UCIDA

A public hearing on the abandonment of Fair Street Extension for the Kingstonian Project and Prevailing Wage

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WHAT: Common Council Public Hearing: Abandonment of Fair Street Extension for the Kingstonian Project

WHERE: The meeting is hybrid, to be held at Kingston City Hall at 420 Broadway (council chambers) and on ZOOM

Meeting ID: 814 3291 1874
Passcode: 2crVt5vzOr dial in by phone:
+1 646 558 8656
Meeting ID: 814 3291 1874
Passcode: 57325016

WHEN: Thursday, December 2 at 6:30pm. View the City of Kingston’s FACEBOOK event.

SUGGESTIONS FOR YOUR TESTIMONY: A public hearing seems premature. The city has yet to confirm whether or not Fair Street Extension can be offered for sale before discussing a public bid at fair market value.

By Rebecca Martin

Following an October 14th Common Council Finance and Audit Committee meeting, Kingston lawmakers were poised to approve a plan to abandon and close a portion of Fair Street Extension to through traffic to make way for the Kingstonian proposal, a luxury apartment development in Uptown Kingston, and the centerpiece of Kingston’s Downtown Revitalization Initiative (DRI) that was awarded by former Governor Andrew Cuomo.

Just days before the full council planned to vote, Victoria Polidoro of the law firm Rodenhausen Chale & Polidoro submitted a letter to the city on behalf of her client, a landowner in Uptown Kingston, that said if lawmakers proceeded as planned the “City will not be following the requisite procedure for the closing of a public street and subsequent conveyance of an interest in the former street bed”. That procedure included a public hearing. The firm threatened a temporary restraining order “until all statutory requirements were followed”. 

“The rights of the public in city streets are inalienable, and may only be sold or conveyed in limited circumstances” she wrote. According to Kingston’s city code and NYS general city law, “…to discontinue a City of Kingston Street, the Code first requires the City Planner to establish a list of streets or portions of streets which are no longer used as ‘public thoroughfares’ and are now vacant”, which is not the case for Fair Street Extension. “The Code then directs the circumstances under which these streets are to be offered for sale, with sale as the only provided for manner of conveying or otherwise disposing of a street.”

“There will be a public hearing before a vote”

Although the City code is clear, the differences of opinion about the process steps to abandon a street by the council has been confusing for the public. Early in October, we were told by Council President Andrea Shaut with certainty that, “…there will be a public hearing before a vote” as outlined in the City code.  However, a week later, the Council Finance and Audit Committee members passed a resolution “endorsing a plan to abandon and close a portion of Fair Street Extension to through traffic” without any discussion about the process and no mention of a public hearing. When a constituent followed up, Ward 3 Alderman Rennie Scott Childress (the democratic majority leader and chair of the Finance and Audit Committee) said “…a public hearing would be called for (only) if the City were selling or otherwise disposing of the property”.

Did Kingston’s Corporation Counsel find some clever new hook? Were our council members being placed in a position to defend their decision by saying that the process doesn’t apply to a street if it is being given away?  A local street, like all infrastructure, is a public good built on generations of investment by Kingston families. How could our city be so frivolous?

Prevailing Wage and former Governor Cuomo’s exemption for Downtown Revitalization Initiative projects like the Kingstonian

Although the City of Kingston set the original public hearing to occur on December 9th, without any explanation, it was moved up a week to December 2nd.  This move by corporation counsel was likely made to allow the public hearing and council vote to occur within the same month (as the next full council meeting is on December 7th).  The Historic Landmarks Preservation Commission will also be busy reviewing recent project changes during their December 2nd meeting (the same date and time as the Fair Street Extension public hearing) for an approval, and likely soon. All that’s left is the site plan approval by the Planning Board and variance change by the Zoning Board of Appeals. There is a sense that these approvals are being rushed and out of step, and at the expense of both the public and the process.

In a recent article in the New York State Bar Association “New York to Require Contractors to Pay Prevailing Wages on Certain Private Projects“, they write: “On April 3, 2020, New York lawmakers passed a $177 billion budget bill that significantly expanded the application of prevailing wages on construction projects in the state. While previously the payment of prevailing wages had been reserved for public construction projects only, the new bill expands the prevailing wage requirement to certain private projects for the first time in our state’s history….The law, which becomes effective on January 1, 2022, extends prevailing wages to projects that previously both sides may have viewed as “private,” where total project costs exceed $5,000,000 and where the project receives 30% or more of its total construction project costs from public funds.”

The Kingstonian project costs are well over $5 million and they are also receiving more than 30% of their cost through public funds (consider the DRI funding, grants, PILOTs).  But former Governor Andrew Cuomo slipped in an exemption for construction projects from prevailing wage requirements even if they otherwise met the foregoing criteria. Guess which ones?  “Projects funded by § 16-n of the Urban Development Corporation Act or the Downtown Revitalization Initiative“ making the Kingstonian currently….exempt.

Ironically, during the November Ulster County Industrial Development Agency meeting, Rose Woodworth brought up the new rules for prevailing wage. “…We don’t know the rules because there’s supposed to be a board that was set in place to define it. The prior governor never got that far and the current governor has not gotten that far yet so it’s just a lot up in the air”.

The ball is in Governor Hochul’s court, and Cuomo’s unscrupulous DRI exemption could be struck by the board that she will (or has already) established.

If we are aware of this, then it is without any doubt the City and project developers are too. It is likely motivating them to push hard to get everything in place while they are still exempt. Prevailing wage, if ever applied to the Kingstonian project, would likely make it too expensive to build.

The Ulster County Industrial Development Agency does some “housekeeping” before Kingstonian PILOT vote on January 20.

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By Rebecca Martin

On Wednesday, January 20 at 9:00am, the Ulster County Industrial Development Agency (UCIDA) is poised to vote on the Kingstonian project deviated payment-in-lieu-of-taxes (PILOT), an unprecedented 25-year, $20+ million dollar deferment (and in the school district’s case, a loss) of property tax for luxury housing in the City of Kingston’s historic stockade district.

In July of 2020, the developer publicly unveiled their 100% tax exempt PILOT that at that time was valued at over $30.6 million dollars (that includes the PILOT and other public funding sources) in exchange for a parking garage. Although the developers and members of the Kingston Common Council insisted that there wasn’t any wiggle room to improve the project or PILOT conditions, after much effort and advocacy by the public, the developer added 14 affordable units, a couple of public bathrooms and reduced the amount slightly that is deferred over time.

READ: “The road paved by a $30.6 million dollar Kingstonian PILOT (in exchange for a parking garage): A timeline and next steps in October 2020

The request went out to the three impacted agencies for their consent that included the City of Kingston, Ulster County Legislature and Kingston City School District. Although the City of Kingston (8-0) and the Ulster County Legislature (17-6) approved the PILOT agreement, the school board, which represents 60% of the impacted taxpayers throughout Ulster County, rejected the proposal (6-3).

One of the things that we learned throughout this process were the negative impacts that a PILOT has on school districts. In a recent article called “Strife over tax breaks and tradeoffs: It doesn’t have to be like this” by The Benjamin Center (penned by Robin Jacobowitz with KT Tobin and Josh Simons) the author, a graduate of Colgate University with a BA in Education, a Masters in Education Policy from Harvard University and Doctorate of Philosophy, Education policy, Organization Theory and Qualitative Research from NYU, the Director of Education Programs at The Benjamin Center and an elected trustee of the Kingston City School District Board of Education wrote, “Public schools are dependent on property taxes for the majority of their funding. When an entity does not pay its full share of property taxes, that burden does not go away; unless cuts are made, costs get shifted onto other taxpayers. So when a PILOT is granted to a developer everyone else has to pay more. And even in an instance where a PILOT might contribute more than was being paid by the pre-PILOT property, that property is still not paying its full share.”

THE UCIDA’S CLEVER “HOUSEKEEPING”

Meanwhile, the UCIDA released their AGENDA for next week that revealed more concerns.

There appear to be two different items that can trigger a multi-agency review such as what occurred with the Kingstonian PILOT. The first is a deviation from the Uniform Tax Exemption Policy (UTEP) and the second, the inclusion of housing. Notice that on page 27-28 of the agenda, Resolution No. 1020 changes the housing policy so that the UCIDA doesn’t need all taxing entities’ concurrence.

The UCIDA could perhaps override the other agencies on the deviation. But when they added in the opportunity to fund any housing project in the housing policy last summer, they required agreement of all agencies.

During their recent governance meeting (and two hour executive session) they must have changed the housing policy (again) to have the same language as the UTEP for the PILOT deviation, sneaking it in under the heading “housekeeping” by adding an “F” after the “E” in the Schedule A (see header photo).

Furthermore, the authority for an IDA to even fund housing appears to be a complicated question. The state authorizing legislation for IDAs doesn’t clearly allow IDA support for housing. According to sources, the courts have, over time, considered certain housing projects to qualify if the project “promises employment opportunities and prevents economic deterioration”. Is the UCIDA giving itself the authority to support any housing and does it have the power to do that? Perhaps it is why, in the resolution approving the Kingstonian PILOT, that they do a little dance defining the project as “commercial”.

