Hill Country Observer
February 2007
Big-box tax impact: boon or bane?
Backers, critics dispute economic benefits of a Columbia County project
By TRACY FRISCH
Contributing writer
[also, see response by Greenport Neighbors Action Team, which follows]
GREENPORT, N.Y.
Supporters of a major new shopping plaza about two miles north of the city of Hudson say the project will deliver a much-needed infusion of tax revenue along with a wider array of shopping options.
But critics say the economic projections are overstated, and they predict the shopping complex actually will wind up adding to the burden of local property taxes in Greenport, the suburban town that surrounds Hudson on three sides.
It’s far from clear whether town planners will attempt to decide which view is correct.
Greenport doesn’t have zoning or a comprehensive plan to guide its growth. The town Planning Board does have the option of requiring a full-fledged environmental review of the project under state law – a review that might assess the project’s effects on town infrastructure. But the board so far hasn’t decided whether to do so.
What is clear is that the scope of the new shopping plaza would dwarf those already in place on the busy commercial strip of Route 9 north of Hudson. With 565,000 square feet of retail space – the equivalent of 12 football fields – the shopping complex proposed by Widewaters, a major retail developer based in Syracuse, would be fully one-third the size of the Albany area’s Crossgates Mall, the largest mall in upstate New York.
To supporters like Greenport Supervisor John Rutkey, the new plaza represents a chance to capture a share of retail activity that otherwise would be lost to places like Albany and Kingston, where many people from the Hudson area now travel for major shopping, or to Greene County, where massive new Wal-Mart and Lowe’s stores opened last month.
“The project will help the tax base,” Rutkey predicted.
But James Sheldon, a financial analyst from southeastern Columbia County who has taken a critical view of big-box retail development, is among those who say the potential economic benefits of the plaza are dubious.
Sheldon estimates the completed Greenport plaza would generate about $400,000 in additional property taxes for the Hudson school district – about 2 percent of the district’s current tax revenues. But he points out that the shopping plaza also will require additional services that will cost the town money. Water and sewer expenses not covered by ratepayers, for example, already eat up 40 percent of the town’s budget.
"Unless the town of Greenport is one in a thousand, Widewaters will raise your taxes," Sheldon warned at a public hearing on the project in late December.
Expanding northward
The plans for Greenport’s megaplaza call for three big-box stores, ranging in size from 69,000 to 184,000 square feet -- plus 60,000 square feet of outdoor retail space. A number of secondary tenants -- retailers, three restaurants and possibly a gas station -- and a 2,800-space parking lot would round out the project.
The new complex would be the northernmost of a series of shopping plazas along Route 9 north of Hudson and would be built on a 128-acre site near the northern end of Joslen Boulevard, a popular back way into the city. The property currently hosts the steel skeleton of a never-completed Kmart and is near land in Stockport and Claverack where zoning expressly prohibits shopping centers.
Greenport, which has a population of just over 4,000, already is home to most of the large-scale retail stores in Columbia County. In a familiar pattern, the suburban town developed into the area's biggest shopping destination more than two decades ago, leaving downtown Hudson in decline until the city made a comeback in the late 1990s as a center of restaurants, retail boutiques and antique stores.
Exactly which stores would occupy the new shopping complex is unclear; Widewaters has so far refused to identify the project’s tenants. But the developer’s traffic study suggests Greenport's existing Wal-Mart would relocate to the project -- a move that could leave the nearby Greenport Town Center plaza without one of its anchor tenants.
Awaiting a decision
Despite the magnitude of the Greenport project, the town Planning Board has yet to rule on whether the shopping plaza would have significant impacts under standards set by the State Environmental Quality Review Act.
Critics of the project cast the decision as a no-brainer, pointing out that, by finding that the project would have significant impacts, the town would simply be requiring the developer to pay for a detailed environmental impact study. The board still could approve the project later, though the plans might need to be modified depending on the results of expert studies.
"Is this a major impact?" Patrick Doyle of Greenport asked at the Dec. 26 public hearing.
"If you answer no, then I'm scratching my head. ... Saying yes means you can take money from Widewaters and do the studies."
Requiring the developer to submit to a full environmental review also would give the public more chances to challenge the developer’s claims about how the project would affect traffic, water quality, wildlife, local infrastructure and other issues. Both the Columbia County Planning Board and the Stuyvesant Town Board have urged Greenport to pursue a full environmental review, as have some city officials in Hudson.
Shades of an earlier battle
Public debate over the project has been intense, offering something of a reprise of the battle several years ago over St. Lawrence Cement’s proposal for a coal-fired cement plant in Greenport.
Opponents of that project argued that its economic benefits were overstated and that the plant was fundamentally incompatible with a local economy increasingly rooted in recreation, tourism and the arts – a view backed by a state ruling in 2005 that prompted the cement company to drop its plans.
Susan Falzon, a board member of Friends of Hudson, the group that led the opposition to the cement plant, spoke out against the Widewaters proposal in December, telling the shopping plaza’s supporters, “I would not like to see this project approved if your expectations are false or your hopes are unfounded."
