NEW ROCHELLE, NY -- The New Rochelle City Council voted 5-2 to accept a Draft Environmental Impact Statement (DEIS) submitted by Forest City/Ratner at its February 12th meeting. The vote came after an extended discussion including 20 minutes on the topic of the impact on the New Rochelle public school system.
Below is an unofficial transcript of the discussion.
The next step in the process is for the City to make the DEIS available to the public and hold a public hearing. The DEIS still not available and no date has been set for a public hearing.
Forest City/Ratner has indicated that they expect to receive a 20-year tax abatement from the New Rochelle IDA. The IDA has previously indicate they would no longer grant tax abatements beyond 15 years. The confidence of Forest City/Ratner in getting a longer tax abatement may be well-founded. NRIDA is compromised of appointees of Mayor Noam Bramson, who has received thousands and thousand of dollars in campaign contributions from the Ratner family as well as companies that do business with Forest City.
Under the tax abatement, Forest City/Ratner would make a payment in lieu of taxes or "PILOT" which is typically a small fraction of the taxes that would be paid for a fully assessed property. A portion of the formula for the PILOT is the projected number of school age children living in the proposed development that will attend public schools and the projected per-pupil cost to educate each child in the public school system.
There are a number of interesting issues and questions that arise from this discussion, some of which stand in direct contradiction to a discussion of the Echo Bay project by the New Rochelle Board of Education which took place last August.
There is no justification for the notion that projections for the number of school age children that will attend public schools are now more accurate in the Forest City/Ratner DEIS than those used for the Avalon DEIS which relied on notoriously inaccurate projections or that the per-pupil cost is more accurate than in the past.
City Manager Chuck Strome says one difference is that the City met with school officials, something that was not done in the past but fails to mention that laws changed to require the City to meet with school officials but gave them no say in the numbers used to create the PILOT. He also failed to note that the New Rochelle Board of Education discussed this meeting in August 2012 in public session and were uniformly critical of the City's dealings with them.
Council Member Lou Trangucci noted that the DEIS states that the full school tax should be $929,000 but Forest City will only pay $364,000 or -565,000 a year for 20 years, Strome argues that the location for the project is currently generating zero dollars in school taxes without discussing the cost to the school district.
$364,000 divided by $17,500 is 20.6, so the PILOT will cover up to 21 students based on the $17,500 per pupil cost foisted upon the school district. Stipulating for a moment that the $17,500 figure is correct, the school district will be losing money for every student starting at the 21st student and increasing by $17,500 for each student above 21, and this will go on for 20 years.
Avalon sold Avalon 1 to Hartz Mountain. Combined the two buildings now pay a PILOT of $110,000 of which zero goes to the school district. The law changed since then so the school district will get their fair share of the PILOT money but a fair share of a laughably low number is still low.
Avalon projected 58 students for their project. The latest figure is that there are 146 students in the Avalon building. Using the $17,500 figure, the Avalon is costing the school district over $1mm a year.
If Echo Bay Development exceeds 22 by a similar scale, 2.5 times projected, there will be 56 students in Echo Bay. Using the $17,500 figure, the cost to the district will be $980,000 a year. If the district receives $364,000 a year under the PILOT, the district will be losing $616,000 a year, every year, for 20 years. On a straight line basis that amounts to $12,300,000.
[Maybe someone can explain NPV and run the numbers on that in the comments.]
Council Member Ivar Hyden asked Forest City/Ratner representative Abe Naperstak whether the number of students could float rather than be a fixed number.
Naperstak sought to discourage that sort of thinking by claiming that it would be determined by financing for the project, as if this was somehow out of Forest City's control. It is hard to imagine that a big company like Forest City cannot find a financial institution that would write them an option which paid Forest City $17,500 for every student above 21 students for 20 years. The City Council should press this point because the price of the option is a form of risk insurance. In other words, it is a pricing of the risk that Forest City and the City of New Rochelle and the New Rochelle IDA hope to pawn off on the school district.
Quite a few times, the figure of 22 students is thrown as a FACT when it is merely a project (and likely not a very good one).
Some other meeting is referred to several times during this discussion. What meeting? How is that other meeting not public business?
Who is the lawyer with Abe Naperstak?