I guess we’ll have to see what the board members do on Wednesday and when this is over, we hope that our elected officials – with much public pressure – use this most unpleasant experience to deeply scrutinize the UCIDA’s practices.

The UCIDA meets on Wednesday at 9:00am. Please visit their WEBSITE to learn how you can view their meeting and participate.

Will the Ulster County IDA Override the Board of Education’s Vote to Reject the Kingstonian PILOT?

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CALL TO ACTION:  Families who have school age children in the KSCD, as well as Ulster County residents who pay Kingston City school tax (which is 60% of the KSCD population), please CLICK ON THIS LINK to send a letter to support the Board of Education’s decision to reject the Kingstonian’s unprecedented 25-year, $21 + million PILOT and request that the UCIDA follow its own policy requiring the approval of all impacted agencies for a deviated PILOT in order to take any further action. 

By Rebecca Martin

At the December 2, 2020 Kingston City School District’s (KSCD) Board of Education (BOE) meeting, the Board trustees rejected a (revised) unprecedented 25-year, $21 + million dollar Kingstonian PILOT request by a 6-3 vote.  Thoughtful, factual testimony about the “PILOT” (and not the “project,” the completely misleading talking point that some of our elected officials and the developer has been pushing) was provided by trustees Robin Jacobowitz PhD, Cathy Collins PhD, Priscilla Lowe, Herb Lamb, James Shaugnessy and James Michael.

Why is this significant?

The Board of Education is one of three taxing agencies – which represent tens of thousands of taxpayers in Ulster County – which would be impacted by the Kingstonian developer’s request for an unprecedented 25-year payment-in-lieu-of-taxes (PILOT) worth more than $21 million dollars for a parking garage (located in an opportunity zone no less) that, based on Kingston’s zoning code, would mainly provide parking for the developer’s high end housing project and luxury boutique hotel. The other two agencies are the Ulster County Legislature, which passed a newly crafted PILOT agreement by a vote of 17-6 (The Ulster County Executive branch commissioned a report by the National Development Council (NDC), who tweaked the PILOT in order to sweeten the pot for the school board) and the City of Kingston Common Council (which passed the original PILOT agreement, that would have proven to be even more harmful to the Kingston City School District, unanimously). 

We’ve learned a lot over these past months about the concerning use of PILOTs in Ulster County and the negative impacts that they have on annual school budgets that must come under the tax levy limit.  “Kingston City School District is funded by property taxes and state aid,” said James Shaugnessy, president of the Board of Education. “Property taxes are levied against the Full Taxable Value of nonexempt real estate…and if the (Kingstonian) project is subject to a PILOT agreement, then the new taxable value is never included.”

The Ulster County Industrial Development Agency (UCIDA) Amends its Policy to Allow Deviated PILOTs for Mixed-Use Housing Projects and Private Developers

On August 12, the UCIDA revised its Housing Project policy, authorizing their agency to grant tax breaks to “any housing project, or any mixed-use project that includes a housing or residential component, that has received the prior approval from the governing board of Ulster County and each town, village, city and school district in which the housing project is located.” (emphasis added). This change allows the Kingstonian developers to “deviate” to the tune of 25 years from the traditional matix, which is meant to encourage good economic development and measurable job creation, or real public benefits such as affordable or senior housing. In addition, it opens the flood gates to any private developer who would now be able to submit the same request.

Will the Ulster County IDA Override the Board of Education’s Vote to Reject the Kingstonian PILOT?  

In a September 28 post by KingstonCitizens.org “The Complication of the Ulster County IDA Recent Policy Change and Public Hearing Date on October 1”  we warned our community of the UCIDA’s new housing policy for mixed-use projects that implied that an approval for a deviated PILOT would require “prior approval from the governing board of Ulster County and each town, village, city and school district in which the housing project is located.” However, it also says that “…in the event that the Agency is not able to obtain the consents of all the affected Tax Jurisdictions to such deviation, the Agency may enter into such a PILOT Agreement that deviates from the policy set forth herein without the consents of such affected Tax Jurisdictions.” (emphasis added)  In other words, if the UCIDA doesn’t get the answer they want, they can override a dissenting agency even if that agency stands to lose the most, such as the school district in this case. 

When our concerns were checked with the UCIDA Chief Executive Officer Rose Woodworth by a local publication, she replied – and on record – that the agency’s policy of mixed-use housing projects and deviated PILOTs would need to get approval from all participating taxing jurisdictions, and that without those approvals they would not move forward.  

Several months later, during the November BOE meeting at which Woodworth was a guest, and during which she received pushback from the majority of board trustees on the 25-year PILOT’s terms, she was asked squarely whether or not the PILOT would need the approval of all taxing jurisdictions to move forward. Woodworth said that she couldn’t answer that question for the board.  Although their internal policy may require all taxing authorities approval, there was no such requirement under NY State law.  

What happens next?

In July, the City of Kingston’s Common Council was the first of the three agencies to review the PILOT terms publically. They went on to approve the developer’s original terms, a 25-year 100% tax exempt PILOT worth $30.6 million dollars.  Since late October, the new PILOT terms have gone in front of both the Ulster County Legislature and the Board of Education.  According to the UCIDA, the Common Council will be required to vote again this time, on the revised PILOT terms. In the City of Kingston, all resolutions must go before an assigned committee (in this case, the Council’s Finance Committee) before going to the floor for a full council vote.  Neither occurred in December. 

However, if the UCIDA can approve the deviated PILOT with or without the consent of all three impacted agencies, then they could choose to not only override the Board of Education’s decision but also rationalize that because of the Kingston Common Council’s unanimous approval of the original PILOT terms, a revote wouldn’t be necessary.  This would be unfortunate, as it would be in the community’s best interests for the Council to have to face their constituents and re-vote, following the BOE’s rejection of the PILOT. (**See Note Below)

We don’t know whether or not the Kingstonian PILOT will be voted on at the UCIDA’s next meeting on December 16. Keep an eye on their meeting page for when the agenda is posted. Until then, you can submit the letter in our “call to action” to support the Kingston Board of Education and to enforce a fair and transparent process.

CALL TO ACTION:  Families who have school age children in the KSCD, as well as Ulster County residents who pay Kingston City school tax (which is 60% of the KSCD population), please CLICK ON THIS LINK to send a letter to support the Board of Education’s decision to reject the Kingstonian’s unprecedented 25-year, $21 + million PILOT and request that the UCIDA follow its own policy requiring the approval of all impacted agencies for a deviated PILOT in order to take any further action. 

**NOTE: Since we published this post, we have learned that since the Board of Education rejected the revised Kingstonian PILOT terms, the Kingston City Council will not be required to revote. At this time, it is now the the UCIDA as to whether they will approve the PILOT agreement or not.

The Kingstonian PILOT and Remaining November Process Steps

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By Rebecca Martin

We’re coming up on nearly three years of following the Kingstonian project process, a proposed $58 million dollar project that promises 129 high-end units, 14 affordable units (with Area Median Income (AMI) based on Ulster County, nearly ⅓ higher than the City of Kingston), a 32-room luxury boutique hotel, 9,000 square feet of retail space, and a 420 parking space complex.  The proposed Kingstonian deviated payment-in-lieu-of-taxes (PILOT) is a 25-year, $30.6 million dollar deferment of taxes for a mixed use, high-end housing project. Since the Ulster County Executive has commissioned a study with the National Development Council (NDC) October 23, 2020 report, in an effort to ‘sweeten the pot’ doesn’t appear to have influenced members of the Board of Education – the agency who has the most to lose.

Here are the next important steps in the process for each of the decision-making agencies as we currently understand them.

Village of New Paltz

On November 4, the Village of New Paltz submitted the following letter to the Board of Education, members of the Ulster County Legislature, County Executive Pat Ryan and City of Kingston Mayor Steve Noble.

Prior to becoming Mayor of the Village of New Paltz, Tim Rogers went to business school and held a successful career in the financial industry. It’s clear in following his advocacy on the matter that our own elected and appointed officials in the City of Kingston do not understand the potential negative impacts that this unprecedented tax incentive may likely have.

Click on the image to review the full letter

“NDC’s suggested PILOT schedule for the Kingstonian is problematic for Kingston’s school district finances now and long into the future

National Development Council’s (“NDC”) October 23, 2020 cost/ benefit analysis for the proposed Kingstonian development is curiously silent about NYS Property Tax Cap law impacts and how PILOTs harm local taxing authorities’ ability to fund new services. 

Property taxpayers, including those across the Kingston City School District that serves several municipalities, will likely face one of two outcomes if the Kingstonian developers receive the PILOT they asked for or if NDC’s proposed PILOT is used. The board of education will have to choose between: 

  1. Cutting school district programming (e.g. teacher and staff layoffs, increased class sizes, etc.), or
  2. Increasing property taxes

This is just how NYS law and the Property Tax Cap formula works. It is unreasonable to list “net public benefits” from the Kingstonian without even mentioning let alone considering Tax Levy Limit (TLL) impacts. An alternative third option to these two could only occur if there was a material contraction in the number of students residing in the district.

