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2010-02-08 SP MTG.#7 SPECIAL TOWN BOARD MEETING 02-08-2010 MTG. #7 576 SPECIAL TOWN BOARD MEETING MTG. #7 FEBRUARY 8, 2010 RES. 105 7:03 p.m. TOWN BOARD MEMBERS PRESENT SUPERVISOR DANIEL STEC COUNCILMAN ANTHONY METIVIER COUNCILMAN RONALD MONTESI-ABSENT COUNCILMAN JOHN STROUGH COUNCILMAN TIM BREWER Town Counsel Mike Hill Assessor Terry Ross Appraiser Ted Bigelow Sr. Planner Stu Baker Representatives of John Burke Apartments Town Counsel from Queensbury School Supervisor Stec-Opened the Meeting. DISCUSSION: John Burke Apartments Redevelopment Supervisor Stec-Spoke on the refurbishing of John Burke Apartments and financing available for the project…and reorganization including the name of the controlling entity to allow advantageous financing for the project. Also a potential for a pilot agreement which would impact the County,Town and School…noted there would be the same number of units, this is refurbishing the existing units. Town Counsel Mike Hill-The Town has reviewed the Private Housing Finance Law, under that law there are a number of responsibilities for the Supervising Agency The Town Supervisor…also looking into the New York State HFA to enter into a multi party agreement assuming the responsibilities that would have fallen to the supervising agency waiting for a response. Supervisor Stec-This is all new to us and it is a thirty year responsibility… Councilman Strough-What is in it for the Town, what benefits besides giving up taxes do we get? Representative of John Burke-We will be doing a complete renovation, carpeting , siding, windows, appliances, kitchens, baths, update building systems…noted it was difficult to find the money to renovate projects…we have the money now to do a complete renovation…there are two hundred and twenty seven units, seventy five are senior units a hundred and fifty two are family units. On the Senior side there are sixty eight, one bedroom and seven, two bedroom, on the family side there are twenty, one bedroom many of which are taken up by Seniors and eighty, two bedroom and forty one three bedroom units. Representative of John Burke-To answer your question more directly what is in it for the Town it is the preservation of John Burke Apartments which is the preservation of the affordable housing in this community. The apartments are forty years old and reaching the end of its useful life, if it is not redeveloped it will deteriorate in a much faster fashion. Councilman Brewer-Requested more information on who is financing the project. Representative of John Burke-Liberty has a purchase contract to acquire the project, with that contract we have gone to HFA and told them we would like to redevelop the entire project. We will be required to rent to low income people, we will not change the mix at all. SPECIAL TOWN BOARD MEETING 02-08-2010 MTG. #7 577 Representative of John Burke-Noted there is a wait list for John Burke of two years. I think the community will benefit with these changes… Councilman Strough-What is the monthly rent fee for a two bedroom? Representative of John Burke-It is based on income, 30% of the income. Councilman Strough-Based on family income and family size. Representative of John Burke-Medical expenses are adjusted off … basic rent $675. the tenants will pay 30% of their income and the government pays the rest.. will have meetings with the tenants, noted there may be units to be moved into while renovations are being done, others are asked to stay away when kitchens are done, taking approximately one day to complete…if there are special needs we can set them up at the Ramada if they need to get out of their unit… Councilman Strough-What are your needs for the Pilot program? Representative of John Burke-We have gone to HFA for financing, their program is a combination of issuing tax exempt bonds and allocating loan composite tax credits. As part of their underwriting we want to ensure the project has sufficient income to pay back all of its expenses including HFA financing. As part of that, they have looked at tax payments, they have asked that we have a Pilot. In their experience once one of these properties is developed it is very often the case the taxes increase, so they would like to know going forward that they can underwrite this and ensure that the property will be successful that we have a set amount of taxes set for the next thirty years of the bonds. Councilman Strough-Is the Pilot mandatory? Representative of John Burke-It is not mandatory. If we do not get it, the likely hood of being able to finance this deal with HFA is greatly diminished. Councilman Brewer-What about rent control? Representative of John Burke-We are limited on what we can charge. There is a published rated that come out from HUD every year that is the amount of rent increase in that year. Councilman Brewer-After the renovation how much rent increase could the rectors expect? Representative of John Burke-No ones rent is going to increase as a result of the renovation. Councilman Strough-Questioned what the Pilot would begin with? Representative of John Burke-We have proposed for the Pilot to begin at the amount of taxes that the property currently pays, it would be subject to adjustments based on HUD increases in the operating cost adjustment factor, the OCAF. Town Assessor Teri Ross-They are at the 581 full assessment. Supervisor Stec-Special District are not part of the Pilot Program…this would be for Town, County and School taxes. Councilman Strough-In the big scheme of things the School would not realize a tremendous loss in income going this route. Town Assessor Ross-It depends on what the rates goes up at. Supervisor Stec-The Pilot gives stability but does it translate into less aggregate taxes paid? SPECIAL TOWN BOARD MEETING 02-08-2010 MTG. #7 578 Representative of John Burke-It would depend on the OCAF, the reason why we chose that it is a set number that we know we are going to get. Supervisor Stec-Questioned what they pay in School taxes? Representative