You really have to look at the big picture. The owner of that building is probably not making any money right now ... so it isn't like they bilked the system. At least that building looks much nicer now than it did before, and will eventually get a tenant to fill it out. And I don't know where the parking for the apartments will be, but Penn Yan will definitely benefit from having old, empty, run down warehouses re-modeled and turned into nicer apartments. I think it's great that PY is trying to develop its downtown and maintain its "small town" culture. Not sure why you have an issue with turning warehouses that are an eyesore and are falling apart into nice apartments ... long-term you have to think that helps the tax base for the village and county and eventually the money "given away" will come back into the pockets of the local government. Not all projects will succeed but without stimulation things will just keep falling apart?

I have no problem with "high end" apartments coming from a remodeled warehouse. I also understand the purpose of "pilots". I do have a problem with "pilots" being handed out like candy to developers. If the overall picture screams that the development needs help to make it a worthwhile investment than its a good thing.
If the bottom line is they will make money on their investment after 15-20 years then the government grant should suffice. They shouldn't be getting an instant or short trerm profit from the project. Real estate is suppose to be a long term investment.