The owners of the John Wesley Village III senior apartment complex are seeking Riverhead Industrial Development tax breaks to rehabilitate 92 affordable apartments that were built in 2003.
But a frequent critic of the IDA says the proposal doesn’t create any new permanent jobs, which is one of the criteria for IDA assistance, and doesn’t propose any new structures. He questioned why it’s even being considered for IDA assistance.
John Wesley III’s 92 senior citizen rental units occupy 16 acres north of Middle Road. The complex provides rentals for seniors earning 60 percent of the area median income or less. The IDA held a public hearing on the request Monday.
Three senior projects in this area bear the “John Wesley Village” name — and each has a different owner. John Wesley Village III is the northernmost complex.
John Wesley Village III, LP, which owns the complex, is planning renovations and improvements to the tune of $1.4 million. These include redoing roads and sidewalks, replacing hot water heaters and heating equipment with energy-efficient units, installing new call-for-aid systems in each apartment and replacing heating, ventilation and air conditioning systems in the community center.
Another benefit of the improvement, the applicant said, is that the property superintendent would be able to live on site, which is not the case now.
There are two full-time employees on the site and the renovations won’t increase that number, but will provide 12 “indirect jobs” during the construction, according to the application, which also indicated that no additional buildings are proposed.
The applicants are seeking the standard IDA incentive package, which includes an abatement from sales and use taxes on building materials; an abatement of county mortgage recording tax; and a partial abatement of real property taxes on the improvements.
As far as the property tax abatement, the company is seeking to make a 10-year payment in lieu of taxes equal to about $120,000 per year, according to Russell Mohr of JWV III. It would start at 50 percent of the property tax amount and would add an additional 5 percent back each year over the 10-year period, after which it would pay full property taxes.
The abatement would not apply to land value and applies only to town, county, school and fire district taxes.
According to town records, JWV III paid a total of $246,077 in property taxes for 2016-17.
“We are seeking to enhance and provide additional benefits to our senior citizens in our project,” attorney Eric Russo said. “But for benefits this board would be granting, we would not be able to make the necessary improvements for the project.”
Meredith Black, in-house counsel for the Benjamin Company, the parent company of John Wesley Village III, said they were encouraged by their bank to seek IDA incentives, which would result in a lower interest rate on loans for the upgrades, and allow the loan amount to be increased.
The residents of John Wesley Village III now have an average age of 73, Mr. Russo said. Most of them, he said, have lived in Riverhead their whole lives.
Larry Simms of South Jamesport, who has been critical of the IDA over the years, said he had filed a Freedom of Information Law request Jan. 22 seeking a breakdown of a $228,000 category in the application called “outstanding obligations.”
He said he got a response from the IDA Jan. 29 saying that “the estimated time for a response in whole or in part will be the end of March 2018.”
He said the board should postpone the hearing if it cannot provide information beforehand.
“I don’t challenge the necessity of this project,” Mr. Simms said. “What I don’t understand is how any of this is my responsibility, as a taxpayer, to subsidize this business.”
He said the building can’t go anywhere, no new jobs or construction are proposed and that the project is a “routine renovation” that the applicant is “dragging out until mid-2020.”
He added that JWV III was given a 10-year partial property tax abatement in 2004, which has since expired.
“It’s obscene that you would even let this come to a hearing and have to ask the taxpayers to support their for-profit enterprise,” Mr. Simms said.
Mr. Russo said they would get Mr. Simms the information he asked for.