Naperstak is asked about parking and says Forest City is using one one space per bedroom. A large percentage of the units in the proposal are studio apartments which do not have a bedroom. Are they counting all units or excluding studios because they do not have bedrooms?
Ivar Hyden asked whether Forest City could require, under a lease agreement that the lessee rent at least one parking space. A good follow up question might have been to ask whether Forest City has ever done a residential project where a parking space was part of the lease agreement? If they have done it elsewhere, why not here?
No one brings up the criminal cases related to Forest City/Ratner projects or who on Council is getting what from Forest City, the Ratner family, their vendors, friends, and so forth. Surely, this is relevant.
As is often the case at the meetings, Barry Fertel insults the Council. This time to say they have "no experience or knowledge how to quantify the number of kids in a building that is being built". Maybe not, but they all have the experience of what happened with Avalon and by now realize that developers are inclined to understate such projections just like they always want greater density, less parking and anything else that will reduce their costs or shift them to someone else. In either case, the idea once again appears to be that the City Council exists to defer to the administration, developers and pretty much anyone else put in front of it. In other words, a rubber stamp.
Fertel asked, and Strome responded, to a rather odd question that the "new formula" be used on Avalon instead of the "old formula" which all can agree was not accurate. What "new formula" are they talking about? The Rutgers scale is not a "formula". It is a simple table. You get projections by running a finger down the left column and then across the row that describes the project.
Ever wonder what a Rutgers Scale is?
There are a series of tables. One is used to project "All School Age Children" and another is used to project "All School Age Children Who Will Attend Public Schools", with the latter being a subset of the former, or, in other words a lower figure. Although the DEIS has yet to be made public (and we have requested a copy), presumably Forest City is using the lower figure of "All School Age Children Who Will Attend Public Schools" to arrive at 22 kids.
So why does Abe Naperstak then try to insinuate the 22 figure is high because some of the 22 might attend Catholic and private schools? Any such children are already accounted for in the "All School Age Children" projections.
It is not clear when the expiration date on these projections occur. Is it 22 kids on day one? After 5 years, 10 years? the PILOT period?
Forest City/Ratner is selling property in New Rochelle. Why?
Bramson claims that the Echo Bay project is "eagerly awaited by the vast majority of residents of New Rochelle" put provides no factual basis for this claim. He adds that "New Rochelle understands that value of a revitalized waterfront and eagerly wants to achieve it". Again, there is no basis for this claim. Further, "New Rochelle" might think differently about the Echo Bay project if they understood not just the "value" but the cost which now includes $25 million to move the City hard, unspecified dredging costs, toxic waste clean up at the Beechwood Avenue site and millions upon millions in school costs and possible tens of million if new school buildings are required.
Few New Rochelle residents would disagree that a park/apartment complex is preferable to the current City yard but there has to be some limit to the cost. The Mayor appears oblivious to the cost which current New Rochelle residents will have to pay to have a "waterfront park". The fact is that we already have three waterfront parks now and the biggest issue with them is the lack of activity in those parks. The nearest park is Five Island Park. Council should ask for a usage report on that park over the course of an entire year. If Five Island Park is nearby and lightly used then what sort of demand exists for yet another park nearby? No one seems to ask if the people of New Rochelle will really use such a park. A passive park where residents can stroll along the shore has minor appeal but less considering that during the winter it will be very cold and windy and even during the summer it will be a walk along a mudflat half the time.
Ivar Hyden asked if school officials could address City Council. This is an excellent idea. Shari Rackman asked if the Council can get information on the capacity of Trinity School. Another good idea. The Council does not have to ask the City Manager to invite anyone. The Council can do that itself and should make the invitation itself, through the Mayor, and on that list should be the principal of Trinity school, the Assistant Superintendent in charge of Trinity and Isaac Young, the PTA at Trinity and board member David Lacher, a long-time IDA member, to appear before Council to respond to questions and otherwise educate the Council on issues from their perspectives.
At one point, Bramson describes a scenario where the Echo Bay development already exists and is replaced by what is currently there now and asks Council to imagine how residents would react.
He then describes the City Yard locations as filled with "tons and tons of environmental contaminants and toxins".
