Student Housing: Downtown student housing complex could begin construction this summer
By Nancy Dooling for Press Connects
BINGHAMTON — Developers of a $20 million downtown student housing project say they’re hoping to start construction of the four-story building as early as this summer.
“We’re optimistic that we can be under way in July or August,” said Marc Newman of Newman Development Group. The goal is to have the project ready for college students in August 2011.
The project on Monday cleared a final hurdle when the Broome County Industrial Development Agency voted to approve a payment in lieu of taxes agreement that would give the owners of the downtown property a tax break over 20 years.
The project, College Suites at Binghamton, is the largest privately funded construction project in the city in at least three decades.
Monday’s action by the IDA was the last step in the approval process.
Some have been opposed to granting a tax break for the project and several city landlords are afraid the project will hurt their ability to rent to students.
Developers said they couldn’t finance the privately funded project without a 20-year PILOT agreement as well as a property tax cap that limits annual increases to no more than 3 percent a year for 20 years.
They also said a market study indicated the upscale project will attract students willing to pay more than $700 a month for a private bedroom and bathroom. More than 300 students are on a waiting list for a student housing project that Newman developed in Vestal.
Local officials are hoping the influx of about 400 Binghamton University students to Washington Street will give a much needed boost to businesses downtown as well as help attract a law school to the city.
“We should all be pleased and proud of this project,” said Richard D’Attilio, the IDA’s executive director. “I think it’s worth it.”
Developers have spent weeks meeting with local elected officials, including members of the Binghamton City School District and the Broome County Legislature, to push for the project. Newman didn’t need approval from either agency, but met with leaders anyway to explain the project.
Last week, the Binghamton City Council voted to authorize Mayor Matthew T. Ryan to approve the PILOT agreement. Newman needed a green light from the city and the IDA to proceed.
Under the PILOT, Newman Group would pay property taxes on 25 percent of the assessed value of the project, set at about $8 million, from 2012 to 2016. Payments would increase 5 percent a year until the 20th year of the PILOT, when taxes on 100 percent of the assessed value would be paid. The 3 percent cap on annual property tax increases was a condition of their lenders, developers said.
City council members have emphasized that while Newman is getting a tax break, the city will receive more in taxes over the 20 years of the PILOT agreement than it would have received if the land remained vacant and undeveloped. Newman Development will pay about $8 million in taxes on the riverfront property over the 20 years.
Newman said Monday after the IDA’s vote that he was humbled by the process.
“We’re extremely happy and grateful — and I want to emphasize ‘grateful,’” Newman said. “We do think it’s going to be a brighter Binghamton. ”
The project could get under way in as little as two months, depending on how quickly New York State Electric & Gas Corp. cleans up the site. The utility is spending $7 million to clean polluted soil from the property, the site of a former gas manufacturing plant.
Newman Development still has to submit building plans to the city for approval and obtain building permits, Newman said.
