By Rebecca Martin
In May, there was a significant Kingston City School District Board of Education and school budget vote. In what was described as a referendum on the Kingstonian PILOT the turnout – nearly four times the number of what is typical from past years – overwhelmingly elected incumbents Jim Shaughnessy, Robin Jacobowitz and Herb Lamb who beat out candidates Milgrim and Branford.
Several days later during a regular monthly meeting by the Kingston Local Development Corporation (KLDC) the board continued to consider a transfer of title of 21 N. Front Street to the Kingstonian developers for a parking garage. It is now one of the final critical decisions to be made before the Kingstonian project as planned may proceed.
It might have seemed to the city that the KLDC handling a transfer to the Kingstonian project developers to be the most streamlined approach. However, with known questions and concerns as to how the Request For Qualifications process was handled, if the KLDC were to proceed and the process was indeed flawed, could the board be at risk for charges that its members acted in bad faith?
Article IX: No Officer, Director, or Member of the Corporation shall be personally liable … for any of his acts, actions or omissions either to the Corporation or anyone else in the absence of bad faith or fraud.
That is perhaps why the KLDC requested an outside lawyer to review the 21 N. Front street transfer. After a selection process, Harris Beech was selected to advise the KLDC on its transfer of 21 N. Front Street. Bob Ryan from the firm was in attendance at the May meeting.
What follows is a loose transcription of the May KLDC meeting. Video is available by visiting the City of Kingston’s YOUTUBE channel.
Mayor Noble, who serves as the chair of the board of the KLDC, introduced attorney Ryan as having, “been able to look at all of the documents, policies and procedures” in order to provide some initial thoughts on the transfer.
Ryan’s recommendation for the city owned parcel was to create a three-way land development agreement between the city, the KLDC and the developer. This agreement would lay out and set forth all the terms and conditions for the transfer of the property as well as the development once that agreement was negotiated and developed. “Obviously we would come before the board with an authorizing resolution to consider in accepting the property and executing the land development agreement as well as make determinations that would be necessary under the Public Authority Accountability Act in addition.”
Once the land development agreement was authorized then the board could proceed.
“Why would a development agreement with anyone come before a discussion and a decision on whether or not to even accept the property into the KLDC?” asked Board member Hayes Clement.
“Because if you don’t like the terms and conditions you wouldn’t accept the property. I wouldn’t recommend that you accept the property without knowing the terms and conditions of the disposition of that property and the development of that property…” Ryan said to describe the KLDC as being implemented to be used as the agency to best advance the city’s project.
“When the Common Council approved to turn the land over to the KLDC was it to be used for a specific development?” Clement continued.
“It has a specific purpose in the city’s resolution to be used for public parking and a park…We would start by drafting the land development agreement and try to work with all the parties to come up with an agreement that is acceptable to all parties that would be reviewed by the board. If acceptable then the agreement would be authorized and take place prior to a fee title being transferred from the city to the KLDC. Once that agreement is developed and all parties are in agreement, the board would approve to execute it and issue a 90-day notice under the Public Authority Accountability Act. At which point we can work on the actual transfer of title from the city to the KLDC. The subsequent step would be transferring fee title from the KLDC to the developer pursuant to this land development agreement.”
Ryan recommend an appraisal of the property as a first step to be placed in the file of the disposition and also, because under the land development agreement there might be additional steps required by the Public Authority Accountability Act.
“Have you seen or personally had all the contracts that originated with the city and the developer starting from the Request For Qualifications (RFQ) to know that everything is in order?” asked board member Glen Fitzerald.
“I believe I’ve seen everything.” said Ryan. “There may be stuff that I have not, but I do have the RFQ and the agreements going back a number of years.”
“The answer seems a little vague,” Fitzgerald said. “There’s been quite a bit of reporting that some contracts aren’t available or haven’t been seen and so our question is we don’t want to transfer something or get involved in something that is not precise right from being the initial RFQ. I would say that if you’ve seen it and had it in your hand it would be part of your file.”
Ryan assured Glen that by the time that a resolution is put before the board that he would ensure that he would have seen the entire record and would provide an opinion as to “the sufficiency of what took place”.
The board agreed to select an appraiser located out of the area. Board member Paul Casciaro asked whether the appraiser would take into account the value of the property at the time the RFQ was initiated, as in today’s market, it would likely be valued at ten times more than it was back then. Ryan answered that the original value of the property might not have been originally based on its highest value but rather on other goals that could take precedent such as parking. The appraisal that the KLDC would ask for of 21 N. Front Street would therefore reflect the fair market value at the current time it is transferred. Board member Feeney reminded the KLDC that it was not involved at that time.
It is significant to remind readers at this point that in the developer’s original application, the KLDC was not listed as an involved agency. The transfer of lands and Fair Street Extension was to all be handled by the Kingston Common Council. During the May Board of Education vote, the public sent a clear message that it understood the devastating impacts the Kingstonian PILOT could have on Kingston’s school budget. With nearly all of the Kingston Common Council members voting in favor of the Kingstonian PILOT last year, they are likely heaving a sigh of relief that they are not embroiled in negotiating more public assets during this years election cycle. Hopefully, the public will not forget the council’s involvement in the PILOT approval. The same is true for David Donaldson who is facing a primary for his seat (District 6) on the Ulster County Legislature on June 22 and who championed the PILOT process from start to finish.
Toward the end of the meeting, board member Miles Crettian asked Ryan, “Is it an issue that the original RFQ from 2016 was not and could not be awarded to the current Kingstonian developers (although the transfer was to JM Development Group, Brad Jordan’s Herzog Supply Co. was a partner and at the time served also served as a member of the City of Kingston’s KLDC and police commission) and in terms of the KLDC’s disposition, how can it know it is following the guidelines laid out in that RFQ if the original recipient of the RFQ was another entity which is no longer a party to this process?”
“We can certainly discuss these issues…and into the possible ramifications…but I’d prefer to do that in a non-public attorney/client privilege situation.” said Ryan.
The next KLDC virtual meeting is on Thursday, June 17 at 8:00am. WATCH on the City of Kingston’s YouTube channel or call in to listen:
Dial In: 1-646-558-8656
Meeting ID: 870 4145 8548
READ Hudson Valley Vindicator: “Kingstonian Saga Continues. Are KLDC Members Liable if They Gift Land in Bad Faith?”