To the editor:

The following is in response to a flyer the Pelham Village Party/Republican team handed out yesterday. We have received many questions about how Mr. Gallagher’s claim that new development has the possibility to increase taxes. Here’ is our answer:

Nearly all the apartments being planned to “revitalize” Pelham will be taxed a much lower non-homestead rate (i.e., based on the building owner’s income/expenses), which pays lower taxes than single-family homes or condos. An example is Marbury Corners, which is all condo: It’s current homestead value to the tax base is $32 million. At non-homestead rates, its value would be $12 million.

The Common Sense (Republican) Pelham team says that we should wait and see what happens with the 79 new units approved, rather than rush into development by building several more big rental buildings downtown. And here is why there is potential to raise taxes:

Nearly every town in lower Westchester County is addressing revitalization with a similar rental-apartment strategy. New Rochelle alone has about 4,400 mostly “luxury” units approved, all aimed at the same demographic Pelham is targeting. But New Rochelle has many more lifestyle amenities, more parking and it’s only three more minutes down the tracks, all at similar price points. Pelham’s clear advantage is its schools.

So the Pelham Village Party (Republicans) worry is that if the market in Pelham does not materialize for rental units, the owners of (unprofitable) buildings can apply for even lower tax rates based on the commercial, non-homestead rates they would pay initially because the building gets assessed for taxes, not each apartment. So, if the apartment buildings begin to lose money because of competition—or possibly more concerning, if they attract more children or put more demand on village infrastructure (like parking, sewers, fire and police, sanitation) than the developers’ extremely optimistic projections—they will end up being tax-negative.

Here are two examples:

A worrisome development about 8 Boulevard West (16 luxury units) is the fact that the owner, Elk Homes LLC, recently applied for condo status. Elk is a build-and-hold developer that puts up rental buildings to hold onto and capture payment streams (rents) into perpetuity along with the capital appreciation of the building. This was highlighted in all of the proposals. The fact that they about-faced and applied for condo status before completion—and according to the owner’s quote in PelhamPLUS, they did so because of “market forces”—is a very pessimistic statement about the future of the Pelham market by a savvy developer already vetted by the current board. Elk may have bailed because of the large number of units on plan in New Rochelle or a variety of any other reasons. Either way it is troubling.

Second, 101 Wolf’s Lane will have 63 two-bedroom and three-bedroom apartments. If only a few more children show up than the developer of that project estimated, that building will become tax-revenue negative very quickly at non-homestead rates because the cost of putting marginally more kids in the schools will exceed the original pro-forma tax-revenue estimate. There is a very narrow margin, just five or six kids. This is also true for all the proposed projects and also true for the amount of parking and the number of vehicles projected. All the pro-forma estimates are built on the absolute best-case scenarios.

We hope this response has been helpful. We’re glad so many people have taken such a keen interest in the current development plans and that they share our concerns.

Please remember to vote for us on the Pelham Village Party or Republican Party lines.

Submitted by

Mike Micciche

110 Pelhamdale Ave.

and Cathy Mazzaro

243 Elderwood Ave.

on behalf of

Candice Ripoll

Arthur Long

Steve Doka

LeRoy Marriott

The Common Sense Pelham slate