School districts are primarily funded by property taxes and state aid. Property taxes are levied against the Full Taxable Value of real estate and its calculation is subject to the NYS Property Tax Cap law. Annually, each school district follows an eight-step formula to calculate its TLL. The TLL does not change when there is a change in the taxable value due to assessment increases; in that instance, the tax rate decreases. However, when there is significant new project construction, the NYS Commissioner of Tax and Finance calculates a Tax Base Growth Factor (TBGF) that increases the TLL to pay for services arising from the new construction.

If it’s fully taxed, the taxable value of $19 million for the Kingstonian would result in a TBGF of approximately 1.0042 and an increase in the district’s TLL of more than $440,000. However, when a new project is subject to a PILOT agreement, its taxable value is never included in the TBGF. This significantly limits a school district’s ability fund educating new K-12 students created by increases in housing supply.  

Using NDC’s newly proposed PILOT, the Kingstonian developers would pay approximately $2.1 million over 25 years in lieu of school taxes. In comparison, if the project was fully taxed with an assessed value of $19 million at year 1 and the district’s ’19-’20 TLL of $105,589,983 escalated 2% annually, the developers would pay $16.6 million in school taxes. 

Moreover, harm is perpetual. During years 26 through 50 the school district could see $23.8 million less in TLL because of the original PILOT. This would happen because the tax cap formula’s Tax Base Growth Factor never adjusts — even at the end of a PILOT’s term when properties become taxable.

Given these scenarios, if the district’s board of education opted not to cut programming because of its lowered TLL from the PILOT, the board could try to make up the difference and raise revenue by raising property taxes. This would require asking voters to support a tax cap override. And, a supermajority of 60% or more would be needed to vote in favor of raising taxes to offset the shortfall.

In 2020, only 13 districts across the state chose this option; there was a 69% success rate, compared with a 99% success rate for districts that did not need a supermajority approval of their budget. The Kingston board of education has never attempted a budget override. 

We are troubled by this proposal to prop up investors of market rate for-profit housing, lodging, and retail. The Kingstonian could set a dangerous precedent for Ulster County that unfairly harms taxpayers and school districts’ ability to serve students. Please take a closer look at what is being considered.”

Kingston City School District Board of Education (BOE)

During a recent Board of Education meeting on November 4, Trustee James Michael, who also is chair of the Audit and Finance Committee, publicly revealed his concerns regarding the Kingstonian PILOT process and the Ulster County Executive’s NDC Study. Michael says that the BOE was not contacted by the consultant or the county while new PILOT terms for the Kingstonian PILOT report were being considered. Weeks after the report was released, the board said that it had still not received the new PILOT terms or any communication from the county. Superintendent Dr. Paul Padalino revealed at that time that he had received the new PILOT terms on that day (11/4) and would release it to the board following their meeting that evening.

The next Kingston City School District Board of Education meeting is on Wednesday, November 18 at 7:00pm. If you wish to submit public comment (live public comment is not permitted during Covid) please consider supporting the members who have correctly taken a stance against a PILOT for this proposal. WRITE: boe@kingstoncityschools.org

Click on the image to hear Trustee James Michael’s comments

“Last Friday, I was reading the news with a headline that stated the county officials celebrated a new PILOT deal for the developers of the proposed Kingstonian project. That caught me by surprise. What I want to tell the county and the developer is that they ignored us (BOE) and they didn’t respect us at all. We are the biggest stakeholders of this development and the biggest losers as far as tax revenue…that’s what the politicians do. They always promise you something and do something else. Last year, Ulster County Executive Pat Ryan stated the Kingstonian project was unacceptable and absurd for the community. Politicians get paid, we don’t. We do this for the love of the kids. Politicians lie, but we don’t because we teach our children to be truthful and honest.”

“…(Joesph) Bonura stated on July 18 that if the PILOT agreement didn’t go through, the city would lose the $3.8m (Downtown Revitalization Initiative grant, DRI) grant….I met with Mayor Steve Noble and I asked him face to face, is it true that we can lose the grant money (DRI) if we don’t approve the Kingstonian PILOT and his answer was yes. That was a blatant lie….I had a conversation with the Director of the DRI grant program in the Hudson Valley. He told me that the city is not going to lose the grant. It can easily be allocated to the rest of the project.””We need more revenue for the district. They (the developers) were very arrogant, demanding and made an ultimatum and said either we have this project otherwise we don’t have a parking garage. Maybe the City of Kingston needs a parking garage, the developers want to build it and expect the city of Kingston taxpayers to pay for it, but to me that’s unacceptable.”

“When you think about the Ulster County Industrial Development Agency PILOT program, I want you to keep in mind the students because they have the most to lose and deprived of a good education…I send a message to developers, the Kingstonian developers and the future developers that the school district will not accept anymore deviated programs. I would suggest that the Kingstonian developers come back to the district with a more traditional PILOT program of 5- 10 years, not a deviated PILOT for two generations.”

City of Kingston Common Council

There has been mixed signals about whether or not the Kingston Common Council has to vote on the Kingstonian PILOTs new terms. It isn’t clear why they wouldn’t, as the terms are different then they were when their unanimous vote was cast over the summer. We’ll have to wait to see what sort of fancy footwork Kingston Corporation Counsel Kevin Bryant and Dan Gartenstein have in store.

If new PILOT terms appear, it would go in front of the Kingston Common Council’s Finance and Audit Committee (posted above). Please consider WRITING TO EACH OF THEM INDIVIDUALLY and request that if new PILOT terms appear for a council vote, that they align their decision with the Board of Education, as it is our children and tax paying families who attend the school district that have the most to lose.

Ulster County Legislature

In October when the Kingstonian PILOT terms were submitted to the Ulster County Legislature, both the Economic Development, Tourism, Housing, Planning & Transit and Ways and Means Committees each had a crack at it. At that time, it was already known that County Executive Pat Ryan had requested an “Independent” study regarding the Kingstonian PILOT terms. The Economic Development committee passed the old terms through anyway while Ways and Means tabled their decision until the study was delivered and the committee had time to review it.

With the results and new PILOT terms delivered in late October, the Economic Development committee did not take it up again during their November. We inquired with the Ulster County Legislative Clerk to understand why, and were told at the time of inquiry, “We still haven’t received any new document in relation to potential changes. As such, the resolution currently stands in the Ways and Means Committee. However, we anticipate having a new proposed agreement very shortly. The Ways and Means Committee members will have the option to amend the resolution in Committee to consider the new agreement.” Although the response didn’t answer our question thoroughly as to why the new terms would not have to be reviewed by both committees as was the case last month, at the Ways and Means Committee meeting this week, the committee adopted the new terms (that have not yet been made public). With much disrespectful banter from Legislators Dave Donaldson and Ken Ronk, Legislators Tracy Bartels and Lynn Archer called them out and held their ground securing the majority of votes to postpone the Kingstonian PILOT vote until committee members had their questions answered by the consultant. Legislator Eve Walters (New Paltz) publicaly stated that she would reject the Kingstonian PILOT agreement.

LISTEN
to Audio of the Ways and Means Committee discussion of the Kingstonian PILOT from 11/10/20

The next Ways and Means Committee meeting will occur on Tuesday, November 17 at 5:30pm. If they decide to pass the new PILOT terms through their committee, it will go to the floor that evening at 7:00pm for a full legislature vote. Since Covid, the Ulster County Legislature amended its rules to allow only public comment on items listed in the agenda. In this case, we won’t know whether or not the Kingstonian PILOT will be on the agenda until 6:30pm that evening, 30 minutes before the legislature meets. NYS Open Meetings Law has no requirements for when Agendas are made public. It’s a flaw in our system, in our opinion. A good practice would be to post agendas at least several days prior to any public meeting in order to allow the public to plan to attend and to prepare their comments.

ADDITIONAL READING

Missed the Kingstonian PILOT press conference event? Here’s a recap and next steps

Criticism of Ulster County’s Independent Review for the Kingstonian PILOT

The road paved by a $30.6 million dollar Kingstonian PILOT (in exchange for a parking garage): A timeline and next steps in October 2020

Highlights from the UCIDA Public Hearing on October 1

The Complication of the Ulster County IDA Recent Policy Change and Public Hearing Date on October 1

The Kingstonian Project PILOT Needs Independent, External Analysis to Review Economic Assumptions Before Approving $30.6m over 25 years

Criticism of Ulster County’s Independent Review for the Kingstonian PILOT

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Click on image to listen to a February 15, 2019 interview of Ulster County Executive candidate Pat Ryan respond to the lack of affordable housing at the Kingstonian as “unacceptable” and “absurd,” adding, “The parking is great, but if you can’t afford a place to live, parking is the least of your worries.”  Image courtesy of the Kingston Tenants Union.

