Distinguished Members of City Council,
I am here to respectfully request that we not go forward with the Echo Bay project if tax abatements are going to be part of the deal. The Draft Environmental Impact Statement shows an astonishing $20 million in tax abatements given to the developer over a period of twenty years. Most of that will come out of the hide of our schools.
The opportunity cost of moving forward with this deal is enormous. To start, I believe the value of the tax abatements far exceeds what is shown in the DEIS. For example, the report assumes that fully loaded taxes would grow only 2.5% per year. That is well below what we are likely to see. In fact, the growth in school taxes alone would cause the project’s total tax bill to grow more than 2.5% per year.
At full assessment, this property would provide more than $960,000 to our schools in the first year. But as currently contemplated, Echo Bay would pay only $385,000 in the first year, for a shortfall of $575,000. That shortfall is worth 5 full time teachers or 10 teaching assistants.
Economic development is supposed to provide positive economic benefits to the community. Not only will Echo Bay not pay a fair market rate of taxes to the school district, but it will add children to the system causing a net economic loss on day 1. The $17,500 per student figure to be paid to the schools is woefully inadequate since average school spending already exceeds $22,000 per student. But we shouldn’t even work with averages since our schools are already over-crowded. Any proposal to bring population into New Rochelle should really be done with an eye towards raising sufficient revenue to build another school building. In that sense, we should demand a significantly higher tax figure for any proposed residential development; perhaps one that even exceeds our standard tax rates.
We will get one shot to develop this property appropriately. Once the deal is done, it’s done, and we will have forever lost the opportunity to develop one of our hidden jewels in a way that provides tangible economic benefits to the City. We have squandered several years working with the same developer on essentially the same concept which always had suspect economic benefits. It’s time for some fresh thinking on this one.