Tuesday, December 8, 2009

MAYOR YOUNG FINANCIAL CONTRIBUTOR SEEKING HUGE TAX BREAKS FROM EMBATTLED MOUNT VERNON IDA






On Monday December 7th, 2009 the Mount Vernon Industrial Development Agency held a public hearing for a developer Titus Investments, LLC. The developer is looking to receive substantial tax breaks from the IDA and is also a financial contributor of Mayor Clinton Young. The early morning odd time of this hearing would ensure that there would be a low turnout and the nefarious administration of Mayor Young would be one step closer in achieving its goal. The IDA is headed by Mayor Clinton Young.




November 29, 2009
Developer seeks tax breaks from Mt. Vernon for $15.8M apartment complex

Ernie Garcia
elgarcia@lohud.com

MOUNT VERNON — An affordable housing developer is asking the city for property, sales and mortgage-recording tax exemptions to build a $15.8 million apartment complex.


Titus Investors LLC of Elmsford made its request to the Mount Vernon Industrial Development Agency for a derelict property at 60 W. First St. The company wants to build a 43-unit, seven-story building that would offer apartments to households earning 30, 50 and 60 percent of Westchester County's median income, which in 2009 is $73,700 for a one-person household.


The IDA will hold a public hearing on the proposed tax breaks at 10 a.m. Dec. 7 in the Memorial Room at City Hall.


Titus wants to make payments in lieu of taxes of $43,000 a year for 15 years. The city now receives about $21,000 in city and county taxes from the current building on the site, according to Titus' application
.
If the IDA were to give Titus the tax breaks, the company expects to save $312,000 in mortgage recording taxes and $165,000 in sales taxes. Titus argues that the city will reap a 30-to-1 return for every dollar in tax breaks it grants once residents move in, because it estimates that each household will spend about $22,500 a year locally.
The proposed building would be constructed by Trinity Associates LLC of Elmsford, which has a number of properties in Westchester County.


Its projects include the Ossining Trust Bank Flats, a bank transformed into condominium apartments in downtown Ossining, and Horton's Mill Village, a 17-unit townhouse condominium in White Plains.


The public hearing lasted for only 6 minutes. Only two Mount Vernon residents came out to speak out against this project. The rest of the City Council Chambers were filled with the developer, friends of the developer and other unidentified individuals. Before the commencement of the hearing they could be heard sneakily laughing and talking amongst themselves. The expression on their faces gave the impression that they were just going through the formal procedure and the rest was a done deal. One can only imagine that the Young administration promised them everything under the sun. They seemed to have no care in the world.

Last week Mount Vernon exposed visited the Department of Planning and Urban Renewal, the troubled agency where over $1M grew legs and walked away. We spoke with the Carmen Sylvester, the Director of the Urban Renewal Agency, where just a few weeks ago, $12,000 turned up missing. At the time of our visit to inspect the documents for the development project located at 60 W. 1st Street, we expressed our dissatisfaction with this particular development project. We explained to Ms. Sylvester that this project leaves a lot of unanswered questions. Sylvester told us that she has ordered the developers to be present at the public hearing to answer the questions that the public may have.

At the start of the meeting, the attorney for the IDA stated that the public hearing is not a question and answer session and that the speakers would be given only three minutes to redress their grievances. The first speaker was School Board Trustee Charles Stern who was there representing the Board of Education Trustees. Stern let the developers and other representing the IDA know that “We believe this is unsound planning, unfair, and unnecessary.” Mr. Stern was 100% correct with his statement. Mr. Stern then further stated that if the developer would be granted these tax breaks, this project would have a negative impact on an already cash strapped school district.He finished by asking that City Planners please start working with their colleagues at the Board of Education.

School Board Trustee's Charles Stern letter to IDA height="500" width="100%" > value="http://d1.scribdassets.com/ScribdViewer.swf?document_id=23809177&access_key=key-qe60ddfi7f0fvq1y97m&page=1&version=1&viewMode=list">            

The next speaker was Samuel L. Rivers. Mr. Rivers began his statement by saying that he is opposed to any project granting the developer tax breaks but welcomed any development that the developer could fund themselves and that would be market rate housing.