By Rebecca Martin

As we have recently reported, “The Kingstonian is a proposed $58 million dollar project. It promises 129 high-end units (to date, rents will range from $1,500 – $2,850), 14 affordable units (with Area Median Income (AMI) based on Ulster County, nearly ⅓ higher than the City of Kingston), a 32-room luxury boutique hotel, 9,000 square feet of retail space, and a 420 parking space complex.  The developer is asking for a deviated Payment In Lieu Of Taxes (PILOT) agreement where they will pay nominal taxes for 25 years. Community members who have been following the Kingstonian project’s PILOT request have asked for more detailed financial information to understand the potential impacts (including the developer’s “trade secrets,” which are fair game for a public/private partnership). Others are up in arms that a wealthy developer who wants to create high-end housing and a luxury boutique hotel in Uptown Kingston would have the audacity to request a 25-year, 100% tax exempt PILOT agreement worth $30.6 million dollars. Nearly seven months after the SEQR process concluded (where the full value of public subsidies should have been revealed but were not), the developers finally shared their PILOT request with the Ulster County Industrial Development Agency (UCIDA) and threatening the board that without approval of the PILOT, they would not secure the financing that they need and that the City of Kingston was at risk for the project and the Downtown Revitalization Initiative (DRI) grant to “go away.”   

Ulster County Legislative and Executive Branch throw curveball

On October 1st, Ulster County Legislator Lynn Archer appeared before the UCIDA during a Public Hearing on the proposed Kingstonian PILOT to announce that she and her colleagues were in favor of an independent, third party study of the proposed Kingstonian PILOT.  “We are currently relying on the people benefitting from the project to provide the projected costs of the project without validation from an independent third party who has the knowledge of these types of complex endeavors,”  she said.  With the Kingstonian PILOT up for a vote in October it was a surprise and relief for a legislator to make that  request.  Up until that point, it seemed likely that the full legislature was poised  to approve the PILOT terms even with so many outstanding concerns.

Several days later, County Executive Pat Ryan echoed those sentiments with his own press release, pledging that the county would pay for the independent cost benefit analysis.  “Before a decision of this magnitude (the Kingstonian PILOT) is made, the public deserves an impartial assessment of the costs and benefits of the project. Therefore, I am calling on the project developers to disclose their financials to an independent evaluator so that we can have a full picture of the project. This level of transparency is critical given the scale and impact of the proposed PILOT agreement,”  Ryan said.

On the same day of the County Executive’s announcement about his support for an independent review of the Kingstonian PILOT, a second announcement was sent from his office of a change in the Economic Development office.  Tim Weidemann, who had served as Director of Innovation, was tapped as Director of Economic Development, replacing Lisa Berger who would now serve as Director of Tourism.  Weidemann would coordinate the Kingstonian study on the county’s behalf with the National Development Council (NDC), a not-for-profit led by Daniel Marsh, a consultant who has a long history in the Hudson Valley.

When news hit about the selection of the NDC and Marsh in particular, some were concerned as to whether the organization could be impartial.  Having served in a number of positions in Orange County, Marsh had also served as a consultant to the Kingston’s Local Development Council (KLDC) during the recent Gallo administration when Brad Jordan, one of the principal Kingstonian developers, was the council’s secretary. 

The study was originally meant to be ready in time for the October 20th Ulster County Legislature Ways and Means Committee meeting and Kingstonian PILOT vote, and would cost somewhere in the vicinity of $10 – 15k, money that the county said it hoped would be reimbursed (by the developer, we presume).  The promise for a study to examine the PILOT terms encouraged all of the other involved agencies to table their votes that month (that included the full legislature, Board of Education (BOE) and UCIDA) until the study was complete and each body had had the time to review it.

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The road paved by a $30.6 million dollar Kingstonian PILOT (in exchange for a parking garage): A timeline and next steps in October 2020

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By Rebecca Martin

Community members who have been following the Kingstonian project’s payment-in-lieu-of-taxes (PILOT) request have asked for more detailed financial information to understand the potential impacts (including developer’s “trade secrets” which are fair game for a public/private partnership). Others are up in arms that a wealthy developer who wants to create high-end housing and a luxury boutique hotel in Uptown Kingston would have the audacity to request a 25-year, 100% tax exempt PILOT agreement worth $30.6 million dollars. Nearly seven months after the SEQR process concluded (where the full value of public subsidies were not and should have been revealed), the developers publically revealed their PILOT request to the Ulster County Industrial Development Agency (UCIDA) threatening the board that without their approval of the PILOT, they would not secure the financing that they need and that the City of Kingston was at risk for the project (and the Downtown Revitalization Initiative (DRI) grant) to go away.

According to Rose Woodworth, the CEO of the UCIDA, the ground rules for a deviated PILOT (meaning that it’s not a standard PILOT under the unified tax exemption policy) include the consent of the involved local jurisdictions and in this case, the Kingston Common Council, Ulster County Legislature, and the Kingston City School District’s Board of Education.  She also noted that the UCIDA “…could, if it so determined, to move forward without the consents of the local jurisdictions.”  The process that Woodworth nonchalantly describes reminds us of the worst part of top down culture. It is not meant to be fair or inclusive, but only to provide the illusion of participation. Those “in charge” may override a decision if it runs counter to their desired and in many cases predetermined outcome. 

There are still steps remaining in the process for the Kingstonian PILOT, one of which is an independent, third party cost benefit analysis of the Kingstonians’ financials requested and paid for by Ulster County.  The National Development Council (NDC) was hired only last week as an unbiased third party. The report, that the City of Kingston should have requested last year, should be available any day now. If released to the public (and it should as a taxpayer funded study for a public/private partnership) we will be able to learn its legitimacy based on the materials the NDC has solicited from the developer.

Earlier in October, when Ulster County Executive Pat Ryan announced plans for this study, the Board of Education tabled its discussion on the Kingstonian PILOT until they could review the report. The Ulster County Legislature’s (UCL) Economic Development, Tourism, Housing, Planning & Transit Committee chaired by Legislator Brian Cahill on the other hand went on to pass the Kingstonian PILOT resolution to “…be fair to the developers.” The PILOT resolution appeared next at the Legislature’s Ways and Means Committee chaired by Legislator Lynn Archer, where they wisely chose to table the discussion for the same reasons as the Board of Education.

The next bit may move very fast, with the Ways and Means committee meeting for a second time this month on Tuesday October 20 at 5:00pm. If the Kingstonian PILOT is on their agenda and it is passed out of committee, it goes to the Democratic caucus at 5:45pm and most likely to the floor for a full legislative vote at 7:00pm.

We’ve laid out a timeline of all of the events that have led us to this moment that you can review below. We conclude with “what’s next” for the remaining meetings regarding the Kingstonian PILOT in October.  

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Highlights from the UCIDA Public Hearing on October 1

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There was good news (members of the Ulster County Legislature called for an independent, third party analysis as we did in our BLOG post last week. It’s the only sensible thing to do) as well as courageous and touching testimonies last evening during the Ulster County Industrial Development Agency’s public hearing for the Kingstonian project PILOT.

Here are the highlights. Click on the images to review each individual testimony.

James Shaughnessy, City of Kingston resident

“In contradiction to what Dan Baker said (City of Kingston Assessor), PILOTs do not have a positive impact on school district finances. The school district is subject to tax cap legislation with limits the growth of our tax levy…when the new construction is under a PILOT, the growth factor is zero at the beginning of the agreement and it is not included in the growth factor at the end of the agreement. So the district’s tax levy limit is permanently reduced…the developers published a flyer yesterday that claims that the Kingstonian will yield its school district more than 41 million dollars in new revenue over 50 years and that is categorically wrong. The developers don’t seem to understand school district finances. They don’t seem to understand the impact of a PILOT on school district finances and frankly, the Mayor and the Common Council and perhaps Dan Baker don’t seem to understand the impact of a PILOT on school district finances.”
Ulster County Legislator Lynn Archer (District 21)

“I have spoken with several of my fellow legislators and we are all in agreement…we strongly encourage the UCIDA to engage an independent third party firm to undertake a cost-benefit analysis of the Kingstonian project and to present the results of these findings to the various taxing authorities. We are currently relying on the people benefitting from the project to provide the projected costs of the project without validation from an independent third party who has the knowledge of these types of complex endeavors….we all have a fiduciary responsibility to the residents of Ulster County and that an independent review should be undertaken immediately by a firm which routinely does these types of reviews for other IDAs.”
Justin Orashan, City of Kingston resident

“…my own concern, and the concern of an enlarged amount of community members here is the nuance of (those details) in the context of the given moment that we are in in Kingston…for anyone on this call who is housing secure or owns a home, if you’re not directly connected to the families who are really hurting right now, it’s really hard to understand how people are in pain and how this will not benefit all of our community, and how it will indeed hurt many of our community members.”
City of Kingston Alderman (Ward 3) Rennie Scott Childress.
Hold him accountable, Kingston.

“…a desperately needed parking garage at no cost to the taxpayers. These structures are expensive so the current project is an ingenious solution. A PILOT to support its construction is essential to its success.”
Sarah Wenk, City of Kingston resident

“Our schools can’t wait 25 years for revenue from this project to start trickling in. The developers own materials set out a 50-year timeline that is speculative at best, fantastical at worst. We are in the midst of a crisis now…our schools are facing huge budget cuts. The taxpayers of Ulster County are being asked to subsidize luxury housing for a possible benefit that won’t begin until after most of us are dead.”
Patrick Logan, Attorney
Rodenhausen Chale & Polidoro LLP 
Logan appeared on behalf of several property owners in Uptown, Kingston.

