PILOT proposed for “affordable housing,” commercial pieces of Boulevard project

by Dan McClelland

The Franklin County Industrial Development Agency has proposed a major PILOT program for the “affordable housing units” contained in the residential and commercial complex proposed by Joe Gehm and his partners on the former Oval Wood Dish Corp. parcel on Demars Boulevard.

The Oval Wood Dish development group- based in Syracuse- are planning two apartment complexes actually- one on the Fletcher family property adjacent to the former Ames Plaza and the other on the industrial site adjacent to the town hall. Its address is 116 Demars Blvd. The PILOT proposed is for that one right now.

For the past year the developers- formalized as the Oval Wood Dish Tupper Lake LLC- have been talking about nearly 92 “market rate” or “blended rate” apartments. Some were proposed to be upscale apartments to possibly induce seniors here to move from their family homes into nice apartments overlooking Raquette Pond, and thereby freeing up those houses for young families to buy.

There has also been talk about apartments priced in the range that tradesmen and their families can afford- as an inducement for skilled laborers, electricians, plumbers, etc. to move here from around the North Country to fill job vacancies. Many of these people currently commute here daily from distant communities as do many Sunmount employees hired in recent years.

More apartments are needed here so many people here have been encouraged by the projects.

The composition of the apartment complex proposed in recent months apparently changed, because that of the approximately 92 apartments initially proposed ,80 will now be what is called “affordable housing.”

Rents will likely be subsidized by state and federal programs, much like they are at Don Smith’s Apartments, the “battered women’s” townhouses on the back road and at Ivy Terrace. All three of those housing complexes enjoy substantial property tax abatements each year.

Complicating that switch in housing types to be offered there is a draft document given to local elected leaders about a plan where the developers are working with the Franklin County Industrial Development Agency, headed by Jeremy Evans, and that county agency has proposed a major PILOT for those 80 units.

PILOT (payment in lieu of taxes) programs are a way for communities to attract development, by offering major property tax inducements.

This new one is based on a 30-year plan where the assessment upon which annual PILOT payments are based would remain at $677,400.

When Roger Sullivan owned and operated his O.W.D. Inc. plastic utensil business on the eastern end of the old Oval Wood Dish complex the total assessment for his buildings and the ones west of them that he later purchased and used for storage, the assessment was about $1 million.

After Roger’s factory was sold to another company which operated for another two years and then closed, the property was sold to Norman Bobrow and Associates, the New York City real estate firm that owns the former Ames plaza property next door.

That firm was able to convince the town assessment office to lower the assessment to $677,400- and that’s what taxes have been based upon in recent years.

When the apartment project was introduced by Mr. Gehm and his partners its worth upon completion was estimated at about $30 million. With high construction costs seen this past year and high inflation across the nation, most people in the construction business assume it will take probably $40 million to build it.

In the IDA proposal, the project’s cost is estimated at $39.1 million.

Missing from the original plan now is the commercial production brewery that the developers had been encouraging Raquette River Brewing’s Joe Hockey and Mark Jessie to create there. The successful brewery partners have since abandoned that plan. The local brewers now have a small shop in Lake Placid.

The proposed PILOT is based on the 80 affordable housing units and 15,000 square feet of commercial space proposed there, to include a number of business services and commercial tenants.

In the developers’ revenue plan is also several million dollars in Downtown Revitalization Grant money from the village’s $10 million grant win in 2022, some State Historic Preservation Program money and a major chunk is reportedly state tax credit funds. The project actually hinged on lots of that tax credit assistance, former Mayor Paul Maroun has told the community many times this year. It was reportedly approved in recent months.

The county IDA is looking to get their clients a 30-year PILOT where the current assessment of $677,400 would remain in place through 2055 for those certain units where rents would be likely geared to income.

In 2023 local taxpayers are paying $14.98 per $1,000 in village taxes, $1.83 per $1,000 in town taxes, $4.79 per $1,000 in county taxes and $16.39 per $1,000 in school taxes, for a total of $37.90 per $1,000 on their current assessments.

Many property owners, and particularly those with waterfront property on the local lakes, have assessments of $600,000 or more. Some of the great camps around our lakes are assessed at well over $1 million.

So based on the proposed continued assessment of $677,400 the developers would pay $50,000 as a payment in lieu of taxes the first year in 2026 when the project was finished and that would eventually grow by about 2% a year to year 30 in 2055 when the payment would be double that or be$100,800.

The PILOT proposed by the county IDA also would see no taxes paid on the commercial space in the complex until year six or 2031 when the first payment would be $7,500. That sum would grow each year by two percent or so to $12,063 in 2055 for a 25-year total of $240,227.

If there was no PILOT, the developers would pay $95,710 in village, town, county and school taxes in 2026 and $169,967 in 2055- on the 80 units or $3.9 million in total.

Based on the IDA plan the PILOT payments would total $2.27 million over the 30 years, versus $3.9 million without one, for a savings to the project and its developers of $1.6 million.

When that’s combined with two other incentives- a county mortgage tax exemption of $131,670 and a county sales tax exemption of $1,065,378- the developers would see total financial assistance through the county agency over the life of the PILOT of $2.8 million.

All of the local leaders- including Supervisor Rickey Dattola, County Legislator Nedd Sparks and Mayor Mary Fontana- are concerned about the PILOT advanced by the county IDA. There have been several recent meetings with County Manager Donna Kissane, who is also not a fan of the proposal, to explore in detail the impact of the PILOT plan on Tupper Lake’s future tax base, which has seen very little growth in recent years.

If the apartment project doesn’t materialize, the current taxes on the parcel with its decaying buildings are estimated at $26,978 in 2026 and by the year 2055, any owner would be paying $47,910 per year, based on the $677,400 per $1,000 assessment.