, KingstonCitizens.org calculates 343.5 spaces required by code, leaving 76.5 public spaces.
It strains credulity that 143 spaces will satisfy the demand of the project.
Subsidizing parking spaces by more than $2,400 per year for 25 years is a boondoggle.
Applied to all 420 spaces, I calculated that the PILOT provides an annual subsidy of more than $2,400 per space for the 25 years of the PILOT. If the 277 claimed "public spaces" are considered, the annual subsidy is more than $3,700 per public space. If there is no increase in the number of public spaces from the current surface lot, which would be the case if zoning regulations were followed, the annual subsidy is more than $7,300 per public space. I am adamantly opposed to using money that would otherwise go to educating our students to hugely subsidizing parking spaces.
My spreadsheet analysis is here.
What are the real costs of the parking garage?
The developers claim the cost of the garage to be $17,000,000. Information needed to evaluate the projected costs of the parking garage are being concealed by the developers as "confidential" and "trade secrets." Rodenhausen Chale & Polidoro LLP states in their July 17 letter to the UCIDA in the section "The Applicants' Financial Analysis Is Insufficient":
"The Applicant's financial statements also fail to address whether any part of the garage construction costs would be incurred even without the garage. Activities such as demolition, excavating, regrading and installing the foundation for the entire building are tied to the construction of the overall structure and should not be considered when determining the costs of the garage."
What are the options of paying for the parking garage?
On page 3 of the
October 23, 2020, NDC report is the statement, "The PILOT is not the only source for covering the cost of the parking garage" (emphasis added). There is no discussion of what other source might be available. I can identify that when $17 million is financed at 4% over 25 years, the total amortization is $26,919,679 and the interest cost is $9,919,679. An interest rate of 2% is feasible for a municipal borrower. If $17 million is financed at 2% over 25 years, the total amortization is $21,616,571 and the interest cost is $4,616,571. The difference of $5,303,108 is a lot of money.
I have heard from the developers' side that if the City were to build the garage, it would be too expensive, because it would have to pay prevailing construction wages. Let us assume that the prevailing wage would increase the total cost by 20%, so that $20,400,000 would have to be financed. At 2% over 25 years, the total amortization would be $25,939,886 and the total interest cost would be $5,539,886. This is still $979,793 less than the developers' amortization total.
Has the City done a similar analysis?
Use an annual inflator for future Tax Levy based on historical data.
The developers, the IDA, the city, and NDC like to use 2% as the annual inflator for the total tax levy in their projections. The average annual increase for school tax levy for 7-19 North Front St, one of the parcels to be used for the project, since 2011, when the tax cap legislation was enacted, is 4.12%. (2011: $7,914, 2020:$11,379)
Changes in the school tax levy for any parcel in the Kingston City School District depends on the Tax Levy Growth Factor implicit in the budget annually approved by voters, change in the Full Taxable Value of the parcel (a combination of the assessment and equalization factor), and the proportion of Full Taxable Value in the City of Kingston compared to the other municipalities in the district. As long as Kingston remains a "hot" real estate market, the tax levy increase in the City will probably be more than in the rest of the district.
In the current and presumed future real estate environment in the Kingston City School District, a reasonable inflator for the school tax levy is 4% rather than 2%. If the combined annual inflator for the city and county levies were presumed to be 1%, an overall inflator of 2.8% would be reasonable. If the combined annual inflator for the city and county levies were presumed to be 2%, an overall inflator of 3.2% would be reasonable.
I am opposed to giving a public street to the Kingstonian Project.
The street grid of Uptown Kingston is pre-Revolutionary. Fair St. Extension provides access to the Stockade area from the Kingston Plaza. Eliminating it will cause permanent inconvenience and added miles traveled by city residents and visitors. None of the analyses that I have seen even mention the commandeering of that street as a Project Benefit (also known as a Public Cost).
Federal Opportunity Zones
The Kingston Stockade District is in Census tract 9524 which is a Federal Qualified Opportunity Zone (FOZ or QOZ). Opportunity zones were created as part of the Tax Cuts and Jobs Act of 2017. See this
Ulster County web page and this Internal Revenue Service web page. Who are they designed to benefit?
I’m not against people making money. I prefer it not to be done at the expense of school children. And it is prudent to know what financial opportunities developers have other than PILOT agreements. Kingston resident Ilona Ross has
written extensively on this.