“I want to request that the IDA keep the public hearing open for…at least an additional 30 days to all for adequate public comment. Several weeks ago my office submitted a FOIL request for all of the IDA’s records relating to the PILOT application. We did not receive a response until approximately 4pm yesterday…my clients are in the process of hiring a third party financial analyst to review the information….to submit this analysis.”
Village of New Paltz Mayor Tim Rogers
(read by City of Kingston resident Jess Mullen)

“On September 15, 2020, the Kingstonian developers published the “Fiction v. Fact” document on their website which stated that “Developers and City officials are comfortable that the increased parking is adequate for peak demand and any excess employee and hotel parking can be accommodated in the adjacent plaza….Please review City of Kingston zoning code §405-34 (J.) “Parking space ratios.” Reading the code and using some simple arithmetic shows how the Kingstonian requires approximately 345 parking spaces (hotel: 34, apartments: 271, commercial space: 40). The developers also stated in their “Fiction v. Fact” document that “without the garage component, there would be no PILOT request as one would not be needed. The PILOT starts and stops with the costs to build, operate, and maintain the parking garage…If the project is only adding 75 (420 minus 345) public parking spaces — not even the 200 that the city asked for in their 2016 RFQ — the UCIDA should take an extra hard look at whether to grant a PILOT to build 75 parking spaces. Additionally, plans include charging users 3x more for parking ($1.50 per hour) than the city charged just a few years ago.”
Ilona Ross, Resident of Olive

“Joseph Bonura is a recipient of two 99-year PILOTS in the City of Poughkeepsie that will deprive that city of billions of dollars. It ought to shock and conscience of any observer that he has dared to come to Kingston and ask for a PILOT.”

The Complication of the Ulster County IDA Recent Policy Change and Public Hearing Date on October 1.

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There has been some confusion about the process for the proposed Kingstonian deviated PILOT, regarding whether or not the agencies (the Common Council, City of Kingston School District Board of Education (KSCD), and Ulster County Legislature (UCL)) must all agree on the PILOT terms in order for it to proceed. The source of that confusion stems from an expedient decision by the Ulster County Industrial Development Agency (UCIDA) to change its rules in ways that benefit the Kingstonian.  

Rose Woodworth, CEO of the UCIDA clarified the question about the process and the Kingstonian deviated PILOT in a recent email: 

  1. In general, the UCIDA has the power to grant PILOT Agreements (and real property tax abatements).
  2. In connection with the granting of tax abatements, the UCIDA has adopted a Uniform Tax Exemption Policy (the “UTEP”).  Under the UTEP, the UCIDA may grant certain levels of real property tax abatements to project applicants.
  3. As has been described both in the IDA Application and in media reports regarding the Kingstonian Project, the real property tax abatement being requested by the project applicant is a deviation from the normal real property tax abatement provided in the UTEP.
  4. As provided in the UTEP, in cases of deviations the UCIDA is subject to the following requirements:

(D) Review by Agency with Affected Tax Jurisdictions. Before the Agency shall enter into a PILOT Agreement that deviates from the policy set forth herein, the Agency shall (1) notify each affected Tax Jurisdiction in accordance with Section 8(A)(2) hereof, and (2) attempt to obtain the written consent of all the affected Tax Jurisdictions to such deviation. In the event that the Agency is not able to obtain the consents of all the affected Tax Jurisdictions to such deviation, the Agency may enter into such a PILOT Agreement that deviates from the policy set forth herein without the consents of such affected Tax Jurisdictions. The provisions of this Section 8(D) shall not apply in situations where the Agency holds title to property for its own account.

“As noted in the above excerpt from the UTEP, the Agency is obligated to get the local approvals regarding the PILOT deviation.  And, as noted in the excerpted language, the UCIDA could, if it is so determined, move forward without the consents of the local jurisdictions.“

In other words, even if the three impacted agencies –Kingston’s Common Council, KCSD and UCL — don’t all agree to support the PILOT and its substantial tax breaks for the developer, the UCIDA may proceed to approve this anomalous PILOT request on their own. In short, the UCIDA – an appointed and democratically unaccountable body – may make a lone decision to approve the PILOT without the consent of all of the impacted tax jurisdictions like the School Board. 

Back in July, the City of Kingston and Ulster County Industrial Development Agency received a letter from Victoria L. Polidoro, Law Offices of Rodenhausen Chale & Polidoro LLP.  Polidoro represents several property owners in Uptown, Kingston. The Polidoro letter informed the IDA that the law did not authorize them to grant the PILOT application.  “As a threshold matter the IDA does not have authority to consider or grant the Application for the Project which includes residential housing units. The IDA’s Housing Projects Policy, which was reaffirmed on January 8, 2020, only allows IDA financing in limited circumstances. It provides that:

A. The Agency will only consider the granting of any “financial assistance” (as defined under the Act) for following projects that provide housing:

  1. (1)  a project that satisfies the definition of a continuing care retirement community project under Section 859-b of the Act; or
  2. (2)  a project by an industrial, manufacturing, warehousing, commercial,research and recreation facility (as defined in the Act) that provides workforce housing for its employees.“

With new information from the Polidoro letter, the IDA appeared to hastily approve a revised policy change a month later on August 12 authorizing their agency to grant tax breaks to “any housing project, or any mixed-use project that includes a housing or residential component, that has received the prior approval from the governing board of Ulster County and each town, village, city and school district in which the housing project is located.”

The UCIDA’s recent process change is troubling for several reasons worth analyzing. Through this policy change, the UCIDA has empowered and entrusted itself to unilaterally give away $30 million to wealthy real estate developers during a pandemic irrespective of the judgements of the very elected officials representing the jurisdictions impacted by the subsidy. The IDA itself is an appointed body and, therefore, democratically unaccountable, making their rule changes and subsidy granting power all the more offensive to the principle of procedural fairness. The damage done to due process by public officials who pledge to uphold the public interests is deeply corrosive, undermining a sense of trust at the core of good local government. We should demand more from those who represent us. At a minimum, citizens should expect that governing rules are clear, consistent and fair to all parties. Any changes to procedure should never benefit one party over another in the middle of a highly contentious process.

To make matters worse, the UCIDA has scheduled their required public hearing on the proposed Kingstonian PILOT, on October 1st, prior to the KCSD vote, which may take place on October 7 (or the 21). The UCIDA’s public hearing is also scheduled ahead of the UCL vote on October 20.  By scheduling the public hearing before the other agencies (KCSD and UCL), the UCIDA prevents concerned taxpayers from addressing their members should either of the two remaining agencies reject the PILOT agreement for the Kingstonian.  The UCIDA members have effectively foreclosed public comment following the votes of those other affected agencies, precluding an opportunity for the public to question them and advocate for fairness. 

Take Action

Thursday, October 1st at 7:00pm
The Ulster County IDA public hearing on the Kingstonian PILOT will occur remotely. Please LIKE our facebook event to learn more about how you can participate. 

The Kingstonian Project PILOT Needs Independent, External Analysis to Review Economic Assumptions Before Approving $30.6m over 25 years

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The Kingstonian is a proposed $58 million dollar project. It promises 129 high-end units (to date, rents will range from $1,500 – $2,850), 14 affordable units (with Area Median Income (AMI) based on Ulster County, nearly ⅓ higher than the City of Kingston), a 32-room luxury boutique hotel (across from the Senate Garage which hosts “…dozens and dozens and dozens of wedding events each year”), 9,000 square feet of retail space and a 420 parking space complex.

The developer is asking for a payment in lieu of taxes (PILOT) agreement where they will pay nominal taxes for 25 years; a subsidy worth approximately $30.6M, in exchange for a temperature controlled parking garage that will primarily serve its high end tenants and luxury boutique hotel guests.

Over and over again, the Mayor of Kingston, members of the Common Council and the developers tell us that Kingston needs this parking garage and that, with a PILOT, it could be built at “no cost to taxpayers.”  If a PILOT allows a developer to defer their real mortgage, property, school and sales tax, how does their project come at no cost? 

The City of Kingston missed both of its opportunities to request an independent, external analysis of the Kingstonian developers’ economic assumptions. The first came during the State Environmental Quality Review (SEQR) that ended last December and the second during the recent common council special finance committee meeting in July.  The developers’ revenues which they call ‘trade secrets’ were not disclosed to the public, when the PILOT terms were approved by the full council in August.  The public needs to know the profit margin or the “trade secrets” in order to determine whether to approve the PILOT.  

With two agencies still left to vote on the council’s PILOT terms, the developer is making another attempt to persuade members of the Board of Education (BOE) and Ulster County Legislature (UCL) to support the PILOT, with a public action form letter crafted without any real substance.  “The PILOT will provide tax relief and public benefit at no cost to taxpayers.” There it is again.  “No cost to taxpayers.” The developer also claims that “…they have worked with Kingston City officials and the IDA Board to ensure that the dollar value of the public benefits of the Kingstonian outweigh the PILOT at zero cost to taxpayers.” But without an independent, external analysis to review their economic assumptions, the tax paying residents of the City of Kingston and Ulster County will never know. 

