Letter to the Town Board: Do not accept long-term risks to avoid short-term problems

October 8, 2010
by Rob Greenstein

Dear New Castle Town Board:

Over the years we have heard many concerns from residents, as well as the town board, about the proposed residential development at Chappaqua Crossing.  While we all realize that change is upon us, and we all want what’s best for our community, at times the concerns of the town board seem to be at odds with those of the residents they serve.

This is not unusual since our interests are not always aligned.  For example, the town board must be concerned with the town’s tax revenues whereas the residents are naturally concerned about their own tax liability.  However, even when our concerns are not aligned we must all be guided by the same basic principles.  And one of the most basic principles is not to accept long-term risks to avoid short-term problems.

Major concerns of New Castle residents

The major concerns of the residents appear to be the long-term risks associated with a high-density residential development.  Residents have expressed concern about the long-term net revenue (after expenses), the long-term impact on our school system, as well as the long-term impact of a high-density residential development on the character and rural atmosphere of our neighborhoods, as well as the impact on traffic. 

Residents are concerned about the additional burden on the police, fire and library.  Residents are concerned about the permanent reduction of the commercial base, as well as the negative impact of a large increase in housing stock that will cause existing stock to suffer in a depressed housing market, and additional stress on parking at the train station, the sewer system and the watershed. 

A major concern of the town board: Loss of tax revenue

On the other hand, a major concern of the town board appears to be the potential loss of tax revenue from the property.  The town board fears that the site would turn into a “black hole” if this developer weren’t allowed to construct a residential development at Chappaqua Crossing. 

At the joint town and school board work session held August 10, 2010, Town Board Member Robin Stout explained “one of the things the community has to decide is if we’re willing to afford a ‘black hole’ up there, which means that the town expenses and school district expenses will be taken care of mostly by the residents.  Or will we be able to put that property to some productive use up there so that we can all get revenue?”  See “Town board’s counsel explains town’s obligations and developer’s rights to board of ed members,” NCNOW.org, August 13, 2010.

Likewise, at a regular town board meeting on July 13, 2010, Town Supervisor Barbara Gerrard stated “so for anyone who believes ‘nothing’ should happen on the site, that ‘nothing’ results immediately in higher taxes for all of us.  No Town or School District expenses would go down, but there would be significantly less tax revenue from the property, which automatically results in an increase for all of us.”  See “Supervisor Gerrard on issues raised about Chappaqua Crossing in NCNOW letters and commentary,” NCNOW.org, July 19, 2010.

Residents do not appear to be concerned with this “black hole” problem.  Residents accept that the tax revenue from the Chappaqua Crossing property may go down from its already depressed level if no zoning changes are granted.  Everyone seems to understand that with decreases in tax revenue from the Chappaqua Crossing property our collective tax burden has already risen and may continue to marginally rise. 

A different “black hole” concerns the residents

What residents are concerned about is a “black hole” of a different nature.  If zoning changes are granted that lead to the creation of such a large, dense addition to our residential base, taxes to existing residents would go up substantially to offset the cost of new residents paying lower tax rates.  These new residents would consume the same services the rest of us do but would generate substantially less tax revenue per new resident for the town.  This is the sort of “black hole” the residents are worried about. 

Had the Chappaqua Crossing property been zoned for such dense residential development prior to its being sold, the current owner would have had to pay substantially more for the property.  If the rezoning application is granted and development is completed, existing residents (not the owner) will be paying this difference through tax increases required to subsidize the new residents. 

Further, many believe that such a beautiful piece of property in Chappaqua could ultimately be developed in a way that lessens the existing residents’ tax burden.  The economy will eventually turn around.  Our community can weather the storm without turning to such a drastic and permanent measure as allowing a condominium development on this site that would be substantially subsidized by current residential taxpayers. 

If Summit Greenfield can’t figure out how to make money with the zoning as is, someone else will.  Indeed, the residents appear willing to accept short term, marginal increases in their tax burden resulting from no increases in tax revenue from Chappaqua Crossing rather than risking much greater taxes and loss of value to our town over the long term.

Chappaqua Crossing would not generate tax revenues for at least seven years

Plus, even if the zoning was approved tomorrow, this property will not generate any meaningful revenues in the short term.  Because the site is situated within the Croton Watershed, the regulatory approval process that Summit Greenfield will need to clear with the permitting agencies, particularly New York City Department of Environmental Protection, will be intense.  Even with an immediate zoning change, it could two to three years before Summit Greenfield even breaks ground. 

