School board requests payment as part of PILOT
Mirbeau Inn & Spa has agreed to contribute to a “community fund” to offset revenue the Beacon school district could lose if Dutchess County grants the luxury hospitality company a property tax break on its development of the Tioronda Estate on Route 9D.
The terms of the agreement have not been released, but the school board said during its Monday (Feb. 6) meeting that it would write a letter to the Dutchess County Industrial Development Agency supporting Mirbeau’s application for a 15-year payment-in-lieu-of-taxes, or PILOT, agreement. If approved by the IDA, the plan would allow Mirbeau to make an annual payment that would be distributed to the school district, the city, the county and the Howland Public Library.
The payment would be based on the tax assessment of the 64-acre parcel, which includes the former Craig House psychiatric hospital, but at a reduced rate.
The IDA asked the city and school board — which would receive the largest cuts of the payment — to submit letters of support. Beacon officials wrote a letter in November after the City Council discussed the matter in a closed session, but the school board balked, arguing that it stood to lose essential tax revenue.
Under the PILOT agreement, the assessment of the Mirbeau property — which is sure to increase as the company develops the parcel — would not count toward what is known as a “tax-base growth factor.” The growth factor is a mechanism through which the state allows school districts to increase their tax levies based on an increase in taxable property assessments.
As high-priced development has boomed in Beacon, the district has benefited from nearly $2 million in additional tax revenue in the last three years.
“I don’t think we would have been able to come to an agreement with Mirbeau if the school board were not so unified on the importance of a community benefit fund being added to the PILOT agreement,” Board President Meredith Heuer said on Thursday.
The IDA will hold a public hearing on the Mirbeau project before its board votes on the PILOT application.
Tompkins Terrace
Related Companies, the owners of the Tompkins Terrace low-income housing complex, is asking the Beacon City Council to approve a 40-year PILOT agreement in advance of a $14.5 million rehabilitation project. The company said last month that it planned to ask the Dutchess IDA for the PILOT but pivoted a week later to the city.
Under a state agreement, Related, which purchased Tompkins Terrace in 2018, makes an annual payment equal to 10 percent of the rent collected in the previous year. (The payment for 2022 was about $284,000.) The company has proposed a new agreement that would begin with a Year 1 payment of $310,000 and increase 2¼ percent each year, for a total of $19.75 million over four decades.
Related said it plans to spend more than $75,000 per apartment to upgrade all 193 units. The city says it will add provisions to the PILOT guaranteeing that tenants cannot be forced out and that Tompkins Terrace rents remain below market rate.
Although not required by law, the council held a public hearing on the proposal during its Jan. 30 meeting. Beacon resident Theresa Kraft asked if the city intended to offer financial assistance to other lower-income housing complexes, while Michal Mart cautioned City Council members to make sure the apartments are not allowed to deteriorate again.
In addition, Mart urged the council to be “savvy and discerning” in representing the interests of taxpayers and Tompkins Terrace residents and to “understand fully the financial implications of your decision.”
Afterward, City Administrator Chris White noted that the PILOT would ensure affordability at a critical time, because the rent-subsidy programs governing parts of Tompkins Terrace are due to expire soon. “We’re not getting a renovation for a 40-year agreement,” he said. “We’re getting 40 years of this remaining affordable. If this [complex] goes to market, those rents are going to skyrocket.”
The next step for the City Council is to review a draft agreement with Related, likely during a workshop this month or in March, White said.
So, it’s a payoff and a slush fund? Who will determine how those funds gets used? Who will keep track of the spending? Who will be the beneficiary of these funds? Accountability?
These “proprietors” will be charging top dollar for their products and services, and they want a tax break. I am all for making money but your elected officials are selling our souls. I just want to thank the individuals responsible. I did not elect any of you — not only are you not representing me, you are not representing our city. Remember, the traffic we are dealing with now will be worse. The quality of your lives will be even more diminished with the crowds. The rudeness — how much more will it take for it to stop?
All this for 2 1/2 percent of a sales tax cut? Not feasible. No accountability, a reckless government operating by the seat of its pants, with no experience, just feelings and emotions. Just connected individuals with cash claiming to care for you. Yay Beacon! Just put a big “for sale” sign at every entrance to the city and on the mountain.
Now that companies are developing these long fallow spaces, the City of Beacon decides to stick it to the school district by giving away the store. A community fund is great, but paying your fair share of taxes for 15 years would be much better. [via Instagram]