The Judge Report - Chalmers- Just one more thing

About Chalmers- Just one more thing

Previous Entry Chalmers- Just one more thing Jul. 7th, 2009 @ 09:12 am Next Entry
If we accept Mayor Thane's figures on future tax revenues for the Chalmer's project of $890,000 per year for the city, based on current tax rates, and extrapolate those figures to include County and School taxes, the annual real property tax burden on the owner would be approximately $3.8 million dollars.

Based on the 180 units of various sizes (which would be the maximum number under the sketchy proposals thus far submitted), that amounts to an annual tax burden in excess of TWENTY ONE THOUSAND DOLLARS PER UNIT.

The MAXIMUM rental proposed for the largest unit (and contrary to what the Market Study says the market will bear) is $1,800 per month. Multiply that by twelve months and you come to . . .
TWENTY-ONE THOUSAND SIX HUNDRED DOLLARS.

Balance this all out with the fact that the majority of the units would bring in  less than the maximum and the one and only conclusion to be drawn is that THE ANNUAL TAXES EXCEED THE PROPERTY INCOME!

Never mind the  expenses of operation, debt repayment, depreciation and repair and political contributions.

Do the math.

Mayor Thane clearly has absolutely no idea what she's talking about, and we are making major, multi-million dollar decisions based on her complete fantasies.

[UPDATE] I've gotten several complaints from people who, recognizing the absurdity of these figures, maintain that I am mis-stating the Mayor's figures, that the $890,000 was meant to include City-County-School combined taxes.

Sorry, but I am relying here on Mayor Thane's own words. She was specifically asked on the Sam and Mike show last week whether the $890,000 figure was just the city's share or the the combined total. She responded quite clearly that it was her understanding that it represented only the city's share.

And if she's wrong, isn't it important for we, as citizens, to know that our mayor is selling this project to us on the basis of figures that are, even if fully realized, less than 25% of what she's been telling us and by her own words believes?

My sources in City Hall tell me the Mayor is scrambling to come out with revised figures (and, no doubt, a revised mantra, to use her term). Let me save her the trouble (5th graders and advanced 4th graders follow along):

Annual taxes, twenty years from now, $890,000

Number of apartments, 180.

Average annual rental per apartment based on average of $1400/month, $16,800.

Annual tax divided by number of apartments= $4,9444.44.

But remember, I was being kind and using the estimated rentals Kaufman used to sell the project, and not the figures that his marketing study showed, which, as I recall, projected monthly average rentals of $750, making the annual income per unit of only $9,000.

The Mayor also estimates annual water and sewer fees of $102,000 ( I guess they're collecting their own garbage), for an additional per unit cost of $566.67, which added to the average real property tax per unit of $4,944.44 brings a total per unit annual tax of $5,511.10. Divide that by the total annual income per unit of $9,000 and you have an annual tax and fee payment of 61.23% of income! That's better than the greater than 100% of my initial calculations giving everyone the benefit of a perfect project, but still ridiculous.

And if, by chance, Kaufman gets his pie-in-the-sky rentals, and there are no vacancies, you are still dealing with $5511.10 divided by $16,800=  32.8%.

Again, figures so absurd that they could not be sustained. Obviously, the assessment would have to be far, far lower than the Mayor's estimate for the project to be economically viable at the point in the far distant future when they actually start to pay taxes. Obviously, if you are paying even 32.8% of your income from the property in real property taxes BEFORE figuring in mortgage amortization, upkeep, vacancy rates, depreciation, insurance, office overhead, etc., IT DOESN'T WORK.

I stand by what I have said. Anyway you look at this, it is plainly obvious that Mayor Thane has absolutely no idea what she's talking about.

[FURTHER UPDATE] Boy, am I being a piker. According to flippin amsterdam, unofficial spokesman for the Thane regime, this proposed assessment is based on 80 units, not 180. Therefore, let us get out the old calculator again.

