Galvan increases PILOT offer to 20%

Galvan Foundation has proposed a mixed-use structure, seen here, for 75 North 7th St. The five-story building would include 77 residential units above 4,000 square feet of commercial space. Contributed photo

HUDSON — The Galvan Foundation is sweetening the deal as it seeks Common Council approval to build a mixed-income housing complex at 75 North 7th St.

The developer increased its annual payment in lieu of taxes, or PILOT, offer to the city by 20% and committed to covering any increases in construction costs, Galvan Vice President Dan Kent said Tuesday.

The Hudson-Catskill Housing Coalition is organizing a phone banking campaign to mobilize support for the PILOT among registered voters in Hudson’s 4th and 5th wards Saturday.

Callers will target registered voters in the wards represented by aldermen who opposed the agreement at the council’s July meeting.

“If the voters then reach out to their representatives, we have done our part,” Hudson-Catskill Housing Coalition Senior Advisor Quintin Cross said Tuesday.

Under the new PILOT proposal, Galvan would pay $100,000 in the first year in exchange for a partial tax exemption. The developer’s annual payment would increase by 2% annually, reaching $177,000 by the end of the agreement in 2050.

Just over half of the annual payment would go toward school taxes, with the remainder split between city and county taxes. That means the project would contribute approximately $29,000 to the city’s tax rolls in the first year of the PILOT, Treasurer Heather Campbell said.

The altered PILOT agreement will be subject to approval at the council’s Aug. 18 meeting.

Galvan has shown its willingness to meet council members halfway in negotiations, Kent said, calling the new proposal “one of the most generous you will find in the Hudson Valley.”

“We have taken big steps to show council members that we take their concerns about the city’s tax base seriously, while ensuring this critical affordable housing initiative is still financially viable,” he said.

In addition to increasing the PILOT amount, Galvan also committed to “covering any increases in construction costs to ensure design and construction quality are achieved,” Kent said.

The proposed five-story housing complex, with 77 mixed-income apartment units and 4,000 square feet of commercial space, is estimated to cost $22 million.

Galvan is contributing the land, which it owns, and has said it will finance the remainder with funding from the state affordable housing authority and private backers. The project received a $1 million Buildings of Excellence award from the state Energy Research and Development Authority in November.

Galvan is confident that its cost projections are correct, Kent said.

But in the event that construction costs are higher than the estimated $22 million, the developer is committed to covering the difference with its own resources, he said.

That could mean forgoing the $1.3 million developer’s fee if necessary, Kent said.

The developer’s fee is a deferred payment that would accrue to Galvan over 15 years if the project is profitable. The $1.3 million would be collected from the building’s net operating income and is intended to compensate Galvan for the work of its staff and consultants, Kent said.

The developer’s newly articulated commitment to meeting any increased construction costs is a direct response to concerns voiced by 4th Ward Alderman John S. Rosenthal, who voted against the PILOT’s previous version at the July 21 meeting.

Rosenthal called Galvan’s quality pledge “a great commitment” on Tuesday but stopped short of saying whether the developer’s proposed changes were enough to earn his support. Rosenthal said he would review any proposed PILOT alterations before the August meeting.

Kent sought to allay Rosenthal’s concerns during the council’s July meeting by pointing to building standards set by Homes and Community Renewal, the state’s affordable housing agency.

“It is not an option for Galvan or anyone else who receives state funding to construct a building that does not meet their very strict standards for quality and durability,” Kent said.

But Rosenthal said he feared Galvan would only do the bare minimum to fall within the state’s range of acceptable construction costs.

“It seems like there is wiggle room in the state oversight,” he said in response to Kent. “This is not about trying to say we don’t need the project. I am just skeptical of the ability to build it that cheaply.”

The Hudson-Catskill Housing Coalition launched its campaign to build support for the project in the 4th ward after Rosenthal and Alderman Malachi Walker both voted against the PILOT.

The phone banking efforts expanded Wednesday to include the 5th Ward after a large number of people responded to the Coalition’s call for volunteers. In addition to Rosenthal and Walker, callers will also be targeting registered voters represented by Alderwoman Eileen Halloran and Alderman Dominic Merante.

The campaign is about raising awareness and engaging new voices to speak out against displacement and rising housing costs, Cross said.

“We don’t believe that if you can’t afford housing you should just move,” he said. “We have already lost a lot of people in the city.”

Walker did not directly address the phone banking campaign but called for “more unity and faith.”

“I do feel that the Galvin Foundation has shown some real changes in their agency and that they are passionate about the livelihood of our city,” Walker said. “I stand on the statement that if it doesn’t fully benefit our city, why should we settle.”

Rosenthal said he welcomes the community engagement.

“I want people to know that my support remains solid for affordable housing, but it is my duty to do a proper job vetting all proposals,” he said. “There is not a one-shoe-fits-all answer for affordable housing.”

Merante said he would be glad to share his perspective on the project with constituents.

“I am not against affordable housing, but I want more time for this project to be done,” Merante said.

Halloran called for the Coalition members to present data on the need for affordable housing in addition to their phone banking efforts.

“I think advocacy is a fine tradition, but do it with data and facts,” Halloran said.

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Johnson Newspapers 7.1

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