The Watertown City Council informally rejected Monday night a proposed a tax-abatement deal for a New York City developer who wants to invest about $2 million in renovations at the 40-year-old Maple Courts Apartments.
Last week, Allison H. Kunis, vice president of the Related Cos., met with the City Council about the proposed 30-year tax-abatement deal.
Council members took no action then on the payment-in-lieu-of-taxes deal, saying constituents would oppose it. But the issue came up again at Monday nights meeting, and they agreed they are not interested in pursuing the PILOT arrangement.
The company wants to purchase the affordable-housing apartment complex on Weldon Drive for $3.1 million. It would invest about $2 million to rehabilitate the five apartment buildings. It would pay an additional $1.3 million in other costs, such as architectural and engineering fees, and set aside money in reserve that would be used for future operating costs.
At last weeks meeting, Ms. Kunis proposed a 30-year PILOT that would include a $24,000 payment for the first year and subsequent 3 percent annual increases. Council members advised her to continue negotiating the deal, and she came back earlier in the day with two counterproposals, one starting at $30,000 with 3 percent annual increases and the other with an initial $36,000 payment and subsequent 2 percent increases.
Is anyone interested in a PILOT? Mayor Jeffrey E. Graham asked council members.
Not at those numbers, Councilman Joseph M. Butler Jr. said.
Ms. Kunis, who did not attend Mondays meeting and could not be reached for comment, wanted to pursue tax-abatement deals with all three jurisdictions: the Watertown City School District, Jefferson County and the city. It was unclear Monday night what now will happen to the renovations.
Ms. Kunis argued last week that her company needs the PILOT agreement to obtain enhanced financing from Fannie Mae. But Mr. Graham warned the developer that such PILOTs for housing projects have become political hot potatoes during the past year.
In July, the Jefferson County Industrial Development Agency agreed to support the project and issue up to $4.8 million in tax-exempt bonds.
The current owners, Maple Courts Apartments, recently paid a $36,000 tax bill on the property. Last year, Maple Courts Apartments completed a 40-year tax deal in which the company paid just $12,000 under a state private housing law used for affordable housing projects that receive federal funding, City Assessor Brian S. Phelps said.
The assessment on the property is about $1.5 million, but would jump to $2,997,400 if the New York City company ends up buying the property, Mr. Phelps said. That would generate $70,769 in taxes at the current rates, he said.
In the past year, tax abatement programs for proposed town of Watertown apartment complexes became sources of debate on the city school board. Construction has since started on a 394-unit complex off County Route 202 and 296 apartments off Route 3, behind the Target store.
The work at Maple Courts would include extensive interior renovations, replacement of appliances, installation of new flooring, painting and parking lot improvements.