Utica IDA holds public hearing on proposed Utica Harbor Lodging Group leaseback, tax exemptions for new apartments and hotels

Jack Spathe, executive director for the Utica Industrial Development Agency, opened a public hearing on a proposed leaseback transaction between the agency and Utica Harbor Lodging Group LLC, saying, “We’re here for a public hearing as it relates to Utica Harbor Lodging Group.”

The proposal described to the agency calls for the acquisition of roughly 20 acres at Wells Avenue in the Utica Harbor Pointe area and for development of two connected projects: a residential building of approximately 82 market-rate apartment units with parking, storage, a fitness center and common-area amenities; and two extended-stay hotels, each with about 100 rooms, plus parking and related infrastructure. The developer would acquire and install furniture, fixtures and equipment for both the residential and hotel components.

Under the terms presented, the company would initially own the facility, lease it to the agency for about a 24-year term, and then lease it back to the company for the same term; the company would sublease residential units to tenants. The agency would terminate its leasehold interest at the end of the lease term.

Spathe said the agency “contemplates that it will provide financial assistance to the company in the form of exemptions from sales and use taxes on materials incorporated into the facility, exemptions from mortgage recording taxes, and abatement of real property tax for a period of 24 years,” during which the company would make PILOT (payment in lieu of taxes) payments. During the construction period, the company would pay an amount equal to taxes calculated using assessed values and taxable status as of March 1, 2024; after issuance of a certificate of occupancy, fixed PILOT payments would apply for 20 years. PILOT payments would be allocated among taxing jurisdictions in the same proportions as the tax unless the taxing jurisdictions enter a written agreement assigning a different allocation.

Spathe also said the proposed financial assistance would be a deviation from the agency’s uniform tax exemption policy and was described in an inducement resolution the agency adopted on Jan. 15, 2025; he said the deviation would be confirmed in a final authorizing resolution adopted by the agency prior to closing.

No public comments were offered during the hearing; the hearing was closed at 11:15.

No formal vote on authorizing financial assistance or entering the leaseback was recorded in the hearing transcript provided; Spathe said a final authorizing resolution would come before the agency prior to any closing.