A housing developers plan to build Jefferson Apartments, a 330-unit complex located off Route 11 at Johnson Road in the town of LeRay, has been scrapped.
Unable to strike a palatable financial deal with local officials, Dawn Homes of Albany will no longer pursue funding for the project, according to an email sent to town officials last Friday from Vice President Mark J. Rosen. The developer started talks with the Community Rental Housing Program composed of officials from the Jefferson County Industrial Development Agency, Jefferson county, Development Authority of the North Country and Fort Drum Regional Liaison Organization last December but ultimately decided that the project didnt merit a long-term investment.
In the written statement sent to the town, Mr. Rosen said that after careful consideration and an analysis of the risk-reward ratio, we cannot at this time go forward with Jefferson Apartments. It just doesnt work out for our team at this time.
Mr. Rosen could not be reached for comment Monday.
Numerous factors were involved in the decision, but the main hurdle thwarting the developers plan were the rental discounts offered by the Armys Basic Allowance for Housing program, which the company decided wouldnt offset project costs over the long-term, said Steven T. Harter, LeRay administrative clerk to the supervisor, who attended discussions with Supervisor Ronald C. Taylor.
Based on recent feedback from the developer, the subsidies for the BAH program werent enough to cover the required payment based on the project cost, Mr. Harter said. They didnt have the proper investment to cover their debt based on what they wanted to rent the apartments for.
Mr. Harter added that the municipalities involved were all cooperative during the talks and that the 10-year payment in lieu of taxes agreement the developer sought wasnt a deal killer.
The three municipalities involved had originally agreed to a three-year PILOT for the project which initially called for 402 units, not 330 when the developer first sought approval in October of 2010, Mr. Harter said. But the developer then backed out of the project because of the difficulty in finding financing.
This time around, however, the developer sought a 10-year PILOT to finance the project, Mr. Harter said. Jefferson County had tentatively approved that plan, he said, while the town of LeRay and Indian River School District had tentatively agreed the original three-year PILOT, neglecting to approve the 10-year deal.
Nevertheless, I dont think the PILOT had anything to do with it, Mr. Harter said, adding that a plan hadnt been submitted to the parties for approval. They just couldnt seem to get the numbers to work in their favor.
Disappointed that the project is now off the table, Donald C. Alexander, chief executive officer of the JCIDA, said that officials held at least 20 meetings with the developer since December for negotiations. A number of factors were involved in the fallout, he said, but there were never serious discussions about a PILOT agreement.
They were having some difficulty closing the gap between what they needed the project to provide in terms of income and what they would have to spend, he said. I think the community was willing to make a large financial commitment and went as far as it could go to make this project happen.
The project could also have ramifications on the town of LeRays plan to build a mile-long road on the property to connect Johnson and Taylor Roads, a $3 million dollar project it was expecting to garner funding for from the Dawn Homes agreement. Despite that setback, though, the town will still seek to approve funding for the project to break ground this spring, Mr. Taylor said.
The project, which has secured a $500,000 grant, will now need Jefferson County funding.
Its a vital, necessary road that we hope will join several future projects in the area, and its important for the town to move forward this spring, he said. Developers cant build without a road there, and were hopeful that more of them will pursue projects.