Newburgh approves tax breaks for redevelopment project

March 27-- Mar. 27--CITY OF NEWBURGH -- The Newburgh City Council agreed to give tax breaks for the next 17 years to a housing and community redevelopment project by RUPCO that continues the group's work transforming the city's East End.

The council unanimously voted Monday night to approve a payment in lieu of taxes, or PILOT, agreement with RUPCO's Housing Development Fund Company for the second phase of a revitalization project looking to transform about 20 aged buildings into apartment rentals and community space.

The first phase of the greater project was the creation of East End Apartments that offers 44 affordable, one-, two- and three-bedroom rental units in 15 renovated buildings between Lander, DuBois and First streets.

Current discussions are focused on Newburgh Progress, which calls for the conversion of the former First United Methodist Church at 245 Liberty St. into job training and event-rental space, and creates 61 apartment rentals between Broadway, Grand, South and DuBois streets. Plans also call for a building at 257 Liberty St. to be updated and turned into a day-care center.

The PILOT agreement is critical to RUPCO's bid for more funding through the state Homes and Community Renewal program. If its application to the state is successful, work could begin as soon as January. Project leaders estimate construction to take two years.

PILOT payments on residential properties will be $35,000 for the first two years, coinciding with construction. During the project's third year, residential property payments will jump to $73,200 and increase 2 percent annually, according to City Council documents. The PILOT for the church and proposed day-care buildings calls for payments of $15,000 per year during construction. After the buildings receive certificates of occupancy, payments will rise $15,000 a year and increase 2 percent annually.

Newburgh Progress also aims to help renters transition into homeowners. RUPCO representatives told the City Council that renters could buy their homes after 15 years and the organization will help educate renters on financial planning and management.

RUPCO estimates the project would offer 217 temporary jobs during the two-year construction phase and 12 permanent jobs.

RUPCO proposed a 30-year PILOT during an earlier presentation to the City Council, but council members wanted a shorter agreement. City Attorney Michelle Kelson said one of the advantages of a shorter agreement is that the council and developers can revisit and adjust the tax plan sooner, if needed.

lbellamy@th-record.com

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