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Adjudicatory Hearing Round III – Day One

June 3, 2011 by · Leave a Comment 


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By Dan McClelland, Tupper Lake Free Press

Round III of the Adirondack Park Agency Adjudicatory Hearings
Wednesday, June 1, 2011 at the Tupper Lake Train Station

Participants: Kirk Gagnier, representing the town and village planning board, John Caffry, attorney for Protect the Adirondacks, Shaun LaLonde, engineer, APA Mark Sengenberger, APA contract employee, David Gibson, Adirondack Wild, Mr. and Mrs. Jerrier Haddad, Elaine Yabroudy, Peter Littlefield, Bob Fuller, represent village, Mayor Mickey Desmarais, Supervisor Roger Amell, Shanna Ratner, witness for Protect the Adirondacks, Bruce and Esther VanVranken, Chamber of Commerce rep Jon Kopp, Paul Van Cott, attorney for APA, Tom Lawson for Preserve Associates, Robert Sweeney, counsel for PA, Kurt Stiles, APA chairman, Don Dew Jr., Rick Dattola, Sandy Strader, Rick Wilburn, Kevin Franke, no one from DEC, Phyllis Thompson, Dennis Zicha, Allison Buckley for Adirondack Council, Kevin Jones, Carol Richer, Jim Martin of the LA Group.

Issues subject to this hearing are the APA board’s issues No 5 and 6 which deal with financial feasibility of the project and any and all impact, good and bad, it will have on the community.
Editorial comment: Lingering question: why does the APA and the outside groups care if Preserve Associates is successful with the Adirondack Club and Resort? It’s a private investment where investors are taking all the risk.
Judge Daniel O’Connell, administrative law judge: roll call at 10a.m.
Tom Ulasewicz, attorney for Preserve Associates late for hearing so postponed briefly.
Stipulation by village of Hudson Group report.
Stipulation by DEC staff concerning stipulations #8 and #9.

Judge: initially received notice of rebuttal from DEC’s Scott Abrahamson. My understanding distributed to all parties. My understanding…outlined some of the DEC review by staff. There are attachments and copy of notice of incomplete application issued by DEC staff.

Didn’t provide opportunity for comment, so will do that now.

Paul VanCott: worked with DEC staff to draft stipulation. No objection.
John Caffry: No objection
Dave Gibson: Have concerns about stipulation but no objection.
Jon Kopp: No objections.
Kevin Jones: Responded, didn’t I?
Judge: Don’t have correspondence with me
Parties: (Richer, Zicha, McClelland, Thompson): no objections.

Judge: These stipulations will be included with other stipulations.

Village stipulation Re: Hudson Group report.
Any objections?

None.

Judge: accepted into evidence. Included with Hudson Group report was Attorney Sal Ferlasso’s (sorry about spelling) cover letter.

John Caffry circulated proposed schedule of hearings for issues No. 5 and 6.

Caffry to Judge: Two potential problems but have been worked out between TU (Tom Ulasewicz) and I.
Both forgot Adirondack Wild’s Klemons was locked in for next Tuesday. Some time ago Mr. Van Cott circulated letter that included Monday to Friday. You sent out reminder to parties that started again on Tuesday to Friday. That’s problem that must be worked out. I have concerns, with concerns to your schedule, if don’t start on Monday may not finish next week. My witness David Norden has to leave by Thursday.
TU and I tried to pick days to accommodate witnesses.

Judge: I can get here by Monday.

TU: finalize schedule right now?

Judge: Like to push ahead to see what progress we can make.

TU: A number of my witnesses are traveling long distances. Running into problems scheduling witnesses on Friday.
Judge: If we get through Protect the Adirondack’s witness wewill be making good progress.

Caffry: Re: discovery documents not provided us. You gave applicant a deadline of May 20. I got some documents e-mailed to me last night. Just had time to skim them. I renewed my motion last week because I didn’t receive any. I’d like to reserve on that motion to give me a chance to review documents. May have some additional witnesses.

Judge: Motion relates mostly to issue No. 1?

Caffry: May apply to these issues as well.

Judge: When you are ready for me to consider the motion, just let me know.

Shanna Ratner, witness for Protect the Adirondacks had two pre-filed documents and one exhibit. She is an economic development specialist who operates a small consulting firm in Vermont.

Ratner: We’re consultants in private company in ST. Albans, Vt. Have worked in Adirondacks. A number of clients in Adks, including Adirondack North Country Association (study on forestry), worked with Town of Franklin on building energy efficient buildings, worked on impacts of Canadian spending on study for Plattsburgh Chamber of Commerce.

Her resume is exhibit #192.

Caffry: Gave notice to parties that part of testimony would come in rebuttal. Some I could address now, and do more during redirect. I specified in my notice our witness, David Norden, will testify next week and like same procedure.

Tom U. : Concern I have of rebuttal of Mr. Norden, there’s been a tremendous reliance on recall with multiple witnesses. I will consent to that, but like to see pre-file testimony on the rebuttal.

Judge: Your concern about Mr. Norden’s rebuttal?

Tom U: Yes.

Caffry: I’d like to note appearance of Lorraine Duval, co-chair of Protect the Adirondacks.