$890,000 divided by 80 units equals ELEVEN THOUSAND ONE HUNDRED TWENTY FIVE DOLLARS TAX PER YEAR PER UNIT. Plus $566.67 in water and sewer equals EVEN THOUSAND SIX HUNDRED NINETY-ONE DOLLARS AND SIXTY-SEVEN CENTS.

Divided by estimated income of $16,800 based on Kaufman's highest  estimates and you get 69.59 percent of income going to real property taxes. Based on his own market study estimate of $9,000 per year you get ONE HUNDRED THIRTY PERCENT OF INCOME GOING FOR REAL PROPERTY TAXES and fees.

So lets split the difference and call it $12,900 income per year per unit. Comes to then only 90.6 per cent of annual income. Before accounting for vacancies.

If that's the best they can do, and that seems to be their best, wow.





Site Meter
View Robert Going's profile on FiledBy
Buy my murder mystery The Evil Has Landed
 
and don't forget The Judge Report (THE BOOK) is now available, too!
Tags: ,
Leave a comment
From:(Anonymous)
Date: July 7th, 2009 02:06 pm (UTC)
(Link)
I believe the Mayor's 890,000 property tax projections include the city, county, and school taxes. I saw a document she sent out that used a $57 per thousand mil rate- that would imply all 3 taxes. This is what is skewing much of your calculations.

~W. Murphy
[User Picture Icon]
From:[info]rgoing
Date: July 7th, 2009 06:44 pm (UTC)
(Link)
You may believe that, and it may even be a "fact", yet the mayor herself was on Sam and Mike last week and was asked that very question and she said point blank that i was her understanding that the $890,000 figure was strictly city tax. Now, if she doesn't even really know the answer to that question, how much confidence should anyone have in her judgment on this issue? In other words, in her mind the city will be getting $890,000 so everyone should support the project. At what point does she begin to question the project? When it gets to $300,000? When it gets to zero? Shouldn't she have these answers BEFORE she begins promoting it? Shouldn't she be embarrassed that that anyone with fifth grade arithmetic mastery could plainly see her figures make NO SENSE?
From:(Anonymous)
Date: July 7th, 2009 09:24 pm (UTC)
(Link)
I have lost all faith in this administrations. No one seems to know what the heck is going on. The mayor seems to be spewing around facts and figures that are not at all accurate, as to promote her own agenda. The Corp Counsel seems to spewing out any thing the mayor tells him to and tries to convince the city and maybe even himself that it is an objective legal opinion. (when we all know it is really Ms. Thane's opinion.)
It seems the mayor has convinced corp counsel that it is not his job to look out for the best interests of the city and its taxpayers but rather to look out for her own personal agendas and Uri Kaufmanns pocket.
It seems they both the mayor and corp counsel have misled the public, the media and the taxpayers of this city on more than one occasion. I find this to be an outrage!
[User Picture Icon]
From:[info]rgoing
Date: July 7th, 2009 09:28 pm (UTC)
(Link)
Yes, it is.
From:(Anonymous)
Date: July 7th, 2009 09:48 pm (UTC)
(Link)
Does our city have any recourse?
[User Picture Icon]
From:[info]rgoing
Date: July 7th, 2009 11:26 pm (UTC)
(Link)
Of course.
From:(Anonymous)
Date: July 7th, 2009 04:19 pm (UTC)
(Link)
Your figures are wrong. You're getting to $3.8 million by taking the estimated actual taxes to be paid to the city ($890,000) and THEN you're applying the valuation rate, then adding in the school and county. If the ACTUAL amount to be paid the city is $890,000 you shouldn't be applying the valuation rate to get to a higher number. Either the valuation rate is already included or they're assuming there will be a reval before the project is completed. Which makes sense since we're overdue.



[User Picture Icon]
From:[info]rgoing
Date: July 7th, 2009 06:51 pm (UTC)
(Link)
Well, I see the obfuscation patrol is back.