Tons and tons? And what is being done with these "tons and tons of environmental contaminants and toxins"?
There have been crews down at the City Yard recently taking soil samples. Where are all of those studies?
It may not be the case that the vast majority of New Rochelle eagerly awaits the Forest City project but it may well be that all of the home owners, schools, restaurants, and other businesses in the immediate area would want to know whether the "tons and tons of environmental contaminants and toxins" have leached into the soil and contaminated their property.
Talk of the Sound wishes to express our gratitude to Laraine Karl who devoted a great deal of time to preparing the transcript below.
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Noam Bramson: And item number 7 which is related to item number 6, as we have been saying, is the acceptance of a draft environmental impact statement issuance of a notice of completion and direction of a public hearing on the same. And let me just restate something I said a little bit earlier so we are very clear about what his means procedurally. When we say that this is complete does not necessarily imply that the council is satisfied with and pleased with the project but rather that this draft environmental impact statement is responsive to the scoping document that was issued earlier that it addresses all the questions that the scoping document posed and therefore this is now suitable for issuance to the public and for public comment. So its essentially an invitation for the public to weigh in on this project and then based on that public comment and based on additional discussion this will eventually be transformed into a final environmental impact statement. So you need not find every component of the draft satisfactory in terms of what you want out of the project, maybe you do find it satisfactory but its not necessary for you reach that conclusion in order to deem it complete. So…
Kathleen Gill: It's, it's, I just want to add one thing we've also had that the city staff has reviewed this, we've had our consultants review it and I think that again you don't have to accept everything that's being presented here but we do think that what is, what they have provided is in compliance with the scope and that is the only hurdle you have to get through in order to open this up for public comment.
Chuck Strome: Right. It is not just what they presented there's been give and take with our consultants and the city staff on this on this prior to the presentations, again basically you are scheduling a public hearing and it is suitable for the public to comment on it.
Noam Bramson: Any questions about either the process or the content of the DEIS. Council Member Trangucci?
Lou Trangucci: Where do we start? In the draft you claim that you are going to use on your sale tax revenue. You had two charts, you had one for $350 per square foot and one for $500 a square foot. I thought you took the $350 a square foot but you actually took the average which is $425 and you're presenting in this draft that you are going to create $224,000 in sales tax revenue.
Abe Naperstak: Direct sales tax revenue.
Lou Trangucci: When…I feel that number is actually too high and I think that number should be more like $250 a square foot. So I just want to present that as something for the record. The other thing is we talked about the fact that in this draft your school tax will be based on the number of students coming out of the project, 22 kids, is that correct? And I think the number your multiplying by is $17,500. The thing I want to make sure too is and that people, the public knows that that number's going to be fixed for the term of the PILOT which is 20 years.
Abe Naperstak: [Shaking his head to indicate "No"]
Lou Trangucci: That is what we talked about the other day in the meeting
Abe Naperstak: Well taxes...
Lou Trangucci: Let’s put it this way…
Abe Naperstak: …there's inflation every year on the PILOT.
Lou Trangucci: Oh, well, that's fine. But if the number of students goes from 22 to 32 you not making the difference up over the 20 year PILOT. Is that correct?
Abe Naperstak: Correct, and if they go to 10 we do not get any of the benefit of that.
Lou Trangucci: Understood. OK they go the other way. More than likely it will go the other way, it will go up.
OTHER GUY FROM FOREST CITY: We wouldn't agree with that…[crosstalk]
Chuck Strome: I'm not sure…I would say the staff for what it is worth has worked pretty hard with the school district to come to an acceptable agreement on what the cost per student is and how the estimate is made in how many students will be generated from a project which is quite frankly not something that was done in some of the prior projects. I myself for what it is worth am much more comfortable with the formula as it is established now and I think if you apply the formula as its established now to some of our older projects you might have a more, a closer reality to what actually happened there but it should be stated publicly that there, this is not a number grabbed from the air it is based on a series of meetings with the school district and an accepted study and model for how students are generated in public school systems so nothing is perfect science, but I do think it should be pointed out it is a little different that we've done in the past and it gives me, at least me, additional comfort that the projection is more accurate.