Caffry: In your pre-file testimony, Ms. Ratner, you discussed size of waste water system. Refer to pre-file testimony of Ed Hernandez, engineer who designed the system for Preserve Associates. Question that discusses phasing of plant. Was that in the application materials you reviewed?

Ratner: No.

Caffry: Phasing of plant capacity, does that impact your concern over over-capacity of plant.

Ratner: No. Applicant agreed to build sewer plant in phases. Doesn’t address if sales are low. If over-capacity never gets filled.
Even if built in phases, should be concern about not reaching proper usage.

Caffry: Look at pre-file testimony of James Martin of LA Group? Your testimony addresses issue of operational jobs at resort, after construction?

Ratner: Yes.

Caffry: Does Mr. Martin’s testimony also include operational jobs?

Ratner: Yes it does on page 19 and 20.

Caffry: Concerns about methodology used on those pages to estimate operational jobs at phase out?

Ratner: Yes, no methodology. If going to come up with estimate of jobs, you need to lay out progress of development and what number of jobs needed for what operations. Look at what happens at other facilities. That’s no where in this application.

Caffry: Look at page 10 of Mr. Martin’s testimony. Where he discusses concept of multipliers?

Ratner: Concept of multipliers- standard methods and models to determine.

Caffry: Concerns about his calculations?

Ratner:He’s essentially taken statewide multiplier and applied them to a project that only effect four very rural counties. Concept based on re-spending. Would be less than res-pending in entire state. Very misleading.

Caffry: Fair to say that many of economic benefits predicted by applicant would occur outside the four county area?
Ratner: Yes.

Caffry: Looking at page 14 of Mr. Martin’s pre-file, do you see a discussion of per capita demand analysis?

Ratner: My understanding is to look at budget, determine people served and get per capita costs.
Applicant used those numbers to determine new spending by new residents. Municipalities would incur those costs.

Caffry: Concern about his methods?

Ratner: In other resorts communities, as others move in, they required a level of service that is often not present. So pressure on communities to deliver more services they normally don’t.

Caffry: People in cities expect higher level of services?

Ratner: Yes, based on my experience. Would occur here as well.

Caffry: Mr. Martin’s pre-file on page 26, line 7. Fair to say his testimony addresses excess infrastructure if project were stopped after initial phase built.

Ratner: Yes.

Caffry: Agree with statements?

Ratner: Applicant appears to agree to put in infrastructure before construction of homes. If lots don’t sell, then a problem.

Caffry: If 30 lot subdivision, and only five lots sold, what cost benefit be effected.

Ratner:Developer would be paying on property they own, but eventually transfer to property owners. PILOT funds first go to pay off bonds, then eventually to municipalities. If not many lots sold, I’ve seen no discussion of carrying costs of the infrastructure.

Caffry: On revenue side on Page 26, discussion of sale of certain number of homes, prediction of dollars to municipalities? Where it talks about 19 homes and 13 great camps for $35 million.

Ratner: Based on my review, all of developers projections of benefit to communities, based on sale of homes at specific values.

Caffry: Assume selling vacant lots, and not completed homes, is projection of tax revenues valid?

Ratner: No. Developer selling vacant land, not homes. So has no control of value on homes that will be sold. Developer can’t stipulate on how much homes will cost or will be sold for.

Caffry: Looked at architectural standards?

Ratner: Yes.
Caffry: Anything in architectural standards that addresses values of the buildings.

Ratner: Nothing.

Caffry: Anything that addresses size?

Ratner: Yes.

Caffry: If someone bought lot for $100,000 would they have to build half million dollar house?

Ratner: No. Believe housing revenues extremely overstated.

Caffry: Any concern about how PILOT will be administered for municipalities?

Ratner: Not clear about relationship of developer and municipalities on who would pay administrative funds for the PILOTs (payment in lieu of taxes). Not clear if developer will be paying administrative costs (of the PILOTs) or the municipality.

Caffry: Aware of any similar arrangement for similar projects?

Ratner: No, I am not.

Caffry: Familiar with David Norden’s testimony. Projected possible range of ski ticket sales of 500,000 skier visits.

Tom U: object…it’s inappropriate.

Caffry: Martin’s documents predict certain tax revenues…approximately $38 million in sales based on completed homes.
If sales only $5 million per year. Effect revenue?

Ratner: Yes…significantly less, depending on phase of project and where they were. Would effect municipality’s ability to provide services. If PILOTs reduced…

Electricity went out for a second.

Caffry: Rephrase question after power outage. Believe application predicts sales of $38 million per year of homes. If we were to assume that rate of sales was $5 million per year instead. Effect taxes or PILOT payments?

Ratner: Very well could. Would effect amount of money that would be collected. Residual to municipalities would be smaller (after bond payments).

Caffry: Refer to pre-file testimony of Scott Brandi (president of Ski Areas of New York). Do you express concern that service demand is based on peak demand for skiing, rather than average demand.

Ratner: Brandi says lodging must be quality and quantity. Supports my arguments.
Town and village need to be prepared to provide various types of services, based on use levels. When 50,000 or 100,000 more people here on a weekend than applicant predicts, dramatically effect community’s ability to provide services.

Ratner: I’m familiar with Hudson Group report.

