Dutchess IDA to vote on Mirbeau proposal in May
Only one Beacon resident spoke during a public hearing on Monday (April 10) on Mirbeau Inn & Spa’s request to Dutchess County for a property tax break.
The company, which purchased the historic 64-acre Tioronda Estate on Route 9D last year for $10 million, has asked the county’s Industrial Development Agency to approve a 15-year payment-in-lieu-of-taxes, or PILOT, agreement. The agency’s board will vote on the request at its May 10 meeting, said Sarah Lee, the CEO of the IDA.
If the plan is approved, it would allow Mirbeau to submit an annual payment in place of property taxes that would be distributed to the Beacon school district, the City of Beacon, Dutchess County and the Howland Public Library. The payment would be based on the tax assessment of the parcel, which includes the former Craig House psychiatric hospital, but at a reduced rate.
The company has also asked for exemptions from sales tax on the purchase of equipment, materials and services related to the project and some mortgage-recording taxes.
The Beacon Planning Board in December approved Mirbeau’s first phase of plans to restore the long-dormant site. The initial phase, which is estimated to cost $54 million, will include construction of an 85-room inn, a spa with 20 treatment rooms and a banquet hall and restaurant.
If the PILOT is approved, construction is expected to begin in June, with the facility to open in 2025.
On Monday, Ed Kellogg, one of the company owners, touted the financial benefits he believes Mirbeau will bring to Beacon. Restoration of the property will require 240 construction workers, he said, and the inn and spa will create the equivalent of 80 to 140 full-time positions. Kellogg said that salaried employees, such as managers and members of the facility’s executive team, will earn up to $115,000 annually, and hourly employees will make between $35,000 and $50,000 a year.
Even at a reduced rate, he said the property will generate significant tax revenue for the school district and city, which would receive the largest shares of the annual payment. The PILOT is structured so that Mirbeau would pay the property tax it was charged before construction — the city currently values the parcel at $3 million — plus 50 percent of the difference between that base and the taxes on its post-construction assessed value in Year 1. It would then pay an incrementally increasing percentage of the difference each year, peaking at 95 percent in Year 15, before reverting to full tax payments.
The property owner now pays the city and schools about $100,000 in total annual property taxes. Kellogg estimated in December that, under the agreement, Mirbeau would pay $175,000 annually to the school district within three years.
In addition, after school board members argued that the district could lose substantial revenue by supporting the PILOT, the company agreed to contribute $30,000 each year into a school-related community fund for the duration of the property tax abatement. The company has also agreed to allow a spur of the publicly accessible Fishkill Creek Greenway and Heritage Trail to run through the property, along the east side of Fishkill Creek.
Jim Beretta, a Poughkeepsie resident, submitted written comments to the IDA opposing the PILOT.
The incentives requested by Mirbeau “are a transfer of tax burden to the rest of the taxpaying public,” he wrote, noting that Mirbeau charges more than $400 per night at its Rhinebeck inn and spa, which did not receive financial assistance. “This is welfare for the wealthy,” he said.
Beretta was also skeptical of the public hearing, which he said appeared to be a formality before the project is “rubber-stamped” by the IDA.
His wife, Doreen Tignanelli, was the only other person to submit comments. She took exception with an IDA board member’s statement during a meeting last month that the “citizens of Beacon do not understand this PILOT.”
Tignanelli wrote that “the board continually notes the amount of revenue from development of project sites but repeatedly fails to note that revenue would be even greater if the projects were to pay their taxes, in full, without a PILOT.”
The lone Beacon resident to speak during the hearing, Clark Gebman, asked the IDA to extend the public hearing and to provide a “meaningful forecast” weighing the economic pros and cons of the PILOT. The information provided to date has been “needlessly obstructive,” he said.