State of the City: Economic Challenges Among Developmental Progress

Mayor Mary Foster gave a lengthy State of the City address at the start of the City Council meeting Monday night in which she addressed the economy, finances and development of the city. Foster said that while business and development is progressing, the city is heavily burdened by unexpected rises in health care, workers compensation and pension costs. You can watch the full state of the city address on the city website here, read it by clicking on the PDF attached to this article and read our catagorized summary below. 

Economy

Peekskill made economic progress through 2011 and that trend has continued into 2012 as business owners are continuing to contact the city’s economic development office with interest, Foster said. She mentioned building permits for Route 202, Lincoln Terrace and Pataki farms.

Other projects mentioned:

-Holidy Inn Express: Foster said the owner of the hotel, to be built at Louisa and John Walsh Blvd. “finally” has “serious financing” from a bank that he hopes to wrap up this summer. “We thank the entrepreneur for his persistence,” Foster said of the owner’s three years of fighting for financing, which became hard to get after the economy collapsed.

-Sales tax revenues, a major non-property tax revenue for the city, are have been increasing since the end of 2010 and continue to increase. Foster said this is 

- Building Renovations: $2.3 million worth of downtown building renovations have been completed through the use of Main Street and city grants. 41 commercial and tenant units have been created and/or renovated.

-Private redevelopment: $2 million of private business renovations have been complete or are in development. Foster mentioned Kurzhals, the Standard House and Myers building, where the Peekskill Brewery will move.

“We continue to see millions of dollars to be invested in city in tough economic climate,” Foster said.

Other business expansions include Bertoline and Sons, White Plains Linen and Northeast Appliances.

-Downtown Survey: The downtown economic development survey and strategy was completed in 2011. Foster mentioned new leadership at the Peekskill BID, the Paramount and the re-formed Peekskill Arts Council as organizations. Those groups, by collaborating with the Hudson Valley Chamber of Commerce and the Economic Development office, will help businesses and commerce.

-Stalled Projects: “High unemployment and reduced earnings and savings have stalled some projects and we hope to see them get back on track this year,” Foster said.

F Sharp Music Hall is 80 percent complete, she said. “It is being funded by the business owner’s personal savings and that has been hard for him to finish,” she said.

Other properties Foster said she hopes to see progress with this year are: the mixed-use residential and commercial development on city owned land and land acquired by Ginsberg Development, 9 Corporate Drive, Main Street Commons and 1 Park Place. 

Waterfront development

-Visitor’s Center and Plaza will be out to bid after Labor Day, Foster said.

-Peekskill Landing bids are due back April 11

-Riverfront Green Construction and Design are being reviewed by the state and the Army Corps of engineers and the city expects to put the project out to bid by the winter.

-The city-owned 25 Acres on Lower South Street and Louisa Street have attracted three significant developer firms, Foster said. The developer designated will be based on their development and retail expertise.

“It is critical redevelopment for the city that will create employment opportunities, tax revenue and promote the economy and a regional destination. This is really a once in a lifetime opportunity for the city to create a destination commercial retail and technology district. One that is symbiotic with the downtown that builds on arts as commerce and brings unique experience to residents, visitors and employees in the district.”

Other projects include neighborhood center plaza, Route 6 streetscapes and safety improvements, historic lights and street lighting master plan, central firehouse.

The mayor identified five neighborhoods that are part of the city’s plan to upgrade. Those neighborhoods are Monument Park, Washington Street, the 202 corridors, the South Street exedra corridor and North Division Street/Oregon Road corridor.

Foster also mentioned a Charles Point development and Blue Plan Commission to promote water tourism and sports.

“Commerce, Tourism, Culture, Technology, Arts ----these are the 5 fingers for Peekskill’s economic strategy as we move vibrant growth throughout the city” Foster said.

City Services

The mayor thanked city workers and said the city will continue to update computer software and equipment to become more efficient. Foster listed the city’s new water filtration system as a positive project that has allowed the city to filter its own water and sell it to its neighbors. She also acknowledged that infrastructure issues are a main problem for the city. The mayor said storm water and sewers are being mapped for areas of consistent problems.  Pipe installations and other work is being done to improve storm water issues.

Sidewalks: The mayor acknowledged that the city law that requires property owners to maintain their sidewalks abutting private property have become “controversial” and said that the city’s codes comply with state laws. She also mentioned the to help residents with lower incomes maintain their sidewalks.

Finances

The Mayor provided a detailed explanation of the financial issues that the city faces.

Workers compensation claims, insurance premiums and health care premiums cost the city millions and have increased for 2012.

“Our focus on finances needs to remain on long term issues that drain the city’s budget,” she said of these costs.

For 2012 pension, health care and workers compensation, represent more than 10 percent of the city’s whole budget, the Mayor said.

She also said that union contracts with the police, fire and blue and white collar worker bargaining units are currently open and will cost the city money. The city faces $250,000 in workers compensation claims as well.

The city will need to use $625,000 of the fund balanced carried over from previous years, in addition to another $375,00 of the balance in order to balance the 2011 budget due to the rising costs.

“Although there are signs of improved revenue forecast for 2012, union contract settlements will obliterate those gains,” Foster said.

The city is in the process of colleting back taxes from property owners and has collected $875,000 since 2005. It expects to collect another $1.5 million through installment programs. Foster said that several properties will be acquired by the city, and they will sell those properties. However, tax certioraris cost the city about $1.5 million a year.

The mayor concluded: "Peekskill continues to prosper as a city; we have made great strides in improving the quality of life for our residents and maintaining fiscal responsibility. However, we will not sacrifice our residents’ safety or the city’s economic development efforts to balance our annual budgets. Both are necessary for Peekskill’s long term prosperity. Our goals are to live within our means while growing economic opportunities for businesses and our residents."

What do you think of the state of the city?