Caffry: Find anything there that contradicts your testimony.

Ratner: No.

Caffry: I reserve right to redirect.

Judge: time for parties to cross exam this witness.
Town, applicant, David Gibson for Adirondack Wild, Dr. Phyllis Thompson and APA staff all indicated they had questions of the witness, Shanna (pronounced Shauna) Ratner.

Tom Ulasewicz, attorney for the applicant: Your pre-file testimony your last visit 2007?
Ratner: Yes. Never been to Big Tupper Ski Area. Mostly driven through Tupper Lake. Only projects were for the ANCA, looking at hardwoods industry, and for Town of Franklin. Never been a consultant on any project before APA. Have for DEC. Testified at SEQR hearings. No one assisted me in my pre-file testimony, except staff.

TU: Adirondack Council a client?

Ratner: Yes. We did a project a long time ago…looked at three different communities including Keeseville. We’ve done work with the APA over the years…mostly presented at forums they had in late 1990s. We’ve been asked to respond to resort projects…Stratton, Killington, Stowe. Have worked to give economic development opinion on these projects.

TU: Didn’t read section on economic development in APA guidelines for new projects?
Ratner: Did not…beyond the scope of my testimony.

Caffry: Object. Not engaged to express legal opinion on APA guidelines.

TU: Did you know publication forms the basis of application info that APA staff requires?

Caffry: Object…beyond scope of her redirect.

TU: Asking this woman if aware she is aware of source of that info.

Ratner: Yes. Aware document is basis?
TU: Yet you didn’t read?
Ratner: Beyond what I was asked to do.

TU: Aware APA issued completion notice regarding all subject matter?

Ratner: No I’m not.

TU: Did develop own independent projections?

Ratner: NO.

TU: Looked at local costs?

Ratner: No.

TU: Did look at costs of services to the community?

Ratner: I did not.

TU: Did you prepare any independent estimates on economic benefits of having project versus not having project?

Ratner: I did not. I also did not develop any economic multipliers.

TU: What you have done…you read section of application. Telephoned several people and reviewed research.

Ratner: Yes and relied on years of professional experience.

TU: You critiqued work of consultants but performed no research of your own?

Ratner: Yes.

TU: Read Hudson Group report that supports applicant’s waste water plan?

Ratner: Would not say it supports.

TU: Read any of Camoin Associates’ development plans for community?

Ratner: No.

TU: Not aware of benefits to community listed in Camoin study of this project?

Caffry: Yes…not part of record.

TU: Know Camoin impact of this project?

Ratner: I do not.

TU: Refer to waste water discussion in your pre-file testimony. Have read SPEDES (spelling) by DEC in application?

Ratner: I have not.

TU: Aware that village waste water treatment is primary, secondary or tertiary?

Ratner: Believe secondary, but not sure.

TU: Do you know proposed plant is primary, secondary or tertiary? Even talk with Bob Fuller?

Ratner: Believe tertiary. Never met Bob Fuller, or talked to him, but believe he is the manager of the water and sewer department.

TU: You feel various possibilities village may incur liabilities associated with the waste water treatment plant. What promoted you to compare a century old line in another community with resort’s application?

Ratner: Eventually systems fail. As sewer laterals fail more and more responsibility falling on communities.

TU: Do know if problems was trunk line or laterals?

Ratner: Don’t know. She admitted she didn’t know water and sewer laterals fall under state building code, but said assumed so.

TU: Article about Nevada. Never mention word “laterals?”

Ratner: Didn’t know.

TU: Hold yourself out as expert, aware of any municipality in New York that installs laterals for homeowners?

Ratner: Not aware.

TU: You were asked what problems could occur as unplanned liabilities? Maintenance for portion of common service road falls to HOA. Aware no sewer line associated with project will be maintained by road association?

Ratner: Will find the information.
TU: Ask that be done by the close of today.

TU: Other things that could happen, if fewer homes built village will be forced to maintain infrastructure that offers excess capacity. When wrote pre-file, award municipality required applicant to build pump station?

Ratner: Learned later.

TU: Didn’t change?

TU: Did not know that sewer district No. 23 was designed to serve all residents, even if project never built.?

Ratner: Assume it would. (pressed by TU). Said did not know.

TU: Aren’t carrying costs applicable to every property owner in the town?

Ratner: Don’t know.

TU: If you calculated the real property tax on $750,000 home in Tupper Lake, what would number be?

Ratner: Not off top of my head.

TU: Aware that Tupper Lake 2011 equalization rate is 100%?

Ratner: Aware it changed. I used the figure used by applicant in application.
Information was not available to me when did pre-file.

TU: Average annual total carrying costs more than $24,000. Carrying fees of every owner will exceed annual salary of people who work at the resort?

Ratner: Suggest significant difference in amounts. People who can afford to pay $24,000 in carrying costs are in different socio-economic class than average residents of Adirondack Park. Over time, in other communities, what has happened to native residents have found people move in require more services they felt was necessary, and so pushed up cost of living. It happened in Stowe, Stratton and Killington. Lots of battles over schooling, what is offered locally in shops. Rely on our personal research to say that.,

TU: Going to page 31 of pre-file testimony, saying $12,000 is per capita income in Franklin County?