In their letter, the developer claims “…that the benefits of the project include twice the public parking, 129 market rate apartments, 14 affordable apartments, 30 hotel rooms (when it is actually 32), an outdoor public pedestrian plaza/gathering space, long-desired public restrooms, 300 + new consumers to the marketplace offering immediate relief to the business district and generating much needed sales, occupancy, and property tax revenue, and an estimated 153 new jobs.” But the developer still isn’t able to pin down the number of parking spots they need for this project, even though the City of Kingston’s zoning code says that nearly 313 of their 420 newly created parking spots will be required to serve their high-end apartment tenants and luxury boutique hotel guests leaving us with approximately 107 public parking spots, fewer than the 144 parking spots that we currently have now.  Even with a waiver to allow them to provide less, there will now be an influx of people –  tenants, hotel clients, uptown businesses and residents all vying for parking.  They assert that the overflow can park across Schwenk Drive if their garage is full.  So why is the public being asked to fund a parking garage when they may be losing parking spaces, charged higher fees and possibly not able to find a spot to park in the temperature controlled lot anyway.

As for affordable housing, the 14-units that various politicians claim credit for was due to the hard work of advocates that pressed the matter and won. The developer ended up making the concession but expanded the size of their complex, making their original 129-unit project even larger, with a whopping 143-units in the center of Kingston’s historic uptown.  As reported earlier, it appears that the developers are following the Area Median Income (AMI) not for the City of Kingston ($48,186) but for all of Ulster County ($69,539) that could make those starting rents nearly ⅓ higher.  

As for jobs, they promised 40 full time positions in their application. However, 84% of them were based on a single person’s salary, at $20.73 per hour. This is insufficient income for anyone raising a child, and certainly not enough to rent a one-bedroom apartment in the Kingstonian (or nearly anywhere else in Kingston.) 

The developer claims that “…this project comes at an opportune time when our local economy is in need of job creation, both affordable and market rate housing, and sales tax revenue.  The project also creates an immediate economic boost from the construction phase and revenue from the new taxes that will be generated.”  But we know that the PILOT request is coming at the worst possible time, in the midst of a global pandemic, and when our local, county, and state economic futures are unclear.  In early summer, the City of Kingston, in preparation for a hit to their budget, began furloughing and cutting some of its workers. Tax revenue for Ulster County is unknown and the state may hold back state aid for the City of Kingston School District by 20%, while residents’ school tax bills have increased.  Our Mayor and Common Council endorsed the loss of revenue at one of the worst economic moments in the City’s history without requesting an independent, external analysis to review the developers economic assumptions to understand whether or not the immediate or long term benefits are worth the PILOT investment.

The developer says that “…this project was initiated by the City of Kingston, and is a true partnership between the City, School, County, State and the citizens of our community and that without this partnership the project is not fiscally feasible and the taxpayers will lose the multitude of community benefits and added revenues it brings.”  But in our opinion, a true partnership includes a developer who stands to make a windfall in the City of Kingston paying their fair share of taxes.  Some community members have asked if it’s even wise for a project to proceed when a project like this isn’t ‘fiscally feasible’ without a $30.6 million dollar PILOT.  The proclaimed community benefits are a temperature controlled parking garage (that the developer needs more than we do to serve their high-end apartment tenants and luxury boutique hotel guests), a couple of public bathrooms, a pedestrian plaza with a water feature, an internship to train their future $15.00 per hour wage workers and a walkway over Schwenk Drive. Is that the way we want to invest our hard earned, finite tax dollars?

As a public/private partnership, we think our community deserves more information before it decides on the $30.6 million dollar PILOT. We encourage our elected officials at the BOE and UCL to be responsible and request that an independent, external analysis is performed to review the Kingstonian’s economic assumptions to be reviewed in turn by all tax paying residents living in the City of Kingston and Ulster County. 

RESOURCES

READ: The Kingstonian Project will require 343.5 parking spaces per Kingston’s zoning code

CALL TO ACTION:

We encourage all community members to draft their own letters to decision makers of the Kingstonian PILOT asking for an independent, external analysis of the Kingstonian’s economic assumptions and the feasibility of a $30.6 million dollar PILOT.

City of Kingston Board of Education

jshaughnessy@kingstoncityschools.org
sspicer@kingstoncityschools.org
ccollins@kingstoncityschools.org
hlamb@kingstoncityschools.org
plowe@kingstoncityschools.org
rjacobowitz@kingstoncityschools.org jmichael@kingstoncityschools.org
sjordan@kingstoncityschools.org
nscherer@kingstoncityschools.org ppadalino@kingstoncityschools.org

Ulster County Legislature and County Executive

Chair@co.ulster.ny.us
vfab@co.ulster.ny.us
Mary.Wawro@co.ulster.ny.us
Albert.Bruno@co.ulster.ny.us
Dean.Fabiano@co.ulster.ny.us
Brian.Cahill@co.ulster.ny.us
Abe.Uchitelle@co.ulster.ny.us
Peter.Criswell@co.ulster.ny.us
Laura.Petit@co.ulster.ny.us
HLitts3@aol.com
MaryBeth.Maio@co.ulster.ny.us
Thomas.Corcoran@co.ulster.ny.us
Kevin.Roberts@co.ulster.ny.us
Ken.Ronk@co.ulster.ny.us
Craig.Lopez@co.ulster.ny.us
John.Gavaris@co.ulster.ny.us
Tracey.Bartels@co.ulster.ny.us
James.Delaune@co.ulster.ny.us
Heidi.Haynes@co.ulster.ny.us
MannaJo.Greene@co.ulster.ny.us
Eve.Walter@co.ulster.ny.us
Lynn.Archer@co.ulster.ny.us
John.Parete@co.ulster.ny.us
LegislatorHeppner@gmail.com
exec@co.ulster.ny.us

JOIN US. Please ‘like’ our facebook events to keep up-to-date on Kingstonian PILOT public hearing and potential votes in October. 

Thursday, 10/1/20 @ 7:00pm   FACEBOOK EVENT
The Ulster County Industrial Development Agency  (UCIDA) Kingstonian PILOT Public Hearing 

Wednesday, 10/7/20 @ 7:00pm  FACEBOOK EVENT
The City of Kingston Board of Education may vote on the Kingstonian PILOT. 

Tuesday, 10/20/20 @ 7:00pm  FACEBOOK EVENT
The Ulster County Legislature may vote on the Kingstonian PILOT. 

The Ten Things We Know about the Kingstonian PILOT and Remote Press Conference on 9/15/20

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“Say NO to the Kingstonian PILOT” is a remote press conference on Tuesday, September 15th at 5:30pm.  Get ready and CLICK ON OUR VIDEO LINK to join us and to learn what you can do.

Or, visit our FACEBOOK EVENT for up-to-date information on the Kingstonian PILOT process.

The Kingstonian is a proposed $50M, 143-unit luxury housing complex with a 32 room boutique hotel, 8,000 square feet of retail space and a 420 parking space complex. It also includes a walking bridge to the Herzog’s Plaza, which is owned by one of the developers. In exchange for closing a public street to create a “pedestrian plaza”, the developer promises a couple of public toilets. 

The developer is asking for a payment in lieu of taxes (PILOT) agreement where they pay no taxes for 25 years; a subsidy worth approximately $30.6M.

The Kingston Common Council unanimously approved the PILOT’s general terms. Although the Council may believe that the tax-free deal for luxury apartments is a good bargain for Kingston, it is only one of the three involved agencies that would be impacted by the PILOT and have to agree to the terms in order for the PILOT to go through. The other agencies include the Ulster County Legislature (UCL) and the Kingston City School District Board of Education (BOE).

A tax-free deal for luxury apartments in Kingston would be felt beyond the Kingston city boundary. Municipalities that pay Kingston City School taxes include the Towns of Esopus, Hurley, Marbletown, New Paltz, Kingston, Rosendale, Saugerties, Ulster and Woodstock.  As a result, it’s not just Kingston that will be left with higher school taxes. PILOTs result in less tax revenue, which requires everyone else to make up the difference for a developer that stands to make a windfall in profits with a $30.6 million subsidy courtesy of the City of Kingston’s Common Council. 

At a time of financial crisis when the coronavirus pandemic has led to cuts in city services and jobs, loss of tax revenue on this scale could be simply devastating. The proposed Kingstonian PILOT deal could potentially harm the least well off in the city as well as hardworking taxpayers who already struggle to pay high school and property taxes while wealthy real estate developers get a free pass. For county legislators advocating for social justice in housing, services for the poor, and children in need, the PILOT should be particularly worrisome. While not all PILOTs are exploitive, they must be balanced against the potential gains an investor or industry may bring to the area.

There is still an opportunity to stop the giveaway that Kingston’s Common Council shamelessly endorsed. CLICK ON THIS LINK to send a letter to the Ulster County Legislature and say no to developer welfare and tell the Kingston City School Board that education is a public good. Everyone should pay their fair share of school taxes, including wealthy real estate developers.