Lou Trangucci: Well, just adding to what you just said Chuck, the numbers that they are going to formulate and what you are going to pay on school taxes is basically about 40% of what the school tax bill will be. I think you mentioned in your draft school tax should be $929,000 and you are going to wind up paying $364,000 and this is over the course of 20 years. I just wanted to bring that to the public’s attention.
Chuck Strome: But, but, but you got to be careful here. The project is currently generating zero dollars in school taxes. What the agreed upon minimum PILOT that at least I think the majority of the council at least we discussed is covering the increased cost to the school district as a result of the project not the not what the property would generate in taxes if it was fully taxed. Remember that project is, that property is currently costing the school district zero. No dollars. The project will add 22 students the cost of those 22 students based on a number agreed upon between the city and the school district is the minimum that the PILOT has to be for us to bring it forward. That was always my understanding. So its not that they are paying half of the school taxes that they would get. That's a perfect world where you believe that every project should be fully taxed and pay all of it. Well in my humble opinion that means you would have vacant property all over the place. I am just telling you that there's a formula that has been created to try to cover the cost that the project would, increased cost that the project would generate for the city school district.
Lou Trangucci: OK. That's fine Chuck. I just want to put that out for the public. One thing, I just want to go over parking. The spaces. Because you talk about 425 parking spaces here but 325 are going to be for residential and if you've got 285 units you've got less than I think the 1.5 spaces we wanted or you talked about in the draft. Is that correct?
Abe Naperstak: We're at one space per bedroom.
Lou Trangucci: One space per bedroom. And. And then the other 100 spaces will be for visitors and vistors coming into the…
Abe Naperstak: There's 4 per thousand.
Lou Trangucci: That' right, you need 4 per for the retail a hundred spaces for the retail.
Abe Naperstak: Yeah, and we're assuming that there's some you know…the way this parking is going to operate it's not like the retail is going to be standalone parking and the residential is going to be standalone.
Lou Trangucci: We talked about shared…
Abe Naperstak: There's going to be shared parking...
Lou Trangucci: In the middle of the day you're going to have some shared parking or...
Lou Trangucci: That's it right now.
Noam Bramson: OK. Anything else from council? Council Member Hyden.
Ivar Heyden: I share some of Councilman Trangucci's problems with the DEIS specifically relating to the number of children which I as Abe knows I think is low and I've always thought its low. The other issue we discussed. One of the parking problems that I think we discussed at the meeting was the, according to your pro forma, there was not a guaranteed, the parking, the parking spot was not included in the rent of these residential units. We have had an experience throughout the City of New Rochelle whenever that happens with people not buying parking spaces in the project but rather putting their cars out on the street. This is a residential neighborhood and I think this is a very real concern of the residents in that area and I would therefore recommend that you certainly consider making that part of your lease agreement…
Abe Naperstak: Right.
Ivar Heyden: …that one space comes with each apartment you have to charge more for the apartment but I would think it is a very good idea especially given our history here. The number of school children we have talked about a lot obviously, and we are going to disagree on that I'm afraid forever and ever but the other thing that concerns me is there any formula we can come up with in case there are more kids in the project are you willing to say we will give you $17,500 per child.
Abe Naperstak: The challenge, right…this is a topic that has been discussed with a number of the council members over the last week or two and the challenge that we have is really one that's going to be driven by our financing so it is very difficult for me to get construction and permit financing for our project where there is a moving, you know, a moving target like that. So not ruling it out completely but I think it is going to be difficult meet you to get what you want. Which is to say if you have 25 kids your taxes will go up 3 times $17,500 but what I am going to say to you if I have less kids my taxes will go down as well.
Ivar Heyden: Well, I do not have a problem with that if you…
Abe Naperstak: It is something I want to explore. I know its something councilmen Rackman brought up and its something that Councilmen Tarantino talked about and Councilmen Trangucci talked about. So I know its a real issue with members of council and we need to think creatively about ways to deal with it.
Ivar Heyden: OK.
Noam Bramson: Council Member Fertel.