Ratner: $24,000 is for each adult in a two-family unit. Wage numbers calculated for certain size families.
Web site that calculates family incomes in various parts of county, by a researcher who works nationwide.

TU: You indicate average annual wage for a full-time equivalent job (in the resort) in operations will be $19,200- citing the application?
Ratner: Yes.
TU: Applicant’s 2010 update, does not limit these jobs to operations?

Ratner: My understanding that was figure in application. Quoting economic impact analysis, shows 524 jobs. At completion, 236 full-time equivalent…listed various types of jobs. All, in my opinion, are operational

TU: That’s what I wanted you to say…so not limited to operations?

Ratner: As distinguished from construction.

TU: In applicant statement, refers to 102 full-time equivalent jobs. Agree seasonable and part-time positions will make up majority of jobs at resort?

Ratner: Yes.

TU: When speak of livable wage for TL and FC, what speaking of?

Ratner: From application.

TU: Know what year our data was based on?

Ratner: 2005, it looks like.

TU: When listen to your rebuttal testimony, all of your assumptions based on project not working as proposed by applicant. If does work, then assumptions don’t hold?

Ratner: Not so…effects of peak population not covered. Still issues of who is going to take over services. That hasn’t been costed out. Still questions about breaking even point of the resort. Still questions of actual sales levels. Serious issues regarding employment and who gets those jobs. Even if resort gets built out in manner outlined, many of my issues would be areas of concern.

TU: Even if project “works,” in your words, village would take over plant.

Ratner: In Hudson Report, village has no willingness to take over plant.

TU: Any idea what would happen to that on-site treatment plant?

Ratner: No.

TU: You testified earlier. When look at peak period and yield. More expenditures, more revenues, more sales tax, more jobs…what happens?

Ratner: Depends where those numbers accrue. If more sales tax, funds increase to county. Would those revenues be significant to cover extra expenses at peak, I don’t know.

TU: If have peak period showing all sorts of increased activity?

Ratner: Full range of costs has not been considered. Needs to be considered and has not been in any material I’ve seen.

TU: In peak season, wouldn’t have increased jobs and increased revenues in this town?

Ratner: In many communities, extra costs incurred by communities out weigh increased spending in community. For example Stratton, Placid, Potsdam…with respect to working people there. Work done five to eight years ago.

Paul VanCott (attorney for APA): Outside contractor from outside area. Surprised to know many qualified contractors in tri-lakes, including those building Adirondack Great Camps?

Ratner: My assumption.

Van Cott: Knowing that many contractors locally, wouldn’t they be hired?

Ratner: Depends on who buys property. Lot of decisions beyond scope of developer. Hard to discern how much developer would contract or private lot owners. Because built to energy conservation standards, special set of skills to do that. Even though maybe lots of contractors able to build high end homes.

VanCott: Any conditions that commissioners might impose to increase likelihood local contractors would be used?

Ratner: Interesting idea. For large projects,it’s in everyone’s best interests to bring in large, qualified contractor. If developer going to build individual homes, may overwhelm local contractors and their supply. Agency has to think about who makes what decisions, and how you would influence the homeowner to move that way. It would difficult to impose that type of condition. Could develop way to introduce local contractors to lot owners.

If only dealing with local contractors, could interfere with desire to build at desired rate.

Dave Gibson (Adirondack Wild- preservationist group): Wondering on page 3 of pre-filed testimony, did you review reports of Hudson Group in years 2006-07?

Ratner: Did somewhat.

Gibson: On page 16, method used for job creation not convincing. Is that standard methodology applicant used?

Ratner: Never seen that method used, re: job creation, etc.

Gibson: You address firm you know of with extensive construction. Do you know them?

Ratner: Know of them. Don’t know of exact hiring practices. We know that in commercial development, companies like this exceed, because used well-known employees and craftsmen. Don’t use a lot of seasonal people without experience.

Gibson: Cost of providing services. State town and village must be prepared to handle water, sewer, safety, electricity demands, etc. Why electricity?

Ratner: If a lot of people here, more power will be drawn down. Power demand is extensive. Electric department counting on lot of energy savings devises, but doesn’t include use by motels, shops, etc. During peak demand, marginal cost of that hour much more than base amounts.

Phyllis Thompson: Have 3,400 feet contiguous to ACR. Recap please the construction companies in the area. In your experience, how common for construction companies from outside to use local labor?

Ratner: Fairly uncommon, even when communities put in that condition. Outside contractors often sidestep those requirements. Many subs not bonded or adequately insured to fit into large scale developments.

Thompson: About carrying costs paid by everyone. About $14 to $15. Somewhere around $23,000. PILOT do not include mortgage?

Ratner: Yes.

Thompson: Looking for buys who could afford carrying costs of $2,000 per month plus mortgage payment?

Ratner: Yes.

Kirk Gagnier (attorney for town board and town and village planning board)
Page 7 of your pre-file. You discussed municipalities end up sharing costs of services. No mandate town must pay for things.

Ratner: No but over time may.

Kirk: Regarding installation of infrastructure, aware there will be construction monitors?

Ratner: Unclear to me the amount of that activity.