This has nothing to do with equalization rates. Take out your tax bills, if you live in the city. Ignoring the fees for the moment, you are paying x dollars per thousand on your city bill, x+y on your county bill and x+z on your school bill (meaning that both the county and school tax rates are higher than the city rates). As they relate to each other, if your city tax bill is $890,000, the combined city-county-school would be $3.8 million.

You show me your math.
From:(Anonymous)
Date: July 8th, 2009 02:36 pm (UTC)
(Link)
Actually, I was using your math from a previous post. I stand by me critic of your method:

"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."
[User Picture Icon]
From:[info]rgoing
Date: July 8th, 2009 05:09 pm (UTC)
(Link)
Well, I guess I don't understand your critique then, so please explain.

My original calculations were based entirely on what the Mayor said, namely that the CITY would be receiving $890,000 a year in property taxes.

From that you can extrapolate the two things I mentioned, first that the total real property tax on the building would be $3.8 million (the city rate amounts to about 23% of the total rp tax burden; it fluctuates a little bit from year to year depending on what the other entities do, but it's close enough for our purposes. I was using last year's levy and so it doesn't reflect the big school tax increase).

The second thing you can extrapolate is the assessed value necessary to raise $890,000. The current city tax rate (I'm away from my notes as I write this) is i believe somewhere between 13 and 14 dollars a thousand. Therefore the assessed value necessary to raise $890,000 would have to be approximately 64 million.

And here is the one and only place you would use the equalization rate, to find out what the assessor believes is the true market value of the building, as I said, about $102,000,000.

I don't see a flaw in my calculations or method and I've done them over and over.

OBVIOUSLY there is something wrong, because the figures are absurd. That is my point. These are the figures the mayor said she believed (if you carry them to their mathematical conclusions) and those figures are nuts. If we are to be having policy discussions on what's good for us and what's bad for us, let's have them on reality, not fantasy.
[User Picture Icon]
From:[info]rgoing
Date: July 8th, 2009 05:13 pm (UTC)
(Link)
Re-reading your post, I think I see the problem, and that is in my in-artful use of the antecedent for "that". I was not using the full value to arrive at the combined rate, I was using the assessed value. My apologies for the confusion. My figures are right, but my explanation at that point was muddled. Mea culpa.
From:(Anonymous)
Date: July 7th, 2009 04:27 pm (UTC)

Chalmers

 (Link)
Great job Bob !!!!

Keep up the good work.


Mike Mancini
From:(Anonymous)
Date: July 7th, 2009 06:28 pm (UTC)
(Link)
If she applied the same math to her own taxes, Mayor Thane would be snapped up by Obama to work in Treasury. I mean, $21,000 per year in property tax is even more than the typical New Jerseyan pays.

-nf
[User Picture Icon]
From:[info]rgoing
Date: July 7th, 2009 06:53 pm (UTC)
(Link)
These are APARTMENTS in a city where a mansion can be bought with a monthly mortgage payment of $1,800.

Yeah, i can see how Treasury could use her.
From:(Anonymous)
Date: July 8th, 2009 09:20 am (UTC)
(Link)
Last nights decision to table the resolution to terminate the contract for Chalmers was an extremely disappointing one. To put it plainly...they caved!
[User Picture Icon]
From:[info]rgoing
Date: July 8th, 2009 10:23 am (UTC)
(Link)
That's a fair evaluation, I think. Unlikely we'll find the events of last night in the next edition of Profiles in Courage.
From:(Anonymous)
Date: July 8th, 2009 09:28 pm (UTC)

Theater at its worst!

 (Link)
Watching the Common Council meeting last night was the biggest farce I have ever seen! The Mayor, her plants and her theatrics are absurd! She is an embarrassment to this City as well as to herself! I would like to see someone come to this city who has their own money to invest and not our tax dollars. They are all moochers!!!
[User Picture Icon]
From:[info]rgoing
Date: July 9th, 2009 02:18 am (UTC)

Re: Theater at its worst!

