phelps said. By enrolling in the 581-a program, Maple Courts is expected to owe roughly $36,000 in property taxes for 2012 at the end of the fiscal year. That figure is based on the propertys current assessment of about $1.5 million.
The company plans to purchase the apartment complex for $3.1 million. It would spend roughly $2 million, along with $1.3 million in planning and engineering costs, to renovate the five apartment buildings.
Because Maple Courts Apartments will remain eligible to stay enrolled in the 581-a program under the companys plan, Mr. Phelps said, the property assessment would remain at $1.5 million in spite of the money being invested in the project. The 581-a formula is based strictly on annual property earnings, he said, and wont be altered by the developers investment in renovations.
But based on the project plan the company submitted to the City Council in September, Mr. Phelps said, it might not receive much of a tax break using the special state formula. Thats because the developer plans to ask U.S. Housing and Urban Development, which provides funding for low-income families at Maple Courts, to increase the amount of subsidies it offers for rent. Mr. Phelps, who declined to offer specifics of the developers subsidy request, said those extra rent subsidies would significantly lower the tax break because the rent of the units would be close to the current market rate for such apartments.
When people of low income come to Maple Courts, they might pay about $350 a month, he said as an example. Then HUD makes up the difference between that and the market rent for properties under this sort of program. But if youre receiving $400 to $500 in subsidies for rent, you bring the subsidy right up to the point where there isnt much of a difference between the market value. It will be pretty close to the market rate.
Im actually a little bit surprised to see this whole thing going forward, Mr. Phelps said. The City Council looked at it and found there really wasnt much of a return theyre getting, and the proposal doesnt make one unit of housing.
The plan will not change the rent amounts now charged at Maple Courts for low-to-moderate-income families, said Joanna Rose, vice president of communications and public affairs for Related Cos. No tenants would be displaced under the plan.
The company will undertake substantial renovations to the complex and units that amount to over $21,000 per unit in rehabilitations, she said in a prepared statement.
The company, which specializes in affordable housing projects, would not provide any further information regarding its property assessment plan.
Were not going to go into any financial details that are private, Ms. Rose said.