The Ten Things We Know about
the Kingstonian PILOT

Read more…

The Kingstonain tax-free deal for luxury apartments would pay no school tax

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Editorial Board

This week, the Kingston Common Council unanimously approved general terms for a $30.6 million dollar deviated payment in lieu of taxes (PILOT) for the Kingstonian project. Although the Kingston Common Council may believe that the tax-free deal for luxury apartments is a good deal for Kingston, it is only one of the three involved agencies that will need to approve the PILOT before it can be implemented by the Ulster County Industrial Development Corporation (UCIDA).  The agencies include the Ulster County Legislature (UCL) and the Board of Education (BOE) for the Kingston City School District (KCSD). We anticipate the two remaining agencies will hold public discussions and a vote sometime in September and October. Write and call your representatives and ask when the PILOT is scheduled to be on their agenda and to explain in advance (and in writing) the impacts of a tax-free deal for luxury housing will have on your school taxes.

A wealthy developer will pay no school tax for 25 years?

What didn’t get a whole lot of traction during the Kingston council debate was the fact that the Kingstonian developer will pay nearly no school tax to the KCSD, and that impact will be felt by every municipality that pays into the school tax base.

In their PILOT application, the developers say that they anticipate minimal impact on the Kingston City School District because a similar project of theirs’ in Poughkeepsie has produced no school-aged residents. To further woo decision-makers, the developers are offering a $5,000 per year (for ten years) scholarship fund through the Community Foundation for the KCSD to use at their discretion. This translates into $50,000 over the course of 10 years in exchange for no school taxes for 25 years.  Another pittance in comparison to their school tax without a PILOT is a $40,000 payment that will be apportioned to the city, county and school district. If 60% of the total tax burden – or approximately $24,000 a year – would be paid to the school district, all it would take is 1 1/2 new students to wipe that out.

What will it cost us?

So far, the developers characterize their financial information as “trade secrets” and have aggressively sought to shield that financial information from the public. Without this important information, the public does not know what portion of the $57,885,000 project is taxable and therefore, has no ability to calculate cost or potential benefits to taxpayers over 25 years. 

Though at a recent special Kingston Common Council Finance and Audit Committee meeting, City of Kingston Assessor Dan Baker said that if the Kingstonian project were built today, the full property assessed value would be $19,000,000.  Based on the 2019-2020 non-homestead tax rate, the school tax calculation of $30.10 per $1000, the school tax bill alone would be approximately $571,900 per year.  Assuming the assessed value fluctuates and increases based on inflation and cost of living from year to year, the uncollected school taxes could end up being a staggering $18 million dollars over the life of the 25 year PILOT. 

A tax-free deal for luxury apartments in Kingston will be felt beyond the Kingston city boundary. PILOTs result in less taxable value which requires everyone else to make up the difference. Municipalities that pay Kingston City School taxes include the Towns of Esopus, Hurley, Marbletown, New Paltz, Kingston, Rosendale, Saugerties, Ulster and Woodstock.  

Read more…

Kingstonian Zoning Petition Back at Ulster County Planning Board

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By Rebecca Martin

“When you read the negative declaration by the planning board (for the Kingstonian Project), they almost don’t seem to get the gist of that letter from the Office of Parks Recreation & Historic Preservation (OPRHP) relative to why there is an impact on the stockade district.”
– Dennis Doyle, UCPB

On February 5, the Ulster County Planning Board reviewed the Kingstonian Group Development LLC zoning map amendment for a second time. According to Ulster County Planning Director Dennis Doyle, the letter was referred back because the city’s request had been submitted to the county during the project’s State Environmental Quality Review (SEQR). With a determination made, the Ulster County Planning Board (UCPB) would take another look including at the new affordable housing provision.

The following is video from the meeting filmed by The Kingston News and brought to you by KingstonCitizenes.org. The blog image captures the required modifications and UCPB advisory comments.

RESOURCES

VIEW: Adverse Impact Letter from Office of Parks, Recreation and Historic Preservation (OPRHP)
VIEW: City of Kingston Comprehensive Plan (CP)

2:26 (loosely transcribed) Kingston’s Comprehensive Plan and its affordable housing requirement is for any new or expanding building or development. It wants to abandon the Mixed Use Overlay District (MUOD) in favor of a citywide standard. The UCPB recommends it should be simplified and “a standard set of rules regarding the provision for all multifamily residential applications in the city should be promulgated regardless of location.

5:54 (loosely transcribed) Kingston’s City Zoning Enforcement Officer (CZO) rendered a ruling about whether or not the MUOD permitted new construction and if so, required affordable housing. The statutory language of adaptive reuse would require 20%. ZEO determined that it doesn’t apply. That if new construction is permitted, it does not require affordable housing. Really the city can’t rely on MUOD to provide affordable housing anywhere in the city because of that ruling. That’s a real problematic way to move forward if we are going to let the MUOD continue. The applicant has involuntary offered affordable housing in the project and if you do the math, it’s about 10% of the project.

7:41 (loosely transcribed) County recommendations. Overarching recommendations rest on the City of Kingston’s own planning documents. We find the map amendment to be inconsistent with the purposes of the MUOD and the CP. and therefore, it should not be implemented without clarification of the ability of the District to be used to issue special permits for new construction. Additionally, if such new construction is allowed by special permit, a provision of affordable housing shall also apply.

8:35 (loosely transcribed) Doyle outlines the county’s original recommendations: Option 1, To follow the recommendations of the CP and abandon the MUOD in favor of establishing City-wide affordable housing regulations for all multi-family development, etc. Option 2, To modify the existing MUOD by specifically allowing new construction under the special use section and add the applicability of the affordable housing provision to this use. This is more of a band-aid approach to achieving the goals of the CP for the more limited area of the MUOD. If you are going to amend the map, then you must amend the language in the statute.

9:53 (loosely transcribed) The negative declaration issued by the Kingston Planning Board addresses the issues of whether or not there is a material conflict with adopted plans or goals. The Kingston Planning Board said that they found no conflict. But they do specifically note the 14 affordable housing units is a welcome inclusion. The lead agency determination regarding the zoning petition and its lack of conflict with community plans and goals as officially approved is the critical question before the Common Council and before the County Planning Board. The Common Council is somewhat bound by the lead agency’s determination. But that bounding is in response to the voluntary inclusion of affordable housing as part of the project.

11:15 (loosely transcribed) The neg dec addresses something called community character and historic resources. OPRHP has issued an adverse effect for the project. “The lead agency determination regarding Community Character the zoning petition and its lack of conflict with community plans and goals as officially approved is the critical question before the common council.” When you read the negative declaration by the planning board, they almost don’t seem to get the gist of the letter from the OPRHP relative to why there is an impact on the stockade district….but they never succintinly address the tie in between moving the project elements down slope or cross slope to tie into the schwenk drive commercial area as compared with the traditional ending of that at the Montgomery Ward building or at the top of the hill.

13:16 (loosely transcribed) Required modifications: the place where we are as pertains to affordable housing. ZEO provision says affordable housing is not needed with new construction yet the applicant voluntarily provides it. If that’s the case, then the voluntary provision by the applicant should be enshrined in the city’s planning approvals – as it could be voluntary today and during planning approvals, disappear tomorrow. The UCPB all agreed.

16:47 (loosely transcribed) Advisory comments. As stated previously, the UCPB’s overarching goal was to provide for inclusion of affordable housing. The voluntary provision offered by the developer is offset by the ruling of the ZEO that none is needed. While the board will not require a specific change, the required modification is to ensure that the affordable housing element as offered is not voluntary and is enshrined in the City’s planning approvals in a manner that defines affordability. The UCPB’s advisory comments are to strongly urge the city to abandon the MUOD district and adopt a city-wide solution to affordable housing and its design; Address more fully the adverse effects letter from OPRHP regarding their concerns about district impacts associated with the project tying the historic stockade area to the commercial area along Schwenk Drive as part of any map amendment; Note the need to clarify or include lower Fair Street in the rezoning depending on its ownership/interpretation; Note: the inclusion of a deviated PILOT by the Ulster County IDA in a Neg Dec. No discussion of a PILOT appears in the economic data released to date; Appreciation for the referral by the city to the amendment and inclusion of the affordable housing.

The UCPB said that the rezoning offers the city a clearer recommendation or response to the adverse effect letter. As part of the re-zoning they should look at this, understand and reexamine and clarify the negative declaration in terms of why it’s not an adverse effect in regards to zoning….there are state monies involved here. The state monies will require that they clear up that adverse effect letter otherwise, they’ll run into issues with the state funding. Discussion regarding Fair Street ensued. SHPO calls Fair street historic in some instances.

24:33 (loosely transcribed) On the project being a public/private partnership. We’ve seen a lot of positive economic data put out by the applicant. The negative declaration indicates a deviated PILOT by the UCIDA, meaning that it’s not a standard PILOT under the unified tax exemption policy and we don’t know what it will be. No discussion of the PILOT appears as the economic data released to date. We want transparency here – what the applicant is asking the public to participate in as the project goes forward. The IDA has a matrix, and they are going to propose that the IDA goes outside of the Matrix. In a public/private partnership, you should put everything on the table to fund your garage. The board agreed that it should be included in their comments as it’s in the Neg Dec determination and therefore a part of the SEQR process after discussion.

30:54 (loosely transcribed) Why was this matter sent back to us? Because they completed the SEQR process and we asked that they do so once the SEQR process was done. We asked to resubmit with the affordable housing provision. One of the UCPB members felt the language needed to be stronger. Dennis was concerned about changing the language from before. Public/Private partnerships should be much more up front about what they are asking the public to participate in. So far, we have seen no indication of what the public is being asked to participate in. It’s like traffic or anything else. There should be more transparency as a recommendation.

