Hudson’s Affordable Housing Project is Dead

affordable housing complexThe proposal to build a 77-unit affordable apartment complex in the City of Hudson crashed and burned Tuesday after the developer failed to convince the city’s Common Council to grant the project tax breaks.

The Galvan Foundation, a non-profit developer and the city’s largest property owner, had worked since the beginning of the year with Mayor Kamal Johnson on a Payment in Lieu of Taxes (PILOT) for the development, which would have provided affordable apartments to low- and middle-income Hudson residents, as well as a floor of commercial space.

PILOTs allow developments to forgo normal property taxes and instead make much smaller payments to the taxing jurisdiction.

In a letter to the Common Council Tuesday, Galvan Vice-President for Initiatives Dan Kent wrote the PILOT did not have the required six votes from the Common Council to pass, and the developer was withdrawing the project.

“Despite [The PILOT negotiation’s] transparent process, the City’s criteria for supporting affordable housing continues to change and remains unclear. We have participated in extended conversations both at Council meetings and with individual Council members and shown a willingness to respond to all questions and address concerns. Unfortunately, this effort has not been sufficient to secure Council support,” according to the letter.

Common Council President Tom DiPietro and several other council members had complained that Galvan was not being transparent about the project.

Council members, including Alderman Dominic Merante, had also questioned why Galvan did not rehab properties it already owned into affordable rentals. Galvan and its subsidies own about 80 properties in the city, many of which lie empty.

Alderwoman Tiffany Garriga reacted angrily to the proposal’s collapse during Tuesday night’s Common Council meeting, saying she was “disgusted and disappointed” with the other Common Council members. She demanded an alternate plan from members who voiced opposition to the project.

“No one actually came up with a plan,” Garriga said in an interview Tuesday night. “It was just – ‘oh, let’s find a better deal for the city.’ What about the better deal for your constituents? What about a better deal for people that’s homeless? What about a better deal for minority business owners who can’t afford to have a storefront?” She asked.

The PILOT had undergone several significant changes since it was first concocted early this year, including switching out studio apartments for three-bedroom apartments and committing to housing local residents.

The PILOT was voted down by the Common Council June 21, after which more changes were made, such as increasing the annual PILOT payments by 25 percent; committing to a preference for minority-owned businesses in the developments’ commercial ground floor; and decreasing the length of the PILOT from 40 years to 30 years. Galvan also committed to entering a new PILOT after 30 years to assuage fears the property could be filed as a non-profit, which would allow Galvan to avoid all property taxes on the development.

However, Galvan pulled the new proposal before the council could vote on it, saying the council’s requirements for the PILOT were in constant flux.

“We cannot continue to risk precious Foundation resources on this initiative until the City provides clear guidelines on the standards and requirements for supporting affordable housing,” according to Kent’s letter to the Common Council.

Common Council President Tom DePietro read a prepared statement at Tuesday’s Common Council meeting, pointing out most of the council members were on record recognizing the need for affordable housing. He announced the council had approved rehabbing 25 apartments in the city’s public housing project as proof their heart was in the right place.

“Despite widespread support for affordable housing, we were not getting the basic information we needed to make a reasoned decision…the Galvan Foundation fed us information piecemeal, and only when it was requested, and never provided us with a cohesive, complete presentation of the finances and design of the project,” he said. “This lack of transparency is troubling to say the least.”

He said Galvan was “not the ideal candidate” for the project, questioning the past of Eric Galloway, one of Galvan’s principals, as a developer in New York City. He also said it was hard to be convinced of the fairness of the PILOT when Galloway never directly addressed the Council.

Towards the end of Tuesday’s Council meeting, Alderman John Rosenthal pointed out it was Galvan who ultimately withdrew the proposal, saying the council had been willing to continue negotiating.

The proposed development would have been rented out to lower- and mid-income Hudson residents, and rents would have been decided as a percentage of the renter’s income. The most inexpensive one-bedroom apartments would have been rented out for $500/month, a steal in a city where one-bedrooms often cost double this.

Though both Galvan and Common Council members said they were open to working with each other on affordable housing in the future, the current proposal is dead, and the 77 units will not be built.

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