Ossining Board Objects to Harbor Square Tax Break

At the Dec. 10 Town Board meeting when the "Payment in Lieu of Taxes" (PILOT) proposal for the riverfront development on the agenda, Supervisor Susanne Donnelly read this statement:

The Town of Ossining welcomes development of real property that is fully within the law.  We understand that an owner of a property is fully within its right to develop as they so choose, but it must be in accordance with all applicable laws, including the payment of property taxes. 

In the current economic environment, tax revenues that we need to provide necessary services are lower- our mortgage tax revenues are lower, sales tax revenues are lower, franchise tax revenues are lower, property tax revenues are lower. That is why, now, more than ever, we must stand firm on equity and fairness.

Tonight’s vote is fair to all taxpayers in Ossining WHO CONSTANTLY REMIND US THAT WE WERE ELECTED TO REDUCE THEIR TAX BURDEN. We cannot support a proposed PILOT, or Payment In Lieu of Taxes, that will unquestionably increase the demand for services, but shifts the tax burden in excess of $2.3 million onto our taxpayers.

The developer of Harbor Square seeks permission to circumvent the property tax laws that apply to all property owners in the Town of Ossining.  According to the Westchester Industrial Development Agency, PILOT (Payment in Lieu of Taxes) plans should be used for business growth such as industrial manufacturing, commercial, and R&D.  The IDA’s guidelines for claiming Real Property Tax Exemptions does not even include an exemption for development of Real Property.  The proposed residential PILOT would inappropriately excuse the developer from paying over $2,300,000 in tax revenue that otherwise should be collected and distributed in the same way as every residential taxpayer’s taxes are collected and distributed by the Town. 

The potential tax losses from the proposed PILOT are show in image attached.

Other residential property developers have paid their fair share of taxes, and permitting this individual developer to circumvent centuries-old tax requirements sets a dangerous and irreversible precedent for treatment of future developers and subsequent developments. 

It is possible that the developer’s request for tax reduction may be motivated in part by its financial condition resulting from its using Harbor Square as collateral to take out mortgages totaling $14,400,000; if this is true, we cannot permit the taxpayers to be held responsible for the developer’s profits and/or other financial concerns.

In any event, the fact that the principals of the firm used Harbor Square as collateral to take out mortgages totaling $14,400,000 demonstrates to this Board that there was consensus between the developer and the issuing bank that the property was worth no less than $14mm at the time of the mortgage.   Therefore, despite Harbor Square’s tax grievance regarding calculation of the 2014 taxes, the Town is confident that the current assessed value of $9,600,000 will stand up in court, especially since the Village Board has recently approved a new site plan for the property that is shovel ready. With respect to the developer’s tax grievance, it is important to note that no action taken now will result in any tax refund to the developer.

Some residents have been vocal about being 100% fair to all parties in all dealings, but now in the case of Harbor Square wish the Town Board to do what the developer wants.  Our pledge to each resident and commercial property owner is to have fair and equitable assessments on property in the Town.  That is why the Town of Ossining, and numerous other Westchester municipalities, is beginning a complete re-assessment of all properties beginning in the 2nd quarter of 2014.  This Board feels strongly that the proposal to excuse Harbor Square from its obligation to pay $2.3mm in property taxes on the eve of a major revaluation is contrary to our mission to instill fairness in property taxation and would send precisely the wrong message to those who demand and are entitled to fair distribution of the tax burden.

The developers have indicated that, without approval of this proposed PILOT, they will not build the development. There is no good reason for the developer not to build the development if it is required to pay its property tax obligations, especially since the building will contain rental units that, once rented out by the developer, will offset a portion of the developer’s tax burden. Therefore, the developer will be able to recoup the outlay of its tax obligation by charging rent. If they refuse to build, keeping in mind they have an approved site plan, then we welcome them to sell the property and let Ossining move on.

We are an Independent Board elected by the residents of Ossining- we cannot govern as others want us to, nor can we tell others how to govern.  However, we feel a responsibility not to abdicate our role in this process- we made our residents a promise to do what we feel is right for this community which includes fair distribution of taxes, and we do not plan to go back on that promise.