Barry Fertel: Yeah, one of the questions I had at during our meeting was I think with all do respect to the council members they really have no experience or knowledge how to quantify the number of kids in a building that is being built. They are not quite experts and they are looking at another project which is the Avalon we might as well say it where there substantial number of children and I have asked whether or not we can take the formula that's provided by Rutgers which involves and to see whether or not that formula if you used it to the Avalon would come up with the numbers that are there to so that at least we can test that analysis to see whether it is an accurate projector. I do know one of your argument we made about Avalon is that you have 3 bedroom apartments there and that in effect creates a larger number of school children. I like to see someone do an analysis using the Rutgers formula visa-vi the Avalon so we can have some comfort that that analysis if it had been applied to that project would have come up with those numbers as well because that way it would show me as a council member that this is not something that's being done necessarily in a vacuum so I would hope to give me some comfort and council member Hyden who is concerned about the numbers and I assume if he saw that that formula would show the number of kids in the Avalon being applied to this project would give him comfort of the number of children in this project.
Ivar Heyden: Sure.
Chuck Strome: I think its are oblig…we can do that...
Barry Fertel: Well, I would like to see somebody do that…
FC Attorney: Again a lot of these questions that come up, and they're all appropriate and you discuss it for the public to hear maybe for the first time. These are the kind of questions that your going to ask that when the public hearing comes and your questions come we're going to answer in the FEIS and that kind of study your asking for is perfectly appropriate to go into an FEIS and you'll have that information before the final decision is made.
Barry Fertel: As far as the incremental, I am the only one that has been on the school board I was on it for 14 years I know we have to keep in mind that we're talking about 22, 23 kids are not going into the same class in the first grade. They will be spread over 6 grades, 8 grades, high school, so I want people to understand that we are not talking about packing an individual school with a lot of children. We are talking about adding school children over a stretch of years and that is why the increased cost is not the full amount allocated. If you divide the number of school children by the total number of the budget you do not have to add a new principle, a new building, you do not have to add a superintendent and you do not have to add administrators, you don't even have to add any teachers. But there is obviously an additional cost associated to each child and that was the figure that was come up with as the number. So I want the public to also understand that when you hear the number $20,000 or $22,000 per student that is just taking the budget dividing by the number of kids which is not the actual increase costs that would occur if you have 22 students across the range but there is an additional cost because you do have to provide services to these kids and I am aware of that and interested in that and also personally I think its a good thing that we add kids from these kinds of projects to our school system. I think it enhances our school system and provides kids from upper middle class backgrounds that will help diversify the classes. I think it is a good thing and I think its important and we should keep it in mind as well and so I think we should not always look at the negatives of adding children to our schools but the positives as well.
Noam Bramson: Other questions or comments
Lou Trangucci: I agree with Barry, but one thing it is good to add kids provided we have the room for them and that's the concern most of these children will be going to the Trinity school which is...
Barry Fertel: Well you don't know that some of them could be going to middle school or high school.
Lou Trangucci: That's true.
Abe Naperstak: And private school…
Lou Trangucci: And private school…
Abe Naperstak: And Catholic schools and parochial schools.
Lou Trangucci: One thing I know I went through this draft several times and nowhere is it that you're going to be dredging the inlet, is that correct?
Abe Naperstak: That's correct.
Lou Trangucci: Because you know you show this picture here [holds up Forest City proposal document for Echo Bay] which is, shows a nice waterfront view but in reality when its low tide it becomes a mudflat so, you know, you're going to create a walk around a mudflat, you're going to see it, going to smell it.
Abe Naperstak: I've said at this table before that half the time its high tide and half the time its low tide.
Lou Trangucci: Let's hope its during the day it's high tide.
Abe Naperstak: It changes throughout the day….
Lou Trangucci: If you can control the moon then I'm impressed [crosstalk], that's it Noam.
Noam Bramson: Council Member Rackman.
Shari Rackman: Is there a way for us to just find out how, how full to capacity Trinity is and what their breaking point is as far as adding students there?
Chuck Strome: I can ask the superintendent.
Shari Rackman: Will you find that out?
Noam Bramson: Sure.
Chuck Strome: Maybe someone already did but I don't know.
Shari Rackman: Because if we are looking at you know 20 kids throughout the grades puts us over where we don't fit in the building anymore…I just...
Chuck Strome: It is also hard to imagine…it has been said…
Shari Rackman: Well at some point…
Chuck Strome: …they will not be going to Trinity at the same time.