Kirk: If there were inspectors required to monitor, improve that potential condition?

Ratner: My concern is condition of laterals over time, because privately owned. So town or village may eventually have to take over.

Kirk: If monitors used problem would be less?
No commitment the village would have to take over laterals?

Ratner: No.

Kirk: Regarding road maintenance agreement, even if true it required moneys to be set aside, isn’t it similar to sewer district?

Ratner: It is, but same liabilities. If not enough members, potential problems. Would be choice for municipalities to step in.

Kirk: When looking at example of Nevada city, (she provided a newspaper clipping about problems in that city) did look at districts that were successful?

Ratner: No so much on that article, but on my personal experience. Serious issue.

Kirk: Do you know how many districts in Tupper Lake and their failure rates?

Ratner: Do not know. Assume there’s 23 (based on discussion about sewer district 23).

Kirk: When look at districts and unanticipated costs, aware there is condition that village service these districts?

Ratner: Not aware.

Kirk: Could agreements be drafted to handle unanticipated costs?

Ratner: Assume there could be.

Kirk: With regard to sewer transportation corporation, aware DEC oversees?

Ratner: Yes.

Kirk: When talk about California example, is there the same oversight, as DEC?

Ratner: Assume there is.

Kirk: Why not look at New York transportation corporations?

Ratner: Tried to. Once licensed not much information on them.

Kirk: Aware they exist, but not feasible to look at?

Ratner: Yes.

Kirk: With regards to page 10, dealing with concern whether municipality would take over transportation corp., aware would be monitoring of construction?

Ratner: From Hudson Group report, couldn’t determine who would supervisor, town or village or who.

Kirk: Talking about roads. On page 12, your testimony predicated on certain measurements of roads?

Ratner: From application.

Kirk: If homeowner defaults, county would be liable. Talking about private roads owned by HOA?
Ratner: Yes.

Kirk: Private roads not responsibility of municipality?

Ratner: No liability unless town chooses to adopt it.

Kirk: Private roads in application they will not be offered for dedication.

Ratner: Yes.

Kirk: Some roads can be dedicated in phases. Aware of that?

Ratner: I’m not. Agree a road could be dedicated as seasonal.

Kirk: If look at analysis of road, constructed in phases, risk would go done?

Ratner: It might. Depends on number of purchases along road that would cover cost of construction and maintenance and that agency maintains its vibrancy. If doesn’t happen town may have to step in. The ones that are private, the same situation could appear- if not being maintained. Town may or may not decide to take over to improve.

Kirk: But town decision?

Ratner: Yes.

Kirk: There is discussion about private roads being dedicated by town. Page 13 line 8, if condition of private road permitted to degrade, town may step in, since private road can not revert to town road, do you wish to change your testimony?

Caffry: Object.

Kirk: If road never been dedicated to town not town road?

Ratner: yes.

Kirk: Town never dedicated road cannot revert to town ownership?

Ratner: Not necessarily, but town would have to take.

Kirk: On page 25, skier visits Talking about job growth, focus strictly on resort?

Ratner: Don’t remember addressing job growth.

Kirk: Talking about peak visits and visitors to the area, analysis involve spill over into business districts?

Ratner: They do not.

Kirk: If development at mountain, will have impact on village?

Ratner: Yes, it could. But also factored in would be issues concerning populations at peak.

Kirk: Discuss IDA bonding for infrastructure. Concern infrastructure will be bonded and lot sales will support bond payment?

Ratner: Concern is there are costs developer will have to assume if amenities are to be offered prior to lot sales. If in fact the ski area would come on line in phase 1, there will not be presumably enough resort users to underwrite cost of that facility. Not clear where dollars will come from to maintain facility over long enough period of time to induce lot sales. Haven ‘t seen those costs assessed.

Kirk: IDA amount tied to assessment of those properties.

Ratner: Value of properties used in application is with homes on them.
Developer has wisely chosen to do project in phases. At any given phase, infrastructure must go in before lot sales. So will also be times when services underused.

Kirk: Familiar with subdivisions in Tupper Lake?

Ratner: I’m not.

Kirk: They had 20+ build outs but provide significant tax base to Tupper Lake.

Ratner: Didn’t know. Would like to know when constructed.

Kirk: When preparing testimony, talk to anyone here?

Ratner: No.

Kirk Gagnier finished.

Kevin Jones questions witness.

Kevin: About roads. Would interests of taxpayers better protected if roads not turned over until project completed?

Ratner: Depends, not necessarily.

Kevin: Recommend conditions upon condition of any road at dedication?

Ratner: Yes. Recommend municipality give oversight at time of construction.

Kevin: Would it effect whole PILOT project if there were to be reassessments during PILOT periods, where properties in PILOT not subject to reassessment.

Ratner: As understand, tax rate for PILOTs will fluctuate as tax rate fluctuates. Would there be a disproportionate impact if town properties reassessed and PILOTs not? Depends.

Kevin: Say size of project was to double. Would that shift onus to other properties.

Ratner: If town grows and tax rate possibility drops, share of money from PILOTs would also decrease.

Kevin: Concerning electric rates. If project drives electric use in community up to point we have to buy nuclear rates, effect?

Ratner: Would want to research.

