The sale of Avalon’s first constructed apartment building on Huguenot Street would have been uneventful had the new owner, Hartz Mountain, not applied for an exemption for their mortgage tax. The original PILOTs (payments in lieu of taxes) for this building was for 30 years. Residents and some council members have expressed serious concerns about these PILOTs, so it was not surprising to hear mostly a volley of complaints about this mortgage recording tax exemption (or reduction in fees).
The IDA (Industrial Development Agency) met on March 24 to decide whether to grant Hartz Mountain’s application for this mortgage tax exemption. The IDA granted it, but with a slight twist. As reported by Charles Strome, City Manager on the WVOX radio station, Hartz Mountain had requested an exemption only on the difference between the old mortgage and the new, higher one. The previously granted mortgage recording tax on the previous mortgage of $67.3 million was subtracted from the new $80 million mortgage, leaving a net of $12.7 million. This would have resulted in $165,100 of savings for Hartz Mountain. However, Hartz Mountain agreed to pay the City portion of that exemption, $63,500, leaving the rest of the exemptions to the County and MTA in place. Strome added that Hartz Mountain has to “pay the IDA $58,392.70 in application and transaction fees plus IDA legal fees at cost.” He emphasized on WVOX there was no loss of revenue to the city. When Bob Marrone on WVOX brought up Councilman Richard St. Paul’s concern that the city Council did not have enough input into IDA decisions, Strome said he could report to the Council with additional information since he is a member of the IDA.
Councilman Lou Trangucci feels the IDA is “a body separate from the people.” and thinks the members of the IDA should be appointed by district. He added how can they be held accountable at present. For example, with these Avalon buildings the Planning Board accommodated the developer, and did not address the need for a greater number of parking spaces. Mitch Tarnopol felt appointments to the IDA were not an issue and “if you don’t like the IDA, get rid of it.” Of course, many people know getting rid of the New Rochelle IDA would only result in the County IDA taking over jurisdiction in New Rochelle.
Speaking at the New Rochelle Citizens Reform Club on March 24 Councilman Richard St. Paul enumerated a list of concerns he had about the New Rochelle IDA. He told members of the group he had asked for a discussion about the agency on City Council and this topic is scheduled for April 13th. Among the items he has enumerated are the need to televise IDA meetings. Before the meetings he feels their agenda should be available on line and after the meetings the minutes should also be placed on line. The meetings in his view should be held at night and City Council should be able to weigh in with their thoughts before the IDA meeting. A list of all IDA properties, both current and previous, should be readily available.
The IDA is supposed to provide jobs but the average cost per job is one of the highest in the state.
Reminding people of the actions of the New Rochelle Citizens Reform Club, Lorraine Pierce, Secretary, said it was this group that continued to advocate for IDA public hearings because previously they were not required to hold a hearing when they granted PILOTS and abatements, even for Avalon. This action was approved by City Council when Tim Idoni was Mayor.
When asked after the meeting about all the abatements and PILOTs given by the IDA, former Mayor Len Paduano stated he had never given tax abatements even when developers came to him and asked for them. The only PILOT programs he gave was for senior citizen housing because he said this was for the good of the public.