The UCPB approved the items.

UCIDA Rejects Request for Meeting Time Change.

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This morning, the Ulster County Industrial Development Agency (UCIDA) rejected requests to move their regular meeting time from 8:00am to after 5:00pm.

Here are some of the highlights of the morning board discussion.

Several members challenged KingstonCitizens.org as having a large base but only producing a handful of letter requests and citizens before them on the matter.  Last month when the item was before the board, it was tabled for further discussion. This occurred right before the holidays in late December, giving the public a narrow opportunity to submit a letter of support for a meeting time change.

Ask even the savviest of citizens what the UCIDA does and you’ll be hard pressed to find anyone who can tell you. This is in part why we thought to pursue a meeting time change as a first step could allow for the potential of participation.  For those board members who attributed their rejection in part due to the number of requests as insignificant, it is a poor way to build bridges of trust and better relations with the public, particularly those who wish to be more of a participant in the important work of the UCIDA.

During the discussion, a citizen shared the trouble that he encountered entering the public building a little ahead of 8am, being stopped by an officer on the ground floor level of the Ulster County building. The chair of the board in jest responded “you don’t look like a terrorist.”

Another board member, perhaps in reaction to the citizens in attendance being Kingston residents, shared with us his insight that ‘there is a bigger world outside of Kingston”.

Citizens had some trouble hearing the board during their discussions in Legislative Chambers, where microphones were available. Perhaps next month, if the group meets in the same location and there are people in the audience, they might elect to set them up.

There were some useful points made to consider, such as the potential ‘overtime’ necessary to pay staff for evening meetings,  although this had not been mentioned last month as a consideration.  One could also sympathize with other members of the board who outlined their personal reasons as to why a time change was a challenge.  I was pleased that the board, on their own, requested to create palm cards with a simple explanation of PILOTs to be made available for the public in attendance.

In the end, my take-away was that the point was missed and that is, to include the public in new ways is a multi-prong process. Changing the meeting time should have been seen as a first step.  Outreach and making process accessible and easy to understand (transparency), another. Ongoing storytelling and communication, another. Participation, when it doesn’t exist, takes time and effort and the board has three Ulster County employees appointed to them as staff to help. That the public does not regularly attend this or any other important public hearings, board, committee or commission meetings is a failing of at least these things.

Thanks to those who took the time to participate. We’ll try again another time, in some other way.

VIDEO: Educational Workshop on Economic Development Services in Ulster County and Kingston 11/15/17

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The following video was captured from yesterday’s City of Ulster County Educational Workshop on Economic Development Services in Ulster County and Kingston on November 15th, 2017.  Brought to you by KingstonCitizens.org thanks to The Kingston News.

We appreciate the effort made by Ulster County’s Economic Development office and the City of Kingston Economic Development office to bring this together for the public in 2017.  We hope to see this become a yearly event.

The next Ulster County IDA meeting will occur on Wednesday, December 13th at 8:00am. On the agenda will be a discussion to change the meeting time to later in the afternoon (after 5pm) to allow for greater public participation. 

 

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Video #1:  Educational Workshop on Economic Development: PRESENTATION
(Click on image to review video)

 

The UCIDA AND PILOTs: Accountability to Taxpayers and Citizens.

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VIEW our Event Page for the UCIDA’s Wednesday Meeting

VIEW our Petition “UCIDA and PILOTs:  Accountability to Taxpayers and Citizens.

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Citizens have voiced concern about a PILOT (Payment in Lieu of Tax) agreement and other tax incentives currently on the table for the ‘Hudson Valley Kingston Development (HVKD) LLC’ proposal in Uptown, Kingston.

According to their application, they propose to  “build four boutique hotels in historic Uptown Kingston. There will be 43 hotel rooms in total, with a restaurant at the 301 Wall Street location. This will create a welcome space for community events and gatherings, and stimulate much-needed tourism and revenue for surrounding businesses.”
REVIEW  HVKD’s application

Last week, the Ulster County Industrial Development Agency (UCIDA) held a public hearing on the HVKD’s application. Very few members of the public were in attendance.

In our opinion, that’s probably because UCIDA’s process can be difficult to follow, especially for something like a PILOT agreement or tax abatements. Often, meetings are insufficiently publicized leaving many citizens in the dark.

Incentives are important tools in attracting and supporting business. Allocations of tax dollars in this context are governed by state law and to that end, there are real checks and balances here.

However if the public is not properly made aware of the opportunities that they have throughout the process, then only a handful of appointed officials are in a position to make decisions that will certainly extend beyond their tenure. For that reason alone, it is in everyone’s best interest for a transparent process to be a priority, one that will allow citizens a better understanding and to enter into a more robust discussion.

The next meeting on the proposal is to occur on Wednesday, October 11th at 8:00 am (in the Karen Binder Library on the 6th Floor of the County Office Building, 244 Fair Street, Kingston, NY).  To help the public proceed in an organized manner, we offer the following information and a recommendation for the public to make to the UCIDA board for their consideration.   

VIEW  our Event Page for more information on Wednesday’s meeting.

Background on Industrial Development Agencies (IDA) From the NYS Comptroller.

First, appointments to the Ulster County Industrial Development Agency are made via resolution by the membership of the Ulster County Legislature.  Members serve at the pleasure of the Legislature.  

The Ulster County IDA must follow State law, based on background provided by the NYS Comptroller Thomas P. DiNapoli, the role of IDA’s in New York State are charged with the following:

“Industrial Development Agencies (IDAs) are authorized to provide financial assistance for certain types of projects. Financial assistance includes the issuance of bonds by the IDA to finance construction of a project and straight-lease transactions. Because IDAs’ property and activities are tax exempt, the IDA may pass the benefits of certain tax exemptions (e.g., real property, sales and mortgage recording taxes) to the private entities that undertake the projects. The loss of revenue associated with these tax exemptions can be offset with an agreement for payments in lieu of taxes (PILOTs), under which the private entity agrees to pay all or a portion of the taxes that would otherwise have been imposed had the project not been an IDA project. The IDA’s role is not just to act as the conduit for financial assistance, but also to monitor the success, progress, and cost-benefit of projects, including whether projects are honoring their commitments and agreements.”

In addition to making these decisions, the IDA must also provide follow-up on the projects where they have provided support.

“The IDA’s role is not just to act as the conduit for financial assistance, but also to monitor the success, progress, and cost-benefit of projects, including whether projects are honoring their commitments and agreements.”

The 2016 New York State IDA Law

In 2016, laws were put into place to increase the accountability and efficiency of IDAs.

“In June 2016, new legislation became effective to increase the accountability and improve the efficiency and transparency of IDA operations. For new projects, the law requires standard application forms for requests for financial assistance, uniform criteria for the evaluation and selection for each category of projects for which financial assistance is provided, uniform project agreements, annual assessments on project progress including job creation and retention, as well as policies to recapture, discontinue or modify financial assistance or tax exemptions.”

 

Next Steps in the process for the Hudson Valley Kingston Development LLC PILOT agreement and tax incentives.

On Wednesday, October 11th at 8:00 am, the Hudson Valley Kingston Development LLC is listed in the (Draft) AGENDA #12: Projects “Hudson Valley Kingston Development (Public Hearing held on October 4, 2017)”.  There isn’t information listed as to whether or not the board will be making a decision regarding PILOTS or other available tax incentives for this proposal.  Therefore, it’s important to make your voice heard now – and you can do so by

SIGNING OUR PETITION:  UCIDA and PILOTs – Accountability to Taxpayers and Citizens.   VIEW 

The County must carry on its important business for the residents of Ulster County. We also support and appreciate new business opportunities in our area.  However, given the concerns of the public, we request that any approvals of tax incentives for the Hudson Valley Kingston Development LLC be delayed by the board to allow the following:

  1. Provide additional public educational opportunities on the UCIDA’s process in assigning PILOTS and tax incentives to proposed projects, including, but not limited to:

    * The necessary documentation that is required as evidence that an applicant demonstrates a need for a PILOT or other tax incentives as well as to show that the applicant has exhausted all other available options based on NYSEDC recommendations.      VIEW

    * Explain UCIDA’s Uniform Tax POLICY that, based on the MATRIX determines the Full-Time Equivalent (FTE) hourly rates assessed as per the number of jobs it will create.

  2. How the UCIDA applies recommendations to this, and all project considerations, provided by the Ulster County Comptroller from his 2014 report “A Study of the Impact and Best Practices for Industrial Development Agencies”, specifically:* Support only Projects which likely will not proceed but for IDA assistance;* Require market analyses for “retail” (and services) Projects;* Calculate costs and benefits specifically attributable to IDA assistance;* Give PILOT points only for jobs attributable to IDA assistance;

    * Interpret the cost-benefit analysis with care;

    * Require proof of pre-assistance employment levels;

    * Maximize public access to information;

    * Consider a scoring category for local support.

  3. The UCIDA’s follow-up procedures after-tax incentives are awarded.

  4. Additional public hearings to be scheduled and publicized for more public input.