2017-04-19-AC-ATM-rpt (Article 44)

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A proposed new Memorandum of Agreement between the Town and Brookhaven provides for the following: Payments in Lieu of Taxes • Brookhaven's PILOT payment will increase by 13.6 percent, but the entire increase will not take effect immediately; 7% of the increase would occur in the fiscal year the Certificate of Occupancy is issued for the core building, with the remaining 6.6% increase to occur 12 fiscal years later. • Beginning in the fiscal year the Certificate of Occupancy is issued for the core building, and continuing for the subsequent 14 fiscal years, the Brookhaven PILOT will increase by 2.5%instead of 3% annually. • After the Affordable Housing Mitigation Payments, discussed below, are complete, the rate of increase for the Brookhaven PILOT will revert to 3% annually until the parties agree to a new PILOT payment. • If in the future Brookhaven is determined to be subject to property taxation, the PILOT payments will cease and regular property tax payments will be made instead. Affordable Housing Mitigation Payments • Brookhaven will make affordable housing payments to the Town with a present value of $1,536,369, but payable over 15 years (the sum of the mitigation payments, with interest, is $2,081,631) • The agreed amount payable for affordable housing is based on the Town's analysis of the cost today of purchasing land for and constructing 5.5 affordable housing units. • The additional Assisted Care units will be constructed in such a fashion that they will not be included in the Town's Subsidized Housing Inventory denominator of market-rate units at the next census • The affordable housing mitigation payments will be made if the expansion of Brookhaven proceeds, regardless of Brookhaven's property tax status with the Town. Analysis A PILOT is a condition of Brookhaven's current special permit and, together with the housing mitigation payments, would be a condition of the new special permit. Representatives of the Board of Selectmen, the Planning Board and Brookhaven have spent many months negotiating a package that is mutually acceptable should the zoning change be approved. This includes: • Deferring the commencement of any affordable housing mitigation and increased PILOT payments until the fiscal year a Certificate of Occupancy is issued for the core building. • Spreading payments for the Affordable Housing Mitigation over a 15-year period. • Deferring a portion of the 13.6% increase in the base PILOT, phasing it in at the fiscal year of the Certificate of Occupancy (7.0%) and 12 fiscal years later(6.6%). • Lowering the annual increase in the PILOT from 3% to 2.5% immediately and continuing that lower rate of increase through the fiscal year that Affordable Housing mitigation payments for the project have been completed. Annual increases of the PILOT will return to 3% in the 16th fiscal year after the initial 7.0% increase to the base PILOT is made. 2