Why Esplanade would Benefit Mechanicville
By William J. McNeary IV
Tom, the entire citizenry is completely misled on this. They are confused by the fact that the project funding utilizes federal tax credits, but that does not mean the tenants get subsidies to pay for their rent. All it means is that the developer can sell the tax credits to investors (typically banks) to raise the capital needed to build the project, and because that money is equity and not debt, the developer can build a very high quality project but still set rents at levels "affordable" to regular working people; that is why it is called "Affordable Housing" and not "Low Income Housing". For some reason, people believe the residents in this complex will all be on public assistance. That is simply not true. There are a small number of units that offer a rent break to veterans and victims of domestic violence, but even those units require a certain minimum income level. The follow shows the proposed rents and required income levels. In order to rent a one bedroom apartment, the tenant must make a minimum of approximately $15.00 an hour which is 67% above the current minimum wage. It is clear that this complex is designed for "working people."
NRP has a budget of $55 million for the project which equates to $240,000 per apartment unit. That amount is significantly higher than the average home value in Mechanicville today. $55 million is the same budget I had for the Esplanade. Take a look at these projects NRP built around the country using low income housing tax credits and you decide if this project is bad for Mechanicville. Also, here is a link explaining how tax credit funding works. It uses Virginia in the example, but the same holds true for NY.
This project is exactly what Mechanicville needs. Here are a few reasons why:
- It's a $55M investment which increases the tax base of the city by 40%, which in turn increases the allocation of county sales tax revenue. I don't have the exact figure but I am told it results in an increase of somewhere between $100k and $200k annually for the city.
- It provides an additional $50k per year in water sales which will help to offset the impending loss of $100k in water sales to Stillwater. Sewer revenues are around $25k annually.
- The developer is contributing $50k to local pedestrian improvements.
- It will bring in hundreds of new residents to the city that have household incomes between $30,000 and $75,000. Based on the income requirements to live there, that will yield somewhere around $11 million in new disposable income to be spread around the city's merchants and help spark new investment to fill empty storefronts. By opposing this project, the residents of Mechanicville are basically saying that they themselves are not good enough to live in Mechanicville because these income levels reflect the majority of the current citizenry. The 2010 census puts the median Mechanicville household income at $43,355.
- Property taxes. The developer has indicated he will greatly reduce the ask from the IDA so that the project has an immediate positive impact on the city and school budgets. This project will result in millions of new tax dollars and stem the tide the city has had of having to raise taxes to keep up with rising costs with no new sources of revenue.
- Because of the source of funding (tax credits), NRP has to follow strict rules for renting only to qualified people and they get audited every year by NYS. This ensures that the facilities are properly maintained and those that live there comply with the income requirements. Other multifamily property owners have no such continuous oversight.
This project is to Mechanicville what Globalfoundries was to Malta. How often does a single project come along that can increase the value of an entire city by nearly half? If the city council rejects this project it will be the greatest mistake in the history of Mechanicville and it will be done so based upon false narratives, innuendo and uninformed Facebook chatter. The only significant difference between this project and my previous Esplanade project is that this one has funding available and can be under construction by April if the council simply says yes. Despite all past diligence and effort, the previous versions of the Esplanade eventually proved not to be financially feasible using conventional financing and as a result will never get built. The reality of life is this, in order to obtain the funding necessary to construct such a large, high quality project in a small city like Mechanicville, non-conventional financing sources have to be used. The people need to stop confusing “Affordable Housing” with “Low Income Subsidized Housing.” They are two completely different things. Don’t rely on me or John Enzien. Do your own research and look at the websites provided. Read the reviews from the tenants. NRP is very good at what they do and all of their projects are first class.
One last point. I cannot figure out why John Enzien and the board of the Mechanicville Housing Authority can possibly be opposed to this project. If you go on their website, at the bottom of the home page, their mission statement reads:
To promote adequate and affordable housing, economic opportunity and a suitable living environment free from discrimination.”
To quote your article:
“John Enzien, Director of the Mechanicville Housing Authority, says that Mechanicville already has a sufficient supply of publicly assisted housing units for low-income households and individuals. For the past 34 years, the Mechanicville Housing Authority Board of Commissioners has maintained the position that there is no further need for additional publicly assisted housing units in the City of Mechanicville. . . . . “There is no further need for low-income housing units in the City of Mechanicville.”
His mission is to promote Affordable Housing. This project embodies affordable housing. It is by definition, affordable housing. Mr. Enzien’s job is to promote affordable housing and yet he continues to paint this project as low income, publicly assisted housing. Either he simply does not understand his own industry, or perhaps there are other interests at stake here which are fueling his campaign to kill this project. Either way, by following his erroneous depiction of this project, and the sentiments of a misinformed Facebook group, the city council is about to make a terrible mistake; however, it is not too late. If people will simply take the time to listen and learn, we can make this project a reality for the betterment of all.
I have attached a pdf file of the proposed buildings and clips from the NRP project in Raleigh NC that most closely reflects what is intended to be built in Mechanicville. Also note that NRP will soon be proposing the exact same buildings in Saratoga Springs.