Binghamton’s school board voted unanimously against a proposed tax break for a development company Tuesday night.
UB Family LLC wants to build a 120-unit apartment complex at the site of the former Water St. parking garage downtown. The complex, called the Apex at Water St. would be built on top of a new, five-level parking garage.
Under the proposed agreement, the Troy-based developer would get a payment-in-lieu-of-taxes or PILOT, worth $11.5 million over the next 28 years. The proposal has stirred up controversy among housing advocates, residents, and elected officials.
Tensions run high during school board public comment period
The Binghamton City Council voted 4-2 in favor of the PILOT. But the proposed tax break also needed approval from the school board and county legislature.
More than 30 residents spoke against the tax break during a lengthy and sometimes emotional public comment period. Under the agreement, Binghamton City School District would receive $545 in yearly taxes from the company for the first decade of the agreement.
“They're asking you to vote yes to allowing them to forego tens of thousands of dollars in taxes that could be helping the children in this community,” Broome County resident Marcia Gates said. “While simultaneously not addressing any of the needs of this community.”
Apartments at the Apex on Water St. would be almost entirely market-rate, with six units meant for affordable, workforce-focused housing, such as for local nurses, doctors, or law enforcement.
Many residents argued that with rising housing insecurity in the community, some or all of the apartment units should be reserved for affordable housing.
“I know a lot of people who work downtown, and none of them can afford [market-rate units], none of them. The poverty line in itself, bi-weekly, is like $1,300,” said Binghamton resident Jessica Steele. “You're asking for people to give more than half their money toward rent.”
All seven members of the school board voted against the proposed tax break.
Division along party lines
Binghamton City Council voted along party lines, 4 to 2, in favor of the proposal earlier this month, despite pushback from Democrats on the council.
“This is a project that caters to theoretical new residents that may come in the future,” Council Member Aviva Friedman said. “And it does nothing to address the needs of the current residents of this district.”
The developer has said construction costs have increased and that without the tax break, it would have to raise rents past market prices. The cost of the project is estimated to be around $22 million for the parking garage build, and an additional $37 million for the housing complex.
“There's going to be a narrative that either Democrats or housing advocates are against new development. And that's really not the case,” said Nate Hotchkiss, a Democratic candidate for city council. “If that was all private money, I don't think many people would have a problem with it. Because the fact of the matter is, we're subsidizing it.”
Proponents of the project argue it would bring in over $8 million for the city in revenue and infrastructure improvements.
Binghamton Mayor Jared Kraham said as it is, the parking garage isn’t bringing in any tax revenue. He said either way, the city would have to pay to rebuild the parking garage. The Water St. Parking Garage was built in 1970, and the city demolished it in 2021, citing disrepair.
"Instead of just having a garage, which is going to cost the city taxpayers a lot of money in debt service, the additional maintenance costs, the fact that it's generating $0 in tax revenue like the previous garage did, this project now brings in $4.5 million in revenue for the city, the school district and the county," Kraham said.
Usually, Kraham said, the development agencies of cities and municipalities are the ones to decide on PILOT agreements. But in this case, the proposal needed the approval of the school board and the county legislature.
“When you're going through a new process, for the first time, with a group that does not typically deal with matters of economic development, community development, tax abatements,” Kraham said. “I guess, it's not necessarily surprising that the first crack at this was unsuccessful.”
Kraham said the county legislature will no longer be voting on the tax agreement. He said the city would regroup and renegotiate with the developer, as well as the city’s developmental agency and attorneys.