of John Burke-Almost 54,000 a year. Reviewed the Pilot under the Private Housing Financing Law where the Town approves the Pilot not the IDA. Supervisor Stec-I have to think that we have flexibility if we are not comfortable with thirty years we could say we could go less. Representative John Burke-The money is so scarce for these types of projects that the investor along with HFA want the thirty year pilot. We gave a list of criteria that we need to satisfy in order to get this deal done and this is one of them. We will be happy to go back and explore things but this deal is underwritten so closely that it may be a problem that we have to have this or we will not have a deal. Councilman Strough-Questioned if the mix of Senior vs. family can be changed? Representative of John Burke-No, we cannot change the mix. Councilman Strough-I do not think the Town is interested in being the supervising agency. Sr. Planner Stu Baker-What other municipalities are the SA? Representative of John Burke-City of Rome, City of Norwich, Village of New York Mills, the Town of Ticonderoga? Councilman Brewer-How many years of experience have they had? Representative of John Burke-New York Mills, was built in 2005. Councilman Brewer-Maybe we should talk to them and see how they work through it. Supervisor Stec-Questioned the obligations the town would face if they were supervising agency? Town Counsel Hill-There are both annual and ongoing tasks that the supervising agency has to do and also what I will call situational obligations that would apply under certain circumstance. We can try to limit the scope for which the supervising agency status and make it conditioned upon HFA’s ultimate assumption of all the other responsibilities under the Private Housing Finance Law. Supervisor Stec-Could the County be S A? Town Counsel Hill-No. Supervisor Stec-S A’s come into play for this particular scheme for financing? Town Counsel Hill-It comes into play under Article 5 of the Private Housing Financing Law. Representative of John Burke-The reason why we went to Article 5 is the Pilot. Supervisor Stec-The annual adjustment factor what types of things make that number larger or smaller? Representative of John Burke-It is a Federal Government number, … SPECIAL TOWN BOARD MEETING 02-08-2010 MTG. #7 579 Representative of School Dist.-The School has no official position on this yet, I can only speak for myself, I think the length of the pilot is initially a concern and it may make it a little easier to swallow if we could increase the guarantee what we were getting over the term of the pilot as the years go by. If this wasn’t 581A and they put six million dollars worth of improvements in it and assuming Terri made that all assessable the district is looking at about $112,000 in revenue. Supervisor Stec-If it stays in roll section 8 that is a mute point. Representative of School Dist.-Speaking for me it seems to me thirty years is a very long period of time for anything under any circumstances. Representative of John Burke-Will send the town the history of the OCAF. Appraiser Ted Bigelow-One of the purposes of the Pilot is to make the tax credits much more sellable, that is what their investors looking for is insurance. From the reval the assessment was 4.7 million then the 581A came into affect and it was lowered by about 35%. What will be the starting point for the assessment? The assessment that they are looking at is from three years ago, 2007 it has been suggested was lets true it up based on your renovations, six million dollars into the project. They are not going to be raising their rents because they can’t to cover that, but what happens is based on your budgets that I reviewed, there is going to be an increase in their income from the government of over five hundred thousand dollars. There is going to be corresponding increases in expenses but I think it would be prudent to do a 581 review based on their after rehab budget. It is going to be at a higher assessment then it is now, that is probably the starting point that make sense the project is going to be brand new lets figure the assessment based on what it is going to be at that time. How you adjust it from there becomes problematic. They have restrictions that they have to live by. Based on the budget that I looked at the five hundred thousand dollar increase in your budget is because of rent subsidy. Representative of John Burke-That has not been approved yet. Appraiser Ted Biglow-You will not be doing that unless you get that. Representative of John Burke-We have to have it to support the new debt service. The current debt service is very low, between a combination we are getting about four million dollars in tax credits our over all budget is about fourteen million we have ten million dollars that we have to service. Ted Biglow-From the towns perspective we do have another low income housing in town, the Cedars and they have a 581 status and they do not have a pilot… Representative of John Burke-That was developed under a different program. Councilman Strough-The newer number would set the standard for the pilot. Ted Biglow-I have run preliminary numbers on the budget that you gave me, it does show a slight increase but I have questions on their budget before I can finish the analysis. Councilman Strough-What would be the supervising role of the Town? Councilman Brewer-What do we have to do and what are we responsible for? Representative of John Burke-The memo that was prepared for the Town has a list of responsibilities etc. There are things that the Town would have to monitor and review and approve on an ongoing basis. If this town approves the HFA financing you have covered all the bases. Town Counsel Hill-I would disagree I think there are distinct obligations and responsibilities under the Private Housing Finance Law and I do not know why other SPECIAL TOWN BOARD MEETING 02-08-2010 MTG. #7 580 municipalities apparently choose to not exercise them or not comply with them. These are obligations as I can see that the