 (Link)
Yes. I haven't even gotten into the true absurdity of using millions in taxpayers dollars to subsidize luxury housing while our own people are scrambling to keep their homes due to confiscatory taxation.

The executive session was entirely improper. The email from Kaufman is a public record and should have been read aloud by the clerk in open session.

But they'll get away with it.

One of the speakers who gushed about Amsterdam's future is married to a guy who recently pulled his business out of Amsterdam.
From:(Anonymous)
Date: July 9th, 2009 02:43 pm (UTC)

Re: Theater at its worst!

 (Link)
Why are they allowed to get away with improperly running the city council meeting? (ie. email/exec sesssion) Please advise as to what steps the people of this city can take to prevent this from happening again.

pro bono please ... :)
[User Picture Icon]
From:[info]rgoing
Date: July 9th, 2009 03:39 pm (UTC)

Re: Theater at its worst!

 (Link)
Ordinarily the local press would take them to court over this. It may yet happen, as the Recorder lodged a protest, I understand. A citizen can also do this, but I've filled my quota of pro bono for this year. :)
From:(Anonymous)
Date: July 9th, 2009 04:28 pm (UTC)

Re: Theater at its worst!

 (Link)
I hope that the media does look out for the taxpayers rights and their own rights as the media and take them to court over this, enough is enough. I also hope there are no work camps in Amsterdam for them to be sent to after doing so.

(By the way, I would never ask you take this to task, just wondering what our options are. Besides, you have a VERY IMPORTANT campaign to work on!!!!)
From:(Anonymous)
Date: July 9th, 2009 01:44 pm (UTC)

We can't trust the Council!

 (Link)
If we South Siders had known that that Roth and Isabel were going to fold, we could have planned and also presented our reasons to the Council for not wanting Mr. Kaufman's "luxury apartments". They clearly let us down! We all thought it was cut and dry; they disappointed us and now we know we cannot trust anyone! Bravo to Mr. Leggiero and Mr. Wills! How anyone could vote in favor of Mr. Kaufman after listening to Mr. Wills is beyond me! Roth, Isabel and Brumley are not working in the best interests of the city's residents. It will be years before anything is done and in the meantime, the City continues to languish! What a shame! This city is surely turning into a slum! No road work, no street cleaner, and now we will have to endure looking at the Chalmer's building for who knows how long. All of the previous plans have been set aside for a developer from Long Island and Mayor Thane's ego! How sad! Oh yes! Gilliland Avenue remains closed pursuant to the crumbling of the "beautiful" Chalmer's building and impacting a successful business on the South Side! How much more should we have to endure? Mr. Isabel and Mr. Roth, do the right thing! This issue has wasted enough of the efforts of everyone! Let's get on with the business of the City! DO SOMETHING POSITIVE....STOP THE POLITICS! Mayor Thane, do your job, work for the citizens of Amsterdam and if you can't or won't....resign! You can go to work promoting Mr. Kaufman somewhere else.
From:(Anonymous)
Date: July 10th, 2009 11:48 pm (UTC)

Re: We can't trust the Council!

 (Link)
What most people do not know is that during the sessions prior to the council meeting, Corp Counsel called Roth to his office for a private meeting. Then Brumley was called for her private session. With her it makes no difference as she has supported all things the mayor wants. I think there is a lot more going on than meets the eye. Like maybe the garage problem??????? After all, Gerry is personal attorney for Brumley, did someone say conflict of interest????

[User Picture Icon]
From:[info]rgoing
Date: July 10th, 2009 11:51 pm (UTC)

Re: We can't trust the Council!

 (Link)
I have never heard from a reliable source that Mr. DeCusatis has ever been Mrs. Brumley's personal attorney, and do not credit it as anything more than gossip.
From:(Anonymous)
Date: July 11th, 2009 01:25 am (UTC)

Re: We can't trust the Council!

 (Link)
By GD's actions one would think that he was retained by Ann Thane...and not employed by the City of Amsterdam.
(Leave a comment)

Advertisement
Top of Page Powered by LiveJournal.com