Mr. Rivers called everyone’s attention to the Inspector General Report (OIG) on PILOT programs dated July 8th, 2008. Rivers mentioned that the beginning of the OIG report in Executive Summary, the first sentence states “The PILOT projects as currently administered by the Mount Vernon IDA are not in compliance with New York State Law. Rivers called out other key components in the OIG report such as



Reporting Requirements
• The record in this case suggests that the Mount Vernon IDA has not adhered to the aforementioned reporting requirements. Indeed, if the reporting requirements had been fully complied with, there would have been no need for the year-long inquiry into the status of the PILOT projects. Council members interviewed indicated they had never been presented with an annual report of the number and status of PILOT projects over the past ten years. During the testimony of the IDA Treasurer, the question was asked with regard to the status and availability of audited annual reports of the IDA

Supporting Schedules to Annual Report Are Incomplete

• The audited annual reports presented at the hearing do not contain the State mandated information with regard to PILOT projects. The plain language of the statute requires the schedule(s) attached to the audited annual financial statement to contain "the name of each project, and whether the project occupant is a not-for-profit corporation, the name and address of each owner of each project, the estimated amount of tax exemptions authorized for each project, the purpose for which each transaction was made, the method of financial assistance utilized by the project, other than the tax exemptions claimed by the project and an estimate of the number of jobs created and retained by each project." The schedules presented at the hearing do not contain the aforementioned details for the PILOT projects for the years indicated.

• In addition, the supplemental schedule does not address the issue of jobs retained or created by the project. The inclusion of the jobs information is an audit point for the state comptroller. (Interestingly, according to New York State records, jobs data was reported by Mount Vernon IDA in calendar year 2004 but, there is no jobs data contained in the audited financial statements for 2005 and 2006 which were presented to the Council during the hearings.)[See, attached Exhibit 2] Accordingly, the Mount Vernon IDA PILOT projects are not in compliance with New York State law because (1) the annual reports do not contain all of the necessary information and (2) the reports, to the extent that they were actually created, were not presented to the governing body of the City of Mount Vernon (City Council) as required.

The IDA lacks appropriate internal controls and accounting procedures

• Based upon the testimony and exhibits presented at the hearing, there is no single list of PILOT projects and their status. During the hearings, at least three different lists of PILOT projects were presented and the number of projects identified varied from seven to 14. The various lists were never reconciled. This makes it impossible to know with any degree of certainty just how many projects are active and how much revenue should be expected from those projects.





The Agency is Exposed to Loss of Interest on Late Payments

• The fact that there is no control and logging of the initial due dates for PILOT payments exposes the Agency and City to lost interest payments. The PILOT agreements usually stipulate that late payments will incur interest charges. There is an initial late charge of 5% of the payment due and an additional charge of 1% per month until the payment is made. One needs to know the initial due date in order to properly calculate the interest on late payments.

The PILOT Agreements Are Inconsistent


A review of the executed PILOT agreements reveals an inconsistency in the payment option language. For instance, Section 4, entitled Payment Amounts, in each of the Agreements provides an option for the project owner to make payments of real property taxes or payments in lieu of real property taxes. Section 4(b) PILOT Payment Election states that the owner "must elect during the following Tax Year to pay either (i) a payment-in-lieu-of-taxes equal amount per annum as set forth herein in subsections (c) and (d); or (ii) the full annual real property taxes that would normally apply if the Project was not an Agency project. . . . The [owner] shall make their election pursuant to this subsection on or prior to the 1st of May immediately preceding the applicable Tax Year, by notice in writing to the Agency and the City Assessor at the notice addresses set forth in this agreement. If no election is made by the required date, the election set forth in clause (ii) shall be deemed to have been made. . . ."

Some agreements contain default option language and others do not. The Agreements that do not contain the default option language leave open the question as to what the owner should be paying in the event he fails to submit his election prior to the 1st of May. The absence of an express default provision is an invitation for conflict and confusion. The fact that the default language appears in some and not others leads to the legal conclusion that the referenced language was intentionally omitted; thereby, negating the default.

There are just a few of the points that Rivers brought up before the IDA at the public hearing. Rivers further stated that Inspector General Harry Stokes specifically made 11 recommendations to put in place to prevent fraud, waste, and abuse. Rivers demanded that the results of these 11 recommendations be made public before any vote or further action is taken by the IDA. The Mayor as head of the IDA should see to it that this is done on a timely manner. A lot of questions remain regarding the IDA. Have these recommendations been implemented? Why hasn’t the City of Mount Vernon been working with their counterparts at the Board of Education? What are the recommendations and/or input from other city agencies? It appears that every action taken by this corrupt administration only benefits a few people and not the residents of the City of Mount Vernon.

INSPECTOR GENERAL REPORT ON IDA AND PILOT PROGRAM height="500" width="100%" > value="http://d1.scribdassets.com/ScribdViewer.swf?document_id=23750861&access_key=key-17nwwqx0qoxj5g7walvv&page=1&version=1&viewMode=list">            

1 comment:

  1. The Mayor had said, when he was running, that Mount Vernon had more than its share of low-income housing and he would not accept more.

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