Avalon Bay Tax Break Program Not Favored By Some

Several residents expressed their concerns Tuesday night with a proposed program to offer a tax break in exchange for payments from the Avalon Bay luxury rental community, under construction on Union Avenue.

The council voted to make the Avalon Bay section of Union Avenue a redevelopment area so that the council could further consider entering a PILOT program with the developer. Under the program, which is being discussed in negotiations, Avalon Bay would make payments to the borough in lieu of paying taxes for the next 30 years. After the 30 years, taxation would apply.

While the dollar amount of the payments has not yet been decided, the benefit to the borough would be that money that would typically go to the board of education from taxes would go to the municipality instead. The borough would receive 95 percent of the money and the county would receive 5 percent.

However, if the development of Avalon Bay causes an increased cost of education for the school system because of more students, the borough would help fund the increased cost.

Before the council voted to introduce the ordinance by title–with only Council President Glenn Schiffman recusing–residents spent nearly an hour and a half questioning the proposed agreement, which Mayor Jonathan Dunleavy explained is still under negotiation with the developer.

Avalon Bay, a court-ordered development, has been in the development stages since April 2011 and recently broke ground. Dunleavy  totals for the borough as approximately $2.3 million. Throughout the night’s discussions, Dunleavy reminded the public that because the project was court-mandated, the borough’s hands have been tied at various points in the process.

“Being that it’s inevitable and court-ordered, we’re going to make it the best possible return for the borough," Dunleavy said.

Tax Break for Developer

Morse Lakes community resident Maureen Tierney’s major concern was the tax break Avalon Bay would receive through the PILOT program, a tax break she believes the company does not deserve.

“We’re looking at giving this company a major tax break when they can afford to build here,” Tierney said.

Resident Jennifer Altfield, a former councilwoman, said she had a problem with a company that makes a large amount of money receiving a “30-year bonus,” referring to the length of the PILOT program.

“Do the taxpayers get a 30-year discount?” Altfield asked. “No. My taxes doubled and I’ve only been here for 10 years.”

Dunleavy did not deny that Avalon Bay would benefit from the program but insisted it would be worth it for the borough.

“If we’re going to have to give them a benefit to give us a massive benefit, I will do that,” Dunleavy said.

Tierney also asked if part of the agreement will be to reduce residents’ property taxes.

“It’s the initiative of this governing body to pay down debt, invest where needed and try to stabilize and, hopefully, lower our taxes,” Dunleavy said.

He later stated that he will continue to argue that “if we put more money into the municipal coffers to offset taxes, that’s a homerun for the borough.”

Number of Residential Units

Schiffman took issue with the decline in the number of promised units at Avalon Bay, which is now at seven, since the initial proposal. A reduction in units, he said, would mean less revenue the borough would receive.

“This started as 27 low- and moderate-income housing units that got rammed down this town’s throat,” Schiffman said. “Then it was nine. Now it’s seven.”

All members but Schiffman, who had recused, had voted to settle litigation regarding Avalon Bay’s sewer and water hookup fees. A reduction in units, Dunleavy said, was part of that litigation. Dunleavy further argued that the settlement ended up being advantageous for Bloomingdale because the borough received significant counter-claim money in a case attorneys advised the borough Avalon Bay could have easily won.

Tierney said she still thought Avalon Bay “got away with what it wanted to get away with,” as she did not understand what the residential units had to do with sewer and water hookups.

“They bullied us into this,” Tierney said.

Future Developments

Altfield and other residents said they are worried future developers will see the benefits Avalon Bay receives from the PILOT program and demand those same terms.

“This has been done in other communities and they have regretted it ever since,” Altfield said. “They’ve had other builders under a PILOT program and gotten screwed over.”

Dunleavy said residents should not be concerned because PILOT program terms are developed on a case-by-case basis.

Morse Lakes community resident Bob Schiffman expressed concern about the construction expansion Dunleavy foresees along Union Avenue following Avalon Bay. He said he definitely does not want to see an excess amount of residential units because he is already concerned about Avalon Bay’s possible effect on traffic, the school system, crime and the life quality of current residents.

“This is Bloomingdale, not New York City,” Bob Schiffman said. “We would need helicopters to get out of Morse Lakes.”

Dunleavy said he foresees that area being populated by professional offices to accommodate the surge in new residents.

He further urged the importance of professional expansion in Bloomingdale, reminding residents that lack of development and, as a result, lack of proper certifications resulted in the court filings that led to the Avalon Bay construction mandate.

Financial Effect on Bloomingdale

Dunleavy emphasized that he thinks the PILOT program will net more money for Bloomingdale. Council President Glenn Schiffman said he is concerned the low-percentage appropriation to the county would stop the county from awarding grants, such as those for improvements to county roads, to the borough.

Councilman and Finance Committee Chairman Ray Yazdi said he will not vote in favor of the program if he feels it doesn’t make financial sense for the borough.

Dunleavy said that once negotiations are finished, the ordinance that contains details of the PILOT program will be published and made available to residents.