The Dec. 26 public hearing on the proposal drew a standing-room-only crowd of about 150. Many townspeople spoke in favor of the shopping plaza, but a slim majority of those who spoke – including many from Hudson and neighboring towns – were opposed.
Supporters said they welcomed the prospect of more local options for shopping. Some expressed nostalgia for an era when, they said, Greenport was a prosperous town, a place where everyone could afford to own a home and good jobs gave the younger generation reason to stay.
Although some supporters acknowledged that the project might worsen traffic congestion on Route 9, they argued that it’s the job of the state Department of Transportation, not Widewaters, to fix that problem.
And one after another, supporters stated with certainty that the shopping complex would
lower their property taxes.
A cure for high taxes?
Taxation is a popular theme in the controversy because Greenport’s taxes are some of the highest in the county. In an analysis of 2004 data, Sheldon concluded that Greenport’s town property taxes averaged $588 per person. By comparison, town property taxes per capita averaged $363 in the rural towns of Columbia and Dutchess counties, he concluded.
Town tax collector Sharon Zemko, who has served in her post for a decade and favors the shopping plaza, acknowledged that Greenport’s taxes are high. She said some townspeople are scared they’ll become unable to pay their tax bills and will lose their homes.
Mark Clark, a teacher from Ghent, suggested the shopping plaza would help correct a situation in which people can't afford to live in the town where they were raised – a situation that has prompted local voters to reject school budgets in many recent years.
But Sheldon and others say claims that the project will help with the town’s tax burden are at best overstated – and might be flat-out wrong.
Sheldon, whose analyses are detailed on his Web site, www.littletownviews.com, said that based on studies of similar developments, he calculated that the town's property taxes likely would increase to 20 percent above current levels to cover the difference between the increase in required municipal services and Widewaters' tax contribution.
Mark Gerstman, a lawyer representing Greenport Neighbors, a group opposed to the plaza, also cited studies he said show large retail complexes often hurt a town’s tax base as housing values near the complexes plummet.
And Scott Fuchs of Taghkanic noted at the public hearing that Greenport's Wal-Mart, opened in the early 1990s, has not resulted in lower taxes for the town.
Greenport already has the largest concentration of commercial property among Columbia County’s towns, and commercial establishments account for a quarter of the town's total assessed value of $450 million. So if large-scale retail is really the ticket to lower property taxes, opponents say, why are Greenport’s taxes high and getting higher?
Sales tax windfall?
Many supporters of the project say that, apart from direct property tax payments, the shopping plaza will generate a windfall in sales taxes that can be used to offset the demands on property taxes. But opponents say these expectations also are too optimistic.
Sheldon predicted that a large volume of Widewaters' projected sales would be achieved by cannibalizing other stores, making the net gain in sales correspondingly more modest.
And whatever such a project might generate in sales does not automatically translate into greater income for Greenport. New York’s counties make their own rules about how to divvy up their sales tax revenues, often deciding to retain a big chunk of the proceeds.
Columbia County currently keeps 70 percent of the proceeds from its 4 percent county sales tax, handing over the other 30 percent – which amounted to $9 million in 2005 -- to its municipalities. Towns receive their share based on population, and the city of Hudson gets an extra $160,000.
Given this formula, a big increase in sales in Greenport likely would bring a comparatively small amount of additional sales tax revenue to the town coffers. The town receives about $840 for every $1 million in sales across the county, currently collecting a little more than $550,000 a year – well under 15 percent of its total budget.
Even if the town collected an extra $140,000 a year in sales tax revenue when the project is fully built, that wouldn’t be enough to offset the increase in the town budget from 2004 to 2006.
But Rutkey, while acknowledging that he’s “no financial whiz,” said he’s sure “we’re going to collect tax dollars at the state and local level.”
And if the project isn’t built, the town will lose out to places like Greene County where major new retail developments are opening, he cautioned.
“I don’t think Columbia County can afford to let our businesses slip away,” Rutkey said.
Response from Greenport Neighbors Action Team
by Nina Sklansky
February 22, 2007
To the Editor:
Thank you for your coverage of the Widewaters project in Greenport. Your story did a very good job of describing the issues which confront us—at least those of us who are committed to asking questions and getting answers from our Planning Board.
However, it is inaccurate to characterize Greenport Neighbors as "a group opposed to the plaza." That is not our position. Ironically, and disturbingly, that is also the misapprehension held by many here who unquestioningly support the Widewaters project.
Those of us who have questioned this plan have many opinions about the prospect of another mall coming our way. However, what unites us is a desire to see the Greenport Planning Board use all the power at its disposal and to acknowledge, via a positive declaration under the State Environmental Quality Review Act, the obvious: that this enormous project will have serious impacts on our area and the county at large.
Something is going to be built on those 128 acres. Short of a real planning effort that would explore what is truly right for Greenport, at least a positive declaration would enable us to make the best of what is, at best, a cookie-cutter plan.
It is not a matter or pro or con. It is a matter of what is right.