Beacon housing complex will request PILOT agreement
The owners of a Beacon affordable housing complex plan to ask the Dutchess County Industrial Development Agency for a property tax break as part of a $14.5 million rehabilitation project.
Related Companies hopes to begin the 12-month renovation at Tompkins Terrace by mid-year. It purchased the complex in 2018 as part of a $590 million deal that included 51 other below-market-rate developments in 16 states.
Upgrades will include new flooring, doors, painting and free Wi-Fi in all 193 apartments, which range from studios to four-bedroom units. Kitchens and bathrooms will be rebuilt, while HVAC equipment will be replaced and other energy-efficient upgrades added.
A computer lab will be added to a common area; laundry rooms will be upgraded; water heaters replaced; two new playgrounds built; and new siding and a facade will be installed. In addition, 10 apartments will be made compliant with Americans With Disabilities Act standards.
The company said it will spend more than $75,000 on each apartment, according to materials presented to the Beacon City Council on Tuesday (Jan. 17).
In order to make the project work, Related representatives told the council that the company will apply to the IDA for a 40-year payment-in-lieu-of-taxes, or PILOT, agreement. It would replace an existing PILOT for Tompkins Terrace approved in the 1970s by the state Division of Housing and Community Renewal.
The agreement would be the key to maintaining affordability at the complex, said Justin Glanda, a Related representative.
“The lender and our partners — they need stability around what the taxes are going to be,” Glanda said. “What do market-rate housing facilities do if their taxes all of the sudden go up? They charge their renters more money, and that contributes to inflation and all the other problems that we see on a macro basis today.
“If you are a homeowner and you get a surprise 10 percent increase to your tax bill, that could definitely mess up some families’ budgets; the same thing happens at an apartment facility such as Tompkins Terrace, just on a much more impactful level,” Glanda said.
The development has several agreements in place that ensure affordability. Thirty-eight units are restricted to households earning 50 percent or less of the area median income (AMI), which, in Beacon, is equal to a four-person household earning a maximum of $56,200. The remaining 155 apartments may be rented to households earning 60 percent or less of the AMI ($67,440 for a household of four).
In addition, a contract with the Beacon Housing Authority covers 61 units and ensures those tenants pay no more than 30 percent of their household income on rent. Approximately 95 other families benefit from using mobile housing choice vouchers.
If the PILOT is approved, Related, which owns and manages more than 50,000 units of affordable housing nationwide, would commit to the same 40-year term for keeping the apartments below market-rate rent, Glanda said.
The proposed agreement would begin with a Year 1 payment of $310,000 to be split between the city, the Beacon school district, Dutchess County and the public library. The payment would increase each year; over the life of the deal, Related would pay $19.75 million in place of annual property taxes. Under the current PILOT, the annual payment is 10 percent of the rent collected in the prior year, or about $284,000 for 2022.
Like Mirbeau Inn & Spa Beacon, the luxury hospitality company that plans to redevelop the 64-acre estate that includes the former Craig House psychiatric hospital, Related is asking the IDA for an “enhanced,” or longer-term, PILOT. The IDA has asked Related, like Mirbeau, to secure letters of support from the city and school district.
The IDA will hold a public hearing on the project before its board votes on the PILOT application.