ARISE and Adirondack Club Resort

A few weeks ago, I had a chance to speak with someone who lives and works in Tupper Lake.  He characterized the ACR conflict as the affluent residents who want to prevent development of ACR vs. working people who see it as Tupper Lake's last best hope for revitalization.

My question is, if this is such a great development, why haven't banks rushed to finance it?

Peter, Affluent residents of Tupper Lake against the ACR? This is just another spin by the developers to gain support for this fiscal train wreck of a project. From your post it's obvious you haven't been following this project for very long. Ex. Early on in the project it was revealed that the lead developer, Foxman, was President of Sunrise S & L in Florida. It went down the drain with many other failed S & L's in the 80's. A couple of his associates at the bank actually went to jail, Foxman escaped by the skin of his teeth. Just google Michael D Foxman and you can read all about it in the lawsuit brought against him. At the time it was the largest failed S&L in the nation, the Gov bailed it out to the tune of 680 MILLION DOLLARS! Do you still wonder why no banks are rushing in to offer financing?      The bigger problem with this financial nightmare is the PILOT program. The basic premise is this: ACR gets tax exempt bonds issued through the Franklin county IDA totalling about 36 Million dollars. The ACR uses these $s to install RESIDENTIAL roads, water, sewer and electric infrastructure components. The kicker is that the developer doesn't pay back the bonds through the sales of the property, he pockets all the proceeds, the bond gets paid back(supposedly) through the forfeiture of property, county and school taxes on these new luxury second homes. The Bond payment for the first phase of the development is over $900,000. which means at the current combined tax rate (aprox $20/1000) they need to sell 46 Million worth of property just to make the bond payment. The town, county and school will only receive tax money if they sell more than the 46 Million and only on the amount over the 46 million. The town of course will be providing services to these new wealthy second homeowners causing the existing locals tax bills to increase disproportionally to make up the shortfall . Another tidbit as to why no banks will touch this financial house of cards is the other main partner in the ACR who was featured in a photo recently on NCPR. He has 3 federal tax leins against him for non payment of income tax for the years 07,08, and 09, totalling over $540000.  Not much chance of any bank stepping up to finance this fiasco of a project. Hope this explains things.                                                    

endoftheline wrote

 The town of course will be providing services to these new wealthy second homeowners causing the existing locals tax bills to increase disproportionally to make up the shortfall .

 Hope this explains things.

What expenses exactly will these 2nd homeowners cause the town?  If they don't live there full time they won't be sending kids to school.  They are much more likely to spend lots of money locally supporting local businesses which would bring in sales tax revenue.  But you left wing types don't really understand how the economy works now do you.

What explains things is that You eco-nuts have run the costs of this project thru the roof while clearly not caring if the local town folk can make a living or not.  If you had your way the towns residents would all all move away so the forest could regain the town.  The eco-nuts have dragged this project out for so long the economic cycle changed to make the project less appealing to get a loan for.  How many jobs could have been created since 2006 when this was first proposed if end of the line and the rest of his NYC green buddies did not get in the way of progress and people making a living?

Wow.

I just want to ski the mountain (and sometimes play the Golf Course in the summer).

I don't care what happens with the resort, the million dollar homes, or the development.  I just want the mountain open and awesome.  What would be the best way to make that happen?

Ausable, I am about as far from an Eco Nut as you can get. Did you see anything in my post other than financial concerns? Town Services? The same services that cost everyone else in the town $20/1000 in taxes. Road plowing, sanding, salting,insurance, fuel, veh maintenence, payroll, overtime. And all these costs will go up if the development goes as proposed, if the town is not getting full taxes from these wealthy second homeowners guess who makes up the shortfall? It's not that hard a concept to understand. This PILOT program is the worst, it doesn't guarantee the taxing entities a penny in actual tax payments, they only get tax $$'s if there is any left after paying the bond payment each yr. I'd love to have the oportunity to ski at Big Tupper again but not at the price it will cost everyone else.  

Interesting idea thrown out by Jessica Collier of the ADE:

"The Boston Globe is reporting today on a ski slope in Londonderry, Vt., where citizens are doing something similar to what's happened in Tupper Lake over the last two years.

"At Magic Mountain (maybe the name helped a bit?), they've raised nearly $1 million to renovate the mountain there by selling shares to renovate a mountain that was closed for most of the 1990s. Once a certain number of shares are sold, ownership will transfer to a partnership that includes share owners and Magic president Jim Sullivan.