Kevn: In bidding work, would large contractor have bidding advantage?

Ratner: Potentially yes, since set up to build both commercial and residential.

Kevin: If project successful, contention no pressure on village pressure prices. Expect that to change?

Ratner: Not sure at end of day would be for either one. More people coming here and living here during construction period (up to 15 years) so likely to be more pressure on existing housing stock.

Kevin Jones: Expect lot of seasonal part-time jobs. What effect on housing prices?

Ratner: Those people will need a place to live. Desire to rehab enough housing stock to house that work force.

Kevin: Lake Placid becoming very expensive for workers to live. Would that effect your analysis.

Ratner: Wouldn’t surprise me…expect to see that situation continued.

Redirect by John Caffry (Protect the Adirondacks): like opportunity to clear up some of the testimony that came from questions from cross-examiners.

Caffry: TU asked if you have been to Big Tupper? Did it matter to your set of issues?

Ratner: It did not.

Caffry: Similar testimony in other types of Vermont resort hearings? Similar to this?

Ratner: Yes.

Caffry: In those hearings testified on issues similar to ours?

Ratner: Yes.

Caffry: Asked about types of clients you have testified for. Chambers? Municipalities?

Ratner: Had chambers as clients. Didn’t testify for. Have for local governments.

Caffry: TU asked about your information sources about economic impacts?

Ratner: Used available research. Would have been expensive to replicate applicant’s analysis.

Caffry: Gave reference to newspaper articles. Those two examples from Nevada and California?

Ratner: Just examples I used.

Caffry: Asked questions about inspections of infrastructure, etc during construction. Possible could be problems of a nature?

Ratner: Most certainly will be.

Caffry: Recall questions about road transportation corporations?

Ratner: Yes. Found material in responses to planning board questions. Correspondence to John Storrin from Kevin Franke of the LA Group.

Caffry: With response to sewer maintenance, sewer line along road would be responsibility of road association?
Document submitted to agency staff an exhibit to Mr. LaLonde’s pre-file testimony.

Caffry: Do you recall TU asking questions about calculations of carrying costs of homeowners and whether or not you had used new assessments and new equalization rate or old one (70%). You used 70% rate because that’s what applicant did?

Ratner: Yes.

Caffry: If you would have had updated material, would that have changed your conclusions?

Ratner: It would not.

Caffry: Asked question from Mr. Gagnier about sewer laterals and would town take over if problems. Said there could be inflow and infiltration problems? Explain?

Ratner: Inflow happens in older pipes as water from outside permitted inside.

Caffry: How effect costs to community?

Ratner: More water there is to be treated, the higher the costs.
Any inflow from any source will effect operation of system, from anywhere.

Caffry: Private roads maintained privately. Public road owned to by town, and resort owners would pay a share of that upkeep.

Caffy: If subdivisions not sold out, who would pick up balance of maintaining road?

Ratner: A share by the town. It’s not clear if the developer would pay for some.

Caffry: If systems fail, are municipalities pressured into taking over?

Ratner: There would be mounting pressure on the community.

Caffry: If assessments lowered, effect ability to pay infrastructure costs?

Ratner: Could.

Parties for Recross: Applicant and town

Tom Ulasewicz: Regarding road association having responsibility for repairing sewer system. Did you review document submitted by Shawn LaLonde about sewer system?

Ratner: Yes.

TU: Aware that sewer line you refer to running down By-Pass Road and having great camp residences, is no longer a proposal?

Ratner: Didn’t know. Know some of great camp lots taken off sewer line.

TU: Documents in record that great camp lots no longer hooked up to trunk line on By-Pass Road. Do you accept that?

Ratner: If you say in record, then I believe you.

TU: Did know APA staff made recommendation to not connect great camp properties?

Ratner:

Caffry: Object. Relevance?

Judge: Why asking this Mr. Ulasewicz?
Application materials will speak for itself.

TU: In Ms. Ratner’s pre-file testimony, states only two great camp lots served by public service. Her testimony addresses question.
What level of expertise do you have in engineering and construction materials.

Ratner: I’m not an engineer, but built my own house and rebuilt my own house. Some familiarity with energy conservation materials.

TU: In your question about the 100 year old pipes, what made of.

Ratner: Assume clay.

Testimony by LA Group and others for the applicant, Preserve Associates.

Terry Elsemore, Jim Martin and Scott Pierce of Delaney Engineering.

Jim Martin: I’m an economic development specialist and planner for the LA Group of Saratoga Springs.

Scott Pierce: estimator for Delaney Group.

Cross examination by Paul VanCott, attorney for APA:
Kevin Jones went ahead of him.

Kevin Jones: Is Delaney Group?

Scott: Out of Gloversville.

Kevin Jones: Recalled in 1980s, audit on Delaney Group, during my time with NYS Dept. of Labor. Today involved in federal issues.
Never been involved in Empire Development project, in interests of full disclosure.

Kevin: To Mr. Pierce, how would company operate?

Scott Pierce: We’d send our supervisors and try to employ local people.. Depends on qualification of local work force how many we can hire. Try to hire local, but can’t always do that.
We bid projects all over the country. If do job in North Carolina, hire most of the people from the area. For this region, would hire people from the Adirondack region. Four-county area perhaps. Have some area employees we use routinely.
Have several hundred employees.

