The Judge Report - July 5th, 2009

No, not the one in today's Recorder. That one is spot on.

I'm speaking of the one in the Saturday Gazette, titled "Chalmers Mill demo would be dumb move in Amsterdam."

The editorial is based entirely on false or unsupported premises.

The aldermen, three Republicans and a Democrat, say that Kaufman hasn’t met various requirements from an option agreement signed in May 2008. That may be true, technically speaking, but legally may be another matter. For instance, the city’s corporation counsel says that Kaufman didn’t have to meet one of the requirements cited by the aldermen in their resolution to end the contract - to pay the city $50,000 to extend the one-year contract for another year - because the state’s environmental cleanup of the site had not been completed.

In any case, $50,000 is not a lot of money in the big scheme of things — the project would bring in more than a million a year in taxes and fees once completed, says Mayor Ann Thane. And the other requirements, like engineering studies and architectural plans, would likely have been met if Kaufman hadn’t run into financing problems because of the credit crunch.

First, there is no difference between the "technical" and "legal" requirements. That the city's attorney has chosen to take the side of the developer against the city doesn't replace the facts. Both outside counsel hired by the Common Council and the city's previous corporation counsel (me) are in agreement that Mr. DeCusatis's legal opinions in this matter are without merit. Kaufman has failed to perform even the easiest of the tasks he promised by specific deadlines, including failing to make application before the Zoning Board, Planning Commission and Waterfront Commission. In fact, he has no specific plans for the building. His own marketing study says the site can not support the rents he proposes to charge. And even that presumes he should only begin by developing the red brick building, leaving the crumbling concrete structure to . . . continue to crumble.

The editorial quotes Mayor Thane's estimate of annual tax flow at their incredible peril. First, there will be no taxation at all until title passes. As the City Attorney has done nothing to clear title to the parcel, though I left behind on his desk a plan to do so that would have taken three months (eighteen months ago), it would likely be a couple of years if everything fell into place immediately before the first tax bill might go out. That bill, and the bills for the next SEVEN YEARS would be based not on the property's developed value, but on its existing assessment as a derilict hulk.

Then in, oh, maybe ten years from now, if everything goes absolutely perfectly, they would begin paying 10% of the annual real property taxes, then gradually phasing that in until about twenty years from now they would pay full taxation of whatever the assessment is then, which would be based entirely on whether the "luxury apartments" are still viable.

But let's use a little basic math to figure out how Mayor Thane arrives at her $890,000 figure. I'm rounding this out, as I'm sure she did. Applying the City of Amsterdam's current tax rate, in order to raise $890,000 the assessed value of the Chalmers Mill would have to be . . .SIXTY FOUR MILLION DOLLARS.

But wait, there's more. Since the city is not currently at full value, we need to apply the equalization rate to arrive at a full value assessment of ONE HUNDRED TWO MILLION DOLLARS!

Add school and county taxes to that figure and the Kaufman enterprise would be facing a tax bill of $3.8 million dollars. Does he impress you as the type of guy who would allow an assessment like that to go unchallenged?

As a comparison, let's take a look at Kaufman's vaunted Harmony Mills project in Cohoes (and ignore all the other undeveloped projects he has left hanging all over the state). Harmony Mills has an assessed value of five million dollars and full value of eight million. A mere NINETY FOUR MILLION DOLLARS less than Mayor Thane's estimate for Chalmers.

Oh, and how much is his actual tax bill?

Zero.

That's right, title is held by one of their tax-exempt development agencies. Recall that Mayor Thane has a similar plan for the Via Ponte project, of which Chalmers could be a part.

So the working-class taxpayers of Cohoes are subsidizing luxury apartments and getting good feeling in return.

The Mayor of Cohoes is as enthusiastic about Uri Kaufman as Mayor Thane.

Of course, he received a one thousand dollar campaign contribution from the idealistic Mr. Kaufman.