Dear Neighbors,
Election Day is next Tuesday, November 8th, and I have been working on the campaign to elect Ilyse Spertus to represent District 5 on City Council. I would like to let you know why I’ve suddenly gotten involved in local politics.
For some time now I have been frustrated with the pace of development in New Rochelle. White Plains has sprinted ahead of us and now even Port Chester (Port Chester!!!) is thriving with new commercial and retail development. Fairway opened in Pelham and Whole Foods is opening in Yonkers.
Relatedly, last May I tried to get a reform candidate onto the School Board when I found the school budget to be grossly mismanaged. Some of you know that I found $20 million hidden in reserve accounts, unspent and growing, while the administration was cutting services and claiming poverty. Many members of the Board of Education (or perhaps all of them) did not know about these funds. The next few school budgets will be even tighter than the last one and we need significant financial help to maintain the current level of service.
Members of our City Government frequently say that they have no control or influence over our schools which are governed separately. That is only partially true. City Council has the ability to grant tax abatements on new development and those abatements directly impact school revenue. A complex like the Avalon Apartments should be paying our schools more than $8 million per year in taxes. Instead they pay us $70,000 per year while adding 116 students to the system at a cost of more than $2 million per year. The abatements run for 30 years, depriving us of more than $240 million of school revenue over that time. That is not a typo.
In fact, the whole notion of “Transit Oriented Smart Growth”, which in English means building residential units near the train station, involves an implicit subsidy of the City by our schools. The City may get some benefit from new restaurants attracted by the new residents, but our schools become more overcrowded and their budgets stretched even further.
Tax abatements are often granted by a local organization called the Industrial Development Agency (IDA). Our IDA was specifically rebuked by the New York State Comptrollers Office a couple of years ago for giving out tax breaks while performing no cost benefit analysis, among other things. I can send you that report if you would like to read it.
Members of City Council have claimed that the days of tax abatements are behind us. That’s not true either. In fact, this summer the Council offered a tax abatement so a for-profit developer could renovate a senior home on Maple Avenue. I caught wind of this while watching a video replay of a July Council meeting and Ilyse Spertus directed me to get involved. Working with the Commissioner of Development, we managed to extract an additional $170,000 of tax revenue from the deal at the 11th hour. It’s a pittance, I know. But if we had gotten involved earlier I believe we could have taken out about $500,000 more up front – money that could have been used to renovate the Church St. parking lot downtown. It’s a perfect example of why we need new representation on Council.
Still on the table is the Echo Bay redevelopment project. As a politician might say, I was for it before I was against it. The concept is beautiful, but financially the project would have been a disaster. We were going to give away 16 acres of city-owned property for nothing, and then be forced to move our City Yard at a cost of $25 million. We would have to issue debt to do that, which would increase our city’s debt load by 35%. In addition, the developer initially planned to buy up commercial properties that currently provide more than $700,000 per year in tax revenue (including more than $400,000 to our schools). To simply offset the lost revenue and pay down the debt, the project would have had to pay us $2.7 million in annual taxes. When considering the burden on our schools and public safety personnel, the break-even point was much higher. And yet the developer suggested he might request tax abatements on top of everything else!
“Lucky” for us the economy collapsed and the deal has not progressed. Yet Council has extended a period of exclusivity to this developer that goes through January 2012. I assure you that Ilyse Spertus will vote to end the deal and open the project up to new bidders.
There is something far more important at stake next week than simply improving our development decisions. Governor Cuomo recently instituted a property tax cap of 2%. However, he wanted local governments to have some autonomy so he granted an exemption when there is a super majority vote in local government. For us, that means Council can override the tax cap with 5 votes. This makes the District 5 race extremely important because our seat is very much in play. If Barry Fertel wins the seat, then our Mayor will likely have his 5 votes to override the cap.
You may have noticed that this year Mayor Bramson is sharing lawn signs with the Democrats who are running for the various City Council positions. The super-vote issue is why he’s doing this.
Our Mayor is popular and you may think he’s doing a great job. But that does not mean it is in our best interests to have him wield ultimate power over the city, with a hand-picked Council voting for his every interest. Remember, as Mayor of the whole city there are times when his interests will not be aligned with the specific interests of District 5.
I’m supporting Ilyse Spertus because of her own merits, not as a foil to Barry Fertel. Ilyse is smart, highly ethical, assertive, and is focused on the right issues. She convinced me to join her campaign by bringing up the specifics about Echo Bay and clarifying the relationship between our schools and the City. She is someone who is looking to improve the quality of life in New Rochelle and will be an independent voice on Council.
This posting is long enough already, but if you would like to hear more details about the City, or simply would like to discuss or debate some of the things mentioned here, my door is open to you, my files are available to you, and we can talk about it over a nice glass of wine. Either way, I strongly urge you to vote for Ilyse Spertus for District 5 City Council next Tuesday, November 8th.
One final note. Ilyse has a lot of good ideas about what should be done going forward. You can read some of them here: http://newrochelle.patch.com/articles/new-rochelle-district-5-council-candidate-ilyse-spertus
Adam Egelberg, CFA
adamegelberg@gmail.com
