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Edge-On-Hudson Developer’s Request for Tax Breaks Sets Off Alarms in Sleepy Hollow

by Robert Kimmel

Relations between the Village of Sleepy Hollow and Lighthouse Landing, LLC, took on a frosty tone during the past two months when it appeared the developer of the former GM site might be seeking property tax abatements. The developer of the 66-acre riverfront project, Edge-On-Hudson, applied to the Town of Mount Pleasant Industrial Development Agency in November for specific tax relief, exemptions from sales tax, use tax and mortgage recording taxes.

The request for a PILOT, a payment in lieu of taxes, came from the developer’s law firm, in a letter headed, “Application of Lighthouse Landings Communities, LLC For Financial Assistance for the Construction and Equipping of the Mixed Use Project in Sleepy Hollow Known as Edge-on-Hudson.”

What raised the red flag among both the Village and the Tarrytown School District officials was a sentence in the letter, that read, “Developer is not seeking any real property abatement at this time, but we note that some relief may be requested in the future.” The village was not aware of the requested action until about a month later, in mid-December.

In a statement provided to The Hudson Independent late last month, the company’s president, Peter Johnson, said, “Edge-On-Hudson has not requested any reduction in property taxes paid to the Village of Sleepy Hollow, Town of Mount Pleasant, County of Westchester, or Tarrytown Union Free School District through its application to the IDA (Industrial Development Agency).” He reiterated that the application was only for “…a reduction in mortgage recording tax and a reduction in New York State sales tax payments on project improvements.”

“The reference in the initial application to future adjustment of PILOT amounts was expressly intended only to cover the possibility of a future agreement between the Village and Edge-On-Hudson for other net benefits to the Village,” Johnson noted.

Misgivings among village officials had increased with the IDA’s notice announcing its December 21 public hearing on the request. In that, the IDA stated it “contemplates” that it would not only grant the “financial assistance” requested, but also, “a partial real property tax abatement consistent with the policies of the Agency.” Sleepy Hollow Mayor Ken Wray told The Hudson Independent that the reference to a property tax break for the development was “alarming.”

At the December hearing, Wray asserted he was “…very disappointed and frankly angry that the Village was not included in this tax relief process between the developer and the IDA, a process that has evidently been underway for some time.” He said that upon “hearing about it just days ago, the Village Board of Trustees reacted very quickly to defend Sleepy Hollow’s fiscal well-being.”

The mayor added that, “What’s best for the Village of Sleepy Hollow is that we continue our relationship directly with the developer as we have for the past year. What’s best for the village and for our school district, is that we levy and collect our taxes directly, without the involvement of the IDA.”

Wray noted the presence of Board of Education President Mimi Godwin at the hearing to argue against a PILOT program that could reduce tax revenue for the Tarrytown School District. He described the Village and School District as having, “…struggled for 30 years when this property was removed from our tax rolls at the behest of a major corporation, General Motors. He was referring to the arrangement Sleepy Hollow had made in 1985 with GM to a property tax abatement, devised to keep GM’s auto plant operating in the village. GM closed its plant in 1996.

The proposed PILOT agreement, for which the village’s lawyers were to prepare amendments, should, in the mayor’s words, “…state that the property taxes would be equal to the full, aggregate amount of real estate taxes that would have been due, but for the Agency’s involvement,… and that there would be no change in the PILOT amount without the consent of the village. We strongly encourage, and we demand that the IDA incorporate the amendments presented by our lawyers.”

The developer seemingly is in accord with that. In his statement, Johnson asserted that, “Edge-On-Hudson has worked with representatives of the Village of Sleepy Hollow and the local school district to ensure that under the PILOT Agreement, the amounts Edge-On-Hudson is required to pay to the Village and School District cannot be reduced without their consent. “ He stated the PILOT requires his company “…to pay the exact same amounts to the village, town, county and school district as it would have paid if the property was not exempt due to IDA involvement.”

Sleepy Hollow Village Trustee John Leavy was highly critical of PILOT tax relief given to GM in the past. — Photo by Sunny McLean

Sleepy Hollow Village Trustee John Leavy was highly critical of PILOT tax relief given to GM in the past.
— Photo by Sunny McLean

Also appearing at the December hearing was Village Trustee John Leavy, who cited what he called, “…the single most destructive act in the history of the Village of Sleepy Hollow… the PILOT provided to GM upon the promise to keep their plant and 5,000 employees in Sleepy Hollow for 30 years. It forced taxes for the rest of us up at alarming rates for more than a decade…”

“Don’t misunderstand me,” Leavy said. “I support the new development and have worked hard to make it reasonable for the developers to improve the former GM site.” However, he told the IDA Board, “The citizens of the village and the larger school district that serves both Sleepy Hollow and Tarrytown deserve to be treated fairly. No PILOT should be approved that does not continue to match ‘normal’ assessments throughout the development as it progresses.”

As it stands vacant and unimproved, the property tax in effect for the year since Lighthouse Landing, LLC bought the plot from GM, has brought the village $750,000, as opposed to the PILOT sum of $220,000 paid by GM annually, and the school district saw an increase, which will require adjustment.

The Edge-on-Hudson development is to consist of 1,177 residential units, 165,000 square feet of commercial and retail space and a 140 room hotel, along with 16 acres of waterfront public space.

Johnson characterized the requested sales tax incentives as “a contributor to the financial viability of the Edge-On-Hudson project. Over a 15-year period, savings realized could total in excess of $20 million, contributing to the project’s ability to generate enormous positive economic impact for the Village of Sleepy Hollow and surrounding communities,” he maintained.

“Edge-On-Hudson regrets any miscommunications that may have contributed to a perception that property tax levels would be impacted by the IDA application, and has pledged to redouble efforts to improve lines of communication with the Village in the future,” Johnson stated.

An IDA vote on the developer’s PILOT request was expected early this month. As for the amended PILOT, Mayor Wray said, “Our quick and diligent efforts with our attorney, we hope will protect the village and the school district.”

The Industrial Development Agency is a quasi-governmental, public benefit corporation provided by state law with wide ranging authority, and whose mission is to “promote, develop, encourage and assist” in activities that will “advance the job opportunities, health, general prosperity and economic welfare of the people…”

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