The Choo Choo PILOT train is on the tracks. The subliminal message sent by the city mayor and city attorney is "full speed ahead." They have placed this PILOT tax break request on the March 10 City Council agenda.
They are turning a deaf ear to groups and individuals who are calling for an examination of the program and to those who are suggesting changes to the Choo Choo agreement if it is allowed to go forward under the existing program.
The city's current program makes a PILOT tax break virtually automatic for developers proposing "downtown" apartments who say they will rent at least 20 percent of their units to low and moderate income persons.
We have no "but/for" test requiring applicants to demonstrate that the tax break is necessary. We allow them to set rents at over $700 per month for units smaller than 400 square feet.
We don't require income verification and monitoring to be done by an independent third party. We don't have mandatory clawback language. We do not prohibit transferring the tax break if the original developer sells the property. The public is not afforded an opportunity to comment to the decision makers before they vote on in-lieu agreements. We apparently allow "soft" costs (legal, architectural, engineering) for a PILOT project to count as part of the "investment" number.
The Choo Choo application was submitted under the existing program, which does not require a "but/for" test. That ship may have sailed on this project. However, if someone at City Hall or on the City Council would become a champion for the public interest, it would still be possible to add wording to this PILOT agreement to address such issues as income verification, clawback, and flipping. Given the unusual "use' aspect of this application, there could also be a provision added that the affordable housing units could not revert to hotel rooms in the future.
I attended the recent meeting of the city bond board when they took ownership of the UTC Five apartment project on Lindsay Street and approved the application for the Choo Choo. The same local attorney was there, representing both clients. In the applications submitted to Rivercity, the legal fees for the Lindsay Street PILOT show as $25,000. The Choo Choo application shows $100,000 for "closing and legal."
Why the huge difference?
Is it possible that some of the legal fees for the proposed Comedy Catch, music venue, restaurants etc. made their way into the affordable housing PILOT? The resolution in the online council agenda says that the real and personal property to which the bond board will take title is described in Exhibit A of the PILOT agreement. Exhibit A is blank.
Helen Burns Sharp