Kevin: (to Terry Elsemore): customers from within five hour drive time. How many outside that drive time.

Terry: Referring to two different groups. For the great camps and because of Saranac Lake Regional Airports, people with means could come from anywhere. For the smaller house purchasers, majority would be from within five hour drive.

Kevin: Why chose five hours drive time.

Terry: Historically. Done 13 of these fractionalized projects. Typically not farther than five hours…lot logical. Many of the people who now frequent the Adirondacks.

Kevin: If any changes in circumstances, say tax policy, that effected folks in Connecticut. or New Jersey, would that effect your analysis?

Terry: Guess depends on severity of change.

Kevin Jones submitted a state tax tribunal decision regarding a couple named Barker about their conditions for paying state income taxes.

TU: Is it in appeal? Object because haven’t had opportunity to read it. Also need to find if under appeal.

Kevin Jones: Don’t know if in appeal process.

Caffry (attorney for Protect the Adirondacks): Sent this out a while ago.

Kevin: Have you seen significant increase in sales recently.

Terry: With Dow coming back, doing reasonable numbers. Buyers still there, just more tentative than were.

Kevin: They will come back?

Terry: Yes. We offer new development sales.

Kevin: What if economic recovery doesn’t happen, or some other spike on horizon. Say a major economic event in Europe.

Terry: This isn’t first economic downturn I’ve seen. Remain optimistic that good developers with good products and good locations, will survive. Generally people who are resort buyers are in top 3% of national income earners.

Kevin: Lot of product on the market right now?

Terry: Second home buyers is a smaller market, than conventional residential buyers.
My belief American public wants to have a vacation home.

Kevin: Continuation of low interest rates. Lot of people buying gold anticipating inflation. Will increased interest rates effect sales?

Terry: Fifty percent of buyers pay cash. Sales in $80,000 to $150,000 range.

Kevin: Many people buy for investment purposes. Would these people be buying for investment purposes? You talk about comprehensive amenity package, one of the things applicant proposes to buy is second-hand ski lift. Are your buyers interested in places with older amenities?
TU: Object…where getting information?

Kevin: Regarding market study, overly optimistic given existing market conditions?

Terry: My position.

Kevin: Have you looked at price points and compared with other resorts in Adirondacks and Vermont?

Terry: Haven’t really looked at.
Think this resort’s success is dependent on location and amenities that will be offered. Adirondacks is the whole key to the thing…that’s the brand.

Kevin: If folks were looking at resorts for purposes of skiing and had opportunity to look at Big Tupper and Stowe, Stratton, etc. If destination wasn’t Adirondacks, would effect their decision?

Terry: Perhaps.

Kevin to Jim Martin: Many of the resorts you’ve worked on are located around major population centers.

Jim Martin: Some of the resorts were in smaller towns, like Johnsburg, NY, which are remote.

Kevin: But closer to major centers.

Kevin: Letter from TLVFD about their ability to provide protection for project. Provide incite about additional equipment?

Jim Martin: Before did update, things were status quo. Not aware of any need to change update when did it.

Kevin: With regard to multiplier, just generally, department of labor publication say multipliers have certain limitations and only measure short-term changes.

Jim Martin: Three parts to establishing multiplier effect: indirect effect, direct effect and induced effect. Only direct effect multiplier was used in our application.

Kevin: If number of contractors available within the Town of Tupper Lake is limited, that’s a factor?

Jim Martin: Yes. A lot of factors go into multiplier effects.

Kevin: If I told you three to four UPS trucks here every day with packages for Tupper Lake people, is that factored in.

Jim Martin: Typically seasonal homeowner will bring basic provisions, but will buy other products here for longer stays. Lot of factors go into local spending and multipliers. More dollars spent here, more multiplier effect grows.

Kevin: Did you review the PILOT materials? Did you review sub-PILOTs (when person sells house to another purchaser).

Jim Martin: Not familiar with sub-PILOTs.

Kevin: Second purchaser. Would his property be PILOT land or non-PILOT land?
If buy property from ACR, is that property in PILOT.

Jim Martin: PILOT is part of the deed. It’s a form of financing.
There is a public benefit aspect to every PILOT.

Kevin: Town going through reassessment. Reassess every five year. How would properties in PILOT be effected.

Jim Martin: They would be reassessed like everything else. Calls for PILOT payment that is consistent with the combined total tax rate of the community.

Kevin: PILOT payments go up and down with assessments and tax rates in town?

Jim: Yes.

Kevin: When doing your analysis, did you take notice of number of products that families here buy out of the community?

Jim: No.

Kevin: To respect it occurs, would limit multiplier?

Jim Martin: Yes.

Kevin: If because of economic conditions, sales of properties had to be discounted. That would effect your analysis?

Jim Martin: yes.

No more questions.

Next cross-examiner: Paul VanCott:
Regarding fiscal and economic analysis. Start in summary. Explain 1b: PILOT agreement essential to project and marketability of lots and viability of ski center. Would it be reasonable for the APA to impose condition that IDA first approve project before project can begin.

TU: Object.
Asking them to base testimony…..