supervising agency is responsible for. There may be a way to handle that. I understand what Mr. Brennan is saying that the HFA through the close supervision that they are exercising could essentially do the same thing and stand in the shoes so to speak of the supervising agency. If we can achieve a formal agreement with HFA in a multi party agreement where HFA says town don’t worry we will assume all your responsibilities as supervising agency as an attorney that would certainly give us a lot more comfort. Councilman Brewer-No. 6 is the one that concerns me the most. Town Counsel Hill-If the redevelopment company defaults on its mortgage obligations and the mortgagee assumes control of the project the operation of the project is subject to regulations prescribed by the supervising agency. The supervising agency would be required to set rules for the operation of John Burke apartments Private Housing Financing Law Section 111. Councilman Brewer-What do we know about the regulations and how would we set those rules? Representative of John Burke-You do not have to set. Article 5 of the Private Housing Finance Law is set up in the event the supervising agency wants to do something it can. Supervisor Stec-The agreement you are seeking from HFA how long before you get an answer back from them? Representative of John Burke-I am hoping within a couple of days. Supervisor Stec-There are three items to be resolved, the pilot, the SA being two and you need the formation from us sooner rather than later..our next board meeting will be two weeks from tonight we could have a resolution drawn up for the formation with disclaimers that we are not buying into SA so there is adequate protection. Would there be enough time to work out the SA issues after that, that is something I would be comfortable with. Representative of John Burke-The Pilot would be based upon the amounts being paid by the School District and to the County. As of today the Town has no tax rate as we go forward with this in the future and the town has a tax rate I understand there would not be any money coming to the town because it is set as of today…would there be a reopening of the agreement if a tax rate is enacted? Supervisor Stec-Would a highway tax be in or out of a pilot? Spoke about using local labor as much as possible on the rehab project. Councilman Metivier-Are the appliances purchased under tax exempt? Representative of John Burke-No. Unknown-What will happen when we have to replace all this again? Representative of John Burke-We did comprehensive needs assessment, they schedule out when items will need to be replaced, our reserve replacement account will be pre- funded $300.00 per unit per year when it is time to replaced the roofs it will be there. A large deposit will be put into the first year. Also funding an operating reserve so down the road we miss something, there is a fund to draw from. Liberty will have to replace that account if it is drawn down. Councilman Brewer-What kind of public hearing does this require? Town Counsel Hill-First is the consent of the supervising agency to the articles organization to form the redevelopment company, separate from that later you have the approval of the project and the pilot agreement. SPECIAL TOWN BOARD MEETING 02-08-2010 MTG. #7 581 Supervisor Stec-If we get a good answer from HFA in the next ten days we could have a nd resolution at the next meeting of the 22. the consent the formation with what ever additional language that authorizes the agreement in a form acceptable to counsel… Representative of John Burke-Next step would be the credit committee…then they will want the pilot agreement in place before we go to the Board. Town Counsel Hill-Need for a public hearing date on the Pilot to be set for March. Representative of John Burke-HFA have the treasurers buying bonds at a low rate, they th have three dates for closing May 6, August and the end of the year…want us in the first one… Representative of John Burke- We also have to put in applications with HUD and others and we have to requested at the next Town Board meeting to approve the formation of the redevelopment company for one year..that would allow us to get employee identification numbers … then if we get the inter-municipal agreement in the next couple of weeks then we could provide us with another consent that would amend the articles of organization so it would have a perpetual life. Supervisor Stec-I would like to not have them held up for the employers identification ndth number, will try to do that for the 22. …set the public hearing on the Pilot for 15 of March… DISCUSSION: Wiswald Property Rezoning Request Requesting property be rezoning for office. Supervisor Stec-Updated the Board on the Subdivision Regulations-now informally at APA for their review that will come back to the Sr. Planner to clean up the regs and then st to the Town Board…on March 1. to pass a resolution to do a neg.SEQRA and formally refers this to APA and Warren County Planning Board and everywhere it has to go and sets a public hearing in April…I didn’t want to start the rezoning until we got this out to formal review by APA…The six month review will be started in late March. After the subdivision are out then I want to get the sign regs up to APA for their informal review. Resumed discussion on Wiswall property, agreed to Office zone…will have a public th hearing on March 15… Town Counsel Mike Hill-spoke to the Board regarding three hundred foot set back on West Mountain and Bay Road. RESOLUTION ADJOURNING TOWN BOARD MEETING RESOLUTION NO. 105, 2010 INTRODUCED BY: Mr. Tim Brewer WHO MOVED FOR ITS ADOPTION SECONDED BY: Mr. John Strough RESOLVED, that the Town Board of the Town of Queensbury hereby adjourns its Town Board Meeting. th Duly adopted this 8 day of February, 2010 by the following vote: AYES: Mr. Metivier, Mr. Strough, Mr. Brewer, Mr. Stec NOES: None SPECIAL TOWN BOARD MEETING 02-08-2010 MTG. #7 582 ABSENT: Mr. Montesi Respectfully submitted, Miss Darleen M. Dougher Town Clerk-Queensbury .