Kingston lawmakers again advance proposal for tax-relief for two senior apartment buildings

KINGSTON, N.Y. >> City aldermen have again moved forward a request for a 35-year payment-in-lieu-of-taxes agreement for the company planning to buy the Gov. Clinton and Yosman Tower senior apartment buildings.

The Common Council’s Finance and Audit Committee on Wednesday discussed the proposed payment-in-lieu-of-taxes, or PILOT, agreement and ultimately voted 4-1 to send it to the full council next week for a vote. Minority Leader Deborah Brown, R-Ward 9, cast the vote against the resolution.

Brown raised several concerns about the proposed deal, including the fact the company seeking to buy the senior apartment buildings is being sued by its partners.

She also said an application for the PILOT submitted by Landmark Preservation LLC to the Ulster County Industrial Development Agency was incomplete, that the company was also seeking a sales tax exemption, and that there was no guarantee local labor would be hired to perform planned renovations at the Gov. Clinton and Yosman Tower buildings.

“But my biggest concern was the lawsuit,” Brown said. “We don’t want to get in the middle of a lawsuit that the two partners are sparring with each other.” She also said she was given information about the company not performing renovations in a New York City senior apartment building until after it was sued by the tenants.

Landmark Preservation, which is part of K&R Preservation LLC, has been named in a complaint filed in New York County Supreme Court by BFC Pres Dev LLC.

The lawsuit claims a breach of contract between the two parties because K&R Preservation principals, Francine Kellman and Brian Raddock, had gotten the right to acquire the properties in Kingston but had allegedly not notified BFC Pres Dev.

City Corporation Counsel Kevin Bryant said he had not seen the complaint until it was handed to him during Wednesday’s meeting. He said he would review it prior to the council’s vote, but noted the city is not named in the lawsuit.

City Assessor Daniel Baker added that the council was just being asked to consider a tax exemption that the county IDA has the authority to grant. He said the IDA would be able to revoke any agreement and put the properties back on the tax rolls if the applicant does not deliver on their part of the contract.

“Whether they perform or not, under real property tax law, we’re protected,” Baker said.

Baker also said the PILOT provides a 2 percent increase in the taxes paid on both the Gov. Clinton and Yosman Tower properties. Without the deal, that increase will not happen, he said.

There was also concern raised during Wednesday’s meeting regarding the haste with which K&R Preservation was seeking the PILOT.

Their attorney, Donald Cappillino of Poughkeepsie, said that has to do with the potential for tax credits to be eliminated under the federal tax reform bill currently being considered. He said the PILOT needed to be finalized by Dec. 31 to preserve those credits, which would be used in the nearly $10 million renovation of the apartment buildings.

Cappillino added that Landmark Preservation submitted a complete application to the IDA. He said the application Brown was referring to was a second form the company went over with IDA members to address certain questions. Cappillino also said the applicants had already said they would use local labor when they could.

The committee added a requirement for local labor to the resolution going to the council next.

The yearly tax payments under the proposed PILOT would begin at $187,500 for the Gov. Clinton building and $181,000 for Yosman Tower, then increase 2 percent annually. The initial $368,500 total payment for the two buildings would grow to $722,509.12 by year 35, according to the proposal.

If approved, the PILOT would cover the combined taxes for both buildings, which are paid to the city, the Kingston school district and Ulster County.

Landmark Preservation wants to buy the 92-unit Gov. Clinton Building at 1 Albany Ave. and the 104-unit Yosman Tower at 295 Broadway before the end of the year. The combined purchase price has been estimated at $17.9 million.