VanCott: Application states PILOT is critical to project completion.

TU: IDA process is independent of APA jurisdiction.

Jim Martin: Based on analysis performed, stand by statement of letter B.

VanCott: In draft permit we speak to need for permission from other state agencies.

Off record: TU: IDA process cannot go forward without agency permit.

Attorney Bob Sweeney for the ACR: Position you are proposing is contrary to everything we’re doing. Bond resolution only comes after public hearing

Back on record:

Paul VanCott: Explain basis for statement in report.

Jim Martin: Results shown are on basis of assumptions made. PILOT agreement was essential!

Paul VanCott: When first bond issuance after permit approval?

Jim Martin: Table in application. Series of three bond issues, in keeping with incremental nature of project.

Paul VanCott: Does sponsor plan to sell any lots before bonding?

Martin: Assume sales begin on year No. 1 and go from there.

VanCott: If necessary infrastructure of neighborhood built with available funds, would houses be part of PILOT.

Martin: Don’t believe so…but don’t feel qualified to answer.

VanCott: Anticipated benefit to local contractors in Ms. Ratner’s testimony? Do you recall?

Martin: Yes.

VanCott: For 216 private family units, including great camps, will developer build?

Martin: My analysis constructed with construction done by applicant. Substantial part of project is residential construction cost. Half of that is labor. Vast majority of construction of project is in residential building and don’t see why local firms can’t tackle lion’s share of that.

VanCott: Year one proposing how many?

Jim Martin: Steve Erman wanted to see year by year incremental effect on housing progress. That was reason for break downs on year to year basis.

VanCott: Ability for local contractors to meet need, have same faith in them?

Jim Martin: I do.

VanCott: Any ideas of how we can insure local contractors used?

Martin: I’m not a labor recruitment person. When look at local unemployment numbers. Consistently one of the highest areas in New York State in all segments of the work force. Correspondingly see concentration among construction workers…so healthy pool of workers to draw on.

VanCott: Understand through application’s fiscal report, applicant’s commitment to insure local workers benefit. One of the things APA trying to do with conditions, if have any ideas, appreciate hearing them. Note that in year one, three in Sugarloaf North…supposed to be served by community waste water plant. Go to another table and see waste water treatment proposed for year No. 3. Is this just an error?

Jim Martin: Houses would follow wastewater treatment plant construction.
VanCott: Lake Simond View. In year one suggests $259,000 on sanitary sewer infrastructure. Sixteen single family houses built that phase. Does that sewer expenditure take into account the pump station, that’s not clear to staff? What is total estimated cost of sewer pump station?

Martin: $200,000 for each one.
Estimates done in late 2009 and 2010.

VanCott: Fiscal report page 20. “Center piece of resort will be reestablishment of Big Tupper Ski Area- a primary goal of the community.’

VanCott: Real investment in the ski slope begin in year 3.
In year one sponsors proposes to spend $1.5 million in marina.

Martin: Marina’s condition poor. Ski area is partially operational.

VanCott: Possibly address some ski improvements earlier than year 3.

Martin: May have changed.

VanCott: Reason for holding off on ski area repair is to wait until some revenue from lot sales.

Martin: yes.
VanCott: First three years focused on Lake Simond View, and eastern great camps, including large lots. So idea is to turn over proceeds from some of these would be turned over to reconstruction of ski area.

Martin: I believe that to be the case.
VanCott: Are these reasonable projections of sales in first three years.

Terry Elsemore: Weed out higher end. Going to people who want to look at great camp, but not want to put that kind of money in it.

VanCott: Makes sense that people going to be spending this level of money, will expect more than a promise.

Terry: Great camps will be more self-contained on separate sites.

VanCott: Because counting on this working capital, if sales don’t move at conceptual pace, is it possible timing of construction of amenities may slip as well.

Martin: Not qualified to speak to that. Very strong desire to get ski area improved

VanCott: Project sponsor and agency can’t provide any assurance that ski area will be re-established.

Tom Ulasewicz: Object…in the record that will be open for 50 years.

Martin: Can’t answer that.

VanCott: Have exhibit 82?

Table shows that as part of phase 1, 15 triplex units…not sure what that is. Trying to reconcile that table 2-6 in exhibit in table 85 which talks about conceptual build out in phase 1. Could reconcile?

Jim Martin: Never seen this table before.

VanCott: One question you had, on table 2-4 that follows. Great camp shows, $155,000- when those lots still went to a pump station. How are these figures adjusted, since will no longer feed pump station?

VanCott: Anticipate any cost-sharing agreement with village relating to electrical infrastructure?

Martin: Reviewed Hudson Group report, and am aware of none.

VanCott: Town of Tupper Lake is in charge of road maintenance. Do you have agreement between sponsor and town?

Jim: Not to my knowledge.

VanCott: Any future one and date?

Jim: Not aware of date.

VanCott: Aware of any agreement with village about water agreements?

VanCott: Why aren’t sewer district revenues not included in this table? May have covered this issue.

Martin: Revenues for sewer are shown in chart.

VanCott: Throughout application, sponsor talks about infrastructure installed as needed. Is PILOT project flexible enough to accommodate?

Martin: Yes.

Adjourn.

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