Shari Rackman: Right but at some point you do hit maximum capacity for a school and I don't know if its 50, its 100, its 20 or if its10. I just would be interested to know.
Chuck Strome: I suspect it also depends who you ask. But we'll find out.
Shari Rackman: Well…sure.
Noam Bramson: Did you want to say something Council Member Hyden?
Ivar Heyden: Is it , it is, proper or possible to have people from the school district come and answer these, these questions, here in front of us, in front of council?
Noam Bramson: We can have anything we want.
Chuck Strome: That doesn't mean they're going to agree to come, but you can ask them. I can invite the Superintendent or his designee to come to a meeting at some point to discuss that. I would, I would think it would be more beneficial to discuss it in a overall discussion rather a project specific discussion so as a discussion item, when we have some time, we can bring him down talk about how we came to the number and how we got all these things that would tell us…
Ivar Heyden: just so [crosstalk] the projects we're talking about tonight, the Albanese thing and this are both both related to the same [crosstalk]
Chuck Strome: Those numbers we've developed relate to all development projects they are not going to be different all residential development, they're not going to be different.
Kathleen Gill: They were developed in consultation with the school district.
Chuck Strome: After hours of discussion, yes.
Noam Bramson: Anything else from Council? Well, I would like to say if I may that although I along with everyone else, we have to reserve final judgement on this project until the process has fully run its course, until all these issues are fully explored, until the terms of the LDA are fleshed out to everyone's satisfaction. I think this is a great project. Not a good project. A great project. I'm very excited about it. This has been in the making for 25 years. We've been talking about renewal of the waterfront since as long as I've been a member of this city council and it is eagerly awaited by the vast majority of residents of New Rochelle and all these are important and legitimate questions and we're doing our job by asking them and its going to be the obligation of the staff and the developer to provide answers that are satisfactory to the council but I don't want the the tone of the conversation to be confusing to those who may be observing because there is no question in my mind that New Rochelle understands that value of a revitalized waterfront and eagerly wants to achieve it and for those who have doubts about some of the project's specifics I would ask you to think about a reverse scenario, imagine if this project existed right now and we had full public access to the Echo Bay shore even if at portions of the day its a mudflat and we had 5 or 6 acre public park that is vital and filled with people and if we had a vibrant store front on Main Street that is active and energized and if we had an attractive setting that abuts and approves neighborhoods and that recharges the entire economy of the East End and improves the economy of the downtown, imagine if that existed today and City government came to the community and said "You know what, we have a great idea, we're going to tear all of this up, we're going to say 'public your no longer allowed on this site, we're going to pump tons and tons of environmental contaminants and toxins onto the location, we're going to put out garbage trucks and our public works facility here we're going to take some abandoned automotive and industrial and concrete uses and locate them there" how do you think that would be received by the community? What we are talking about taking an area that is nothing but a dead weight on the physical and environmental and economic ambitions of this city and transforming it into a site of which we can be proud and even as we ask these questions about the details, as I said, its our job to do so I don't want any of us to lose sight of the big picture because this going to be a major win for New Rochelle when this is accomplished and I'm excited about the fact that we're so close, so close now to getting it down so…we have to decide today whether we're going to determine this EIS to be complete and send it out for a public hearing that is the only choice before us right now and with that I am happy to move Item 7.1, do I have a second?
Barry Fertel: I Second.
Noam Bramson: Second by Council Member Fertel. Mr Clerk, will you please call the roll?
Bennie Giles: Certainly. Councilman Trangucci?
Lou Trangucci: No.
Bennie Giles: Councilmen Tarantino?
Al Tarantino: No.
Bennie Giles: Councilmen Rice?
Jared Rice: Yes.
Bennie Giles: Councilmen Hyden?
Ivar Heyden: Yes.
Bennie Giles: Councilmen Fertel?
Barry Fertel: Not only is it complete but it's big, yes.
Bennie Giles: Councilwoman Rackman?
Shari Rackman: Absolutely.
Bennie Giles: Mayor Bramson?
Noam Bramson: Yes.
Bennie Giles: Motion passed, 5-2.
Noam Bramson: Thank you very much and thank you for those who are present, appreciate it.