Living It Up. . .on our dime
A.G. Spanos completed the Alexander at Patroon Creek, a luxury housing complex in the city of Albany with the help of a 10-year Empire Zone tax break granted in 2010. Apartments at the complex rent for $2,300 a month rent, have amenities like a clubhouse, indoor and outdoor pools and a fitness center, and boast tenants like Lt. Gov. Robert Duffy. The California developer inaugurated its first project in the Northeast by building with non-union, out-of-state workers.
With the apartments mostly rented and the developer looking to sell, the developer recently challenged its property tax assessment to get an even bigger property tax break. When that failed, A.G. Spanos attempted to get IDA tax breaks likely worth over $9 million to reduce its tax levy, even though the project was complete and the corporation didn’t offer to create any new jobs in return.
A.G. Spanos will already see at least $11 million in tax savings through the Empire Zone program. One Albany Common Council Member estimated that granting A.G. Spanos a larger IDA subsidy would mean a 15% tax increase on city property owners, just to offset luxury housing tax break. The corporation pitched this deal as a short-term cash influx for the struggling city, but fortunately, the IDA board saw this as the subsidy swindle it was and took a walk on the deal.
Based in Stockton, California, A.G. Spanos Corp. is one of the nation’s largest apartment builders. It’s known as a merchant builder: It takes on the cost and risk of developing properties, and sells them after they are leased. The company was founded by Alex Spanos, owner of the NFL’s San Diego Chargers. The Spanos family was ranked among the 400 wealthiest by Forbes, with an estimated net worth of $1.1 billion in 2010. Even so, Spanos sought hefty public subsidies for a new sports stadium for the Chargers just last year.
Albany City IDA Meeting Minutes and Meeting Materials, Albany City Industrial Development Agency, at http://albanyida.com/meeting-materials/ida/?y=2011
Industrial Development Agencies: Summary of Data, Office of the New York State Comptroller, at http://www.osc.state.ny.us/localgov/datanstat/findata/index_choice.htm
The New Subsidy: Affluent Housing, by the Times Union Editorial Board, the Times Union, July 5, 2011, at http://blog.timesunion.com/opinion/the-new-subsidy-affluent-housing/12745/
Developer Wants Albany to Take Project Off Tax Rolls for 23 Years, by Jordan Carleo-Evangelist, the Times Union, June 30, 2011, at http://www.timesunion.com/default/article/Developer-wants-Albany-to-take-project-off-tax-1446692.php
A.G. Spanos Execs Huddle on New Tax Break Plan for Albany Complex, by Michael DeMasi, The Business Review, August 19, 2011, at http://www.bizjournals.com/albany/print-edition/2011/08/19/ag-spanos-execs-huddle-on-new-tax.html?page=all
Abatement Would Hurt Taxpayers, by Dominick Calsolaro, Common Council Member, the Times Union, July 9, 2011, at http://www.timesunion.com/default/article/Abatement-would-hurt-taxpayers-1458731.php
Albany Tax-Break Request Raises Ire: Upscale complex would be exempt from future tax rolls for cash now, by Jordan Carleo-Evangelist, the Times Union, June 30, 2011, at http://www.timesunion.com/default/article/Albany-tax-break-request-raises-ire-1447975.php
Fact Check: How Wealthy Is the Chargers' Owner? by Keegan Kyle, Voice of San Diego, November 29, 2011, at http://www.voiceofsandiego.org/fact/article_ff3be7aa-1ac1-11e1-985c-001cc4c03286.html
Build a Stadium and Team Will Stay? Nope, by Don Bauder, San Diego Reader, May 2, 2012, at http://www.sandiegoreader.com/news/2012/may/02/citylights1-build-stadium-team-stay/