"It's similar to what happened at Hickory Ski Center in Warrensburg, which is now owned by about 300 shareholders."

"It's interesting, because it seems to come out of the same spirit that helped ARISE reopen Big Tupper on a volunteer basis. Yet they are looking to make that model sustainable, while ARISE says that it's impossible to keep that going here for much longer. Granted Big Tupper's model was designed to be temporary while the ACR awaits permitting, with volunteer labor and many temporary patches to the infrastructure there, but I wonder if it could have been successful if it was designed in a more sustainable way."


Full Story:

http://www.adirondackdailyenterprise.com/page/content.detail/id/527844.html

endoftheline wrote

Ausable, I am about as far from an Eco Nut as you can get. Did you see anything in my post other than financial concerns? Town Services? The same services that cost everyone else in the town $20/1000 in taxes. Road plowing, sanding, salting,insurance, fuel, veh maintenence, payroll, overtime. And all these costs will go up if the development goes as proposed, if the town is not getting full taxes from these wealthy second homeowners guess who makes up the shortfall? It's not that hard a concept to understand. This PILOT program is the worst, it doesn't guarantee the taxing entities a penny in actual tax payments, they only get tax $$'s if there is any left after paying the bond payment each yr. I'd love to have the oportunity to ski at Big Tupper again but not at the price it will cost everyone else.

correct me if i'm wrong but the way i understand this the developer is somewhat exempt from property taxes but the homeowners that buy the homes will not be- they will be paying their full share and then some becuase they pay taxes but don't send kids to schools etc

Endoftheline has always focused on tax/financing/infrastructure, not environmental issues.  To call him an "eco-nut" does not correspond to the issues he brings up.  I have skied Big Tupper and I want to see T. Lake thrive but I think that some of the issues he writes about warrant consideration.  Just take a look at Front Street in North Creek.  The notion that people are going to come up and spend 45 million dollars on real estate in a remote location begs discussion.

Ausable,  I am correcting you because you are wrong, please re-read my post 11/28 1:13 pm. The bonds are tax exempt from federal income tax which makes them more attractive to the buyers of the bonds. The Homeowners Town, County and School taxes are diverted from to pay the Bond payments. The taxing entities receive nothing in the way of taxes until the bond payment is made, as proposed the bond payment in phase one is just over $914000.  At the current tax rate that means the Town, County and School will not see a penny in tax revenue unless the developer sells 46 Million dollars of property, and they will then split whatever tax revenue is left. Keep in mind the developer proposed this project in 2005 as the realestate market was skyrocketing. The prices he projected then were optomistic to say the least, then in 2010 he came up with new figures which were on average about 50% higher than the 2005 projected selling prices? He needed to do this to make his financial projections work, at least on paper. You don't have to be a realestate expert to realize how ridiculous this sounds. If you doubt any of my info just do some homework, go look at the actual application submitted to the APA or better yet go through the Hearing record, it's all there and lots more.

i understand what you are saying but once the a property is sold to a private owner that is not a bond holder they will be subject to the normal real estate and school taxes

the "deal" is only for the developer not the buyer of the property.  the more properties they sell the sooner the developer will have to pay taxes

the more they sell the more taxes to be collected by the town from the property owners the vast majority of which will be 2nd home owners who historically use much less town resources

the more  wealthy owners the more they will all spend in Tupper and the surrounding businesses who will collect more sales taxes

the money will all roll down hill

also your arguement fails because its built around the idea that how unfair it is that the developer will not pay much taxes but they are not now paying much in tax now and if the deal does not go thru then the town will never collect any taxes on this land.  So the town is forgoing money that it doesn't get now anyway for the small investment that they will gain high end ratables and wealthy customers for its businesses.  Given the total lack of other economic development opportunities getting this development going as soon as possible is the wise thing for the town to do and the eco-nuts need to get the heck out of the way.

Sorry Ausable but you should read the latest proposal on the ACR PILOT, specifically the so called Sub PILOT. Initially the developer enters into a PILOT program with franklin county on the land. The developer has come up with this concept of a Sub PILOT where the buyers of each lot will enter into their own individual PILOT with Franklin County. So upon purchasing the properties the individuals tax money will be used first to pay the Bond payment, it won't be going into the local coffers. Again, read the most recent submission to the APA it's all there. You should also read the section where the Franklin county IDA states they have no idea how this Sub PILOT would work and their NY City Bond Counsel has never heard of it. The FCIDA also asked the developers attorney to show them another PILOT with this type of set up with no response.