Thereafter, it will take two to three years before the phased construction is completed.  This assumes, of course, that Summit Greenfield has a construction lender committed to the project, and that Summit Greenfield keeps the property.  Meanwhile, Summit Greenfield will undoubtedly continue to contest their taxes, as is not only their right, but also their obligation to their investors.  In short, it is fair to say that this project could take seven years or more before generating any positive tax revenues for the town.

Projected tax revenues a drop in the bucket for both town and school budgets

And what are the projected tax revenues?  Although Summit Greenfield’s glossy brochure touts $5.2 million in tax revenue, Richard Hyman, the developer’s demographer, stated on September 28, 2010, that Chappaqua Crossing will contribute only 58 additional students to the Chappaqua Central School District and that the development annually will create $100,000 or $500,000 (depending on what you assume to be the appropriate cost per pupil to apply to the calculation) in tax revenues for the benefit of the school district.  As several residents pointed out, that is a drop in the bucket on an annual school budget of $108 million.  See “New Castle residents push back at Chappaqua Crossing developer,” NCNOW.org, October 1, 2010.

And how much money would we actually lose if we had a “black hole?”  That “black hole” represents 0.6% of our town budget; that’s ALL the property contributes in town taxes.  That 0.6% of the budget can be made up for by reducing expenses, or holding off on building the gazebo.  Indeed, the residents appear willing to accept a short-term “black hole” instead of accepting a long-term decrease in the value of our town.

The litigation the town board fears is a short-term problem

Another major concern of the board is being sued by the developer.  As Town Attorney Clinton Smith said on August 10, 2010, regarding the town board’s authority in enforcing its existing zoning code, “you have to realize that the town is not a party to the transaction. The town is the approving agency.  And one of those prisms [through which the board is obliged to look at the developer’s application] is the Fifth Amendment, which says that a person has the right to do what he will with his property, subject to reasonable regulation. That means that when you want to put a deck on your house you have to get planning board approval, but nonetheless that [approval] can’t be arbitrarily withheld.  If the town is to say ‘No, go away,’ there must be a rational, legally supportable basis in fact – and in law – for doing that.” 

Well, a basis for denying relief does exist.  In fact, many attorneys who have studied this issue believe that New Castle’s zoning laws would be found constitutional today.  New Castle has not changed its zoning law in order to lower the amount of multifamily housing units available.  And it certainly cannot be said that New Castle has prevented all multifamily construction as of right.  New Castle has multiple established zoning districts for multifamily construction, including one newly-created this past summer in the downtown hamlet, and has taken no action to ban construction of multifamily housing within its boundaries. 

And make no mistake about it, even though Summit Greenfield has reduced the number of units from 348 to 278 to 250 and now to 199, this is still a high-density residential development with two four-story 44-unit apartment buildings proposed.  At 199 units, Chappaqua Crossing would be larger than the largest existing condominium development, the 175 units of Old Farm Lake. 

A development of 199 units is more than we should have at the Reader’s Digest location. And while the developer may claim that the existing restrictions and a change in circumstances is causing them him a hardship, the fact is that this high-density residential development is not compliant with the Town’s Development Plan of which the first stated goal of residential development is to maintain New Castle’s “attractive, low density character” and to preserve “both the stability of existing neighborhoods and the rural atmosphere of the Town’s more outlying areas.” 

But litigation, while costly and sometimes protracted, is still a short-term problem.  And while I certainly can’t speak for all residents, I can say that almost 900 residents who signed the petition (http://www.ipetitions.com/petition/fighttostop) are ready to fight to stop the current proposal for residential rezoning at Chappaqua Crossing, rather than approve the residential zoning change.  Again, these residents appear willing to accept the short-term cost of a legal battle rather than accept the long-term costs associated with this residential development.

So, while we all have different concerns, we are not willing to accept long-term risks associated with our net revenue, stellar school system, traffic flow, the character and rural atmosphere of our neighborhoods, as well as the health and safety of our residents in order to avoid a few short term problems such as a “black hole” and litigation. 

The town board must insist that the developer eliminate all long-term risks to our community.  The town board must insist that Summit Greenfield abandon the high-density residential development, build the existing residential single-family homes the property is currently zoned for, and focus on reasonable commercial returns on their investment.  If Summit Greenfield cannot make an adequate return on the investment they made, then someone else will.  Our residents are willing to accept the short-term consequences.  The town board must be willing as well.

Rob Greenstein
(Special thanks to Jules Buxbaum, John Zuckerman, Edward Phillips and Ray Potter for their contributions to this letter.)
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For NCNOW’s complete coverage of Chappaqua Crossing, dating from 2007, click HERE.