In the Fall of 2008, the federal Housing and Urban Development Agency (HUD) published an audit focusing on how the City of Newburgh spent Community Development Block Grant (CDBG) funds. In part because of questions raised by the audit, which included the city council being kept out of the loop, the then City Manager JeanAnn McGrane was terminated in January of 2009.
One villain in the controversy is Dr. Thomas Glendening, who received a loan paid for by CDBG funds for his marina on the Newburgh waterfront. Mr. Glendening has yet to make a payment on this loan, despite pulling income from the marina for years. The city finally brought suit against Glendening to pay up in 2008, and Justice Robert Onofry ruled on May 15, 2009, in favor of the city.
On Saturday, May 23, a local community group Community Voices Heard will hold a march at 12:30 p.m. and press conference at 1:15 p.m. at Glendening’s marina at 26 Front Street.
Often discussed is the history of the land transfer to Glendening and his partners, a deal hatched in 1998 that involved a transfer of Newburgh Community Development Agency (NCDA) land (seized during Urban Renewal) to the partners for $200,000. Glendening is the brother-in-law of James Delaune, who was the director of the NCDA. Below is the council minutes, including the public hearing, covering the meeting at which the land was transferred.
Feburary 23,1998, Council Meeting
2/23/98
CITY OF NEWBURGH
PUBLIC HEARING FOR THE SALE OF LAND FOR TWO URBAN RENEWAL PROJECTS
Mayor Carey called a Public Hearing, that had been advertised for this meeting, to consider a contract for the sale of land for private redevelopment by and between Newburgh Community Development Agency and Front Street on the Hudson, LLC.
Since the same comments would apply to both projects, consideration of a contract for sale of land for private redevelopment by and between Newburgh Community Development Agency and Joscos, Inc., was combined with the Front St. Public Hearing. This was suggested by Councilwoman Koisch.
Mayor Carey commented that several months ago, two proposals were presented with regard to two restaurants to be placed on the riverfront. One proposal was by Cosimo DiBrizzi and Joseph Bonura, and the other was by Vincent Clavio, owner of 26 Front Street. At that time, the Mayor said she, and other Council members, asked if there would be financial disclosures and a regular development pro forma presented to the Council. The answer from everyone was “Yes”.
The Mayor continued, stating both projects were on the table at the Work Session last week, and it was the first time, as a City Council member, or Mayor, that a resolution was presented with no supporting documentation. After the meeting, Mayor Carey said she asked the City Manager if financial documentation had been submitted and if other developmental questions had been answered. City Manager Porr responded that he had not seen the financial disclosures, but they were in the Community Development Office. The Mayor asked if she could have copies prior to tonight’s meeting. That didn’t happen, but Mayor Carey said she ran into Bob McKenna and asked for the material herself. Later in the day, she received the information and had a discussion with Bob McKenna and Jim Delaune. The Mayor asked the Council if they had seen any of the documentation, and the response was “no”, but they had discussed it with Jim Delaune.
Mayor Carey said the reason she asked was because she was planning to come to the meeting tonight and support both projects. She said she thought this would be a conciliatory gesture on her part to show the Council she was willing to work with them. She, also, hoped that if she voted in the affirmative, the Council would actively participate in the Steel Style project, whatever that may be. Mayor Carey asked the Council to put the vote off for one meeting due to some information she learned at 4:00 P.M. today.
The Mayor went on to explain the reason for her request. She stated that two Council meetings ago, there was another proposal by her church, Ebenezer Baptist, to build an extension on Urban Renewal land. For its expansion, the church would like to acquire 100 sq. ft. at its rear, which is now a City-owned parking lot, and part of some riverfront land. They received a letter from Corporation Counsel that asked them to have the land appraised and to present financial documentation to indicate that they could and would be a developer. Mayor Carey feels this was a desparity in their treatment versus the treatment for other Urban Renewal land, in that they were asked to provide this information up front, where, to date, the Council still does not have the documentation for the restaurant proposals.
Mayor Carey said she recently attended a luncheon Cosimo hosted, and she had the opportunity to speak to him and his employees privately and had some questions answered. Mr. Warren Boyd, member of our LDC, was in attendance during this question-answer period. Mr. DiBrizzi has a successful restaurant in Jersey City that was started in an area similar to the City of Newburgh. Everyone told him he was crazy to go down there, but he started his business there anyway and proved everyone wrong.
The Mayor stated that the Redeveloper’s Statement of Public Disclosure submitted by Front St. on the Hudson contains a name she is not familiar with. The proposal states that the principals will own 10%, 10% and 80%. The person owning 80% is a physician in the Radiology Dept. of a hospital. This person is, also, the brother-in-law of James Delaune, Executive Director of the Newburgh Community Development Agency. Mayor Carey asked the Council to allow enough time to obtain an opinion from Corporation Counsel as to any conflict of interest and allow her to vote in good conscience.
Mayor Carey pointed out that 20% deposit will be made, but the $200,000 can be used for riverfront stabilization if the City does not get a grant to do it, or it could be used for infrastructure improvement. She said she wonders if the appraisal done today would be the same after the infrastructure improvements. “if so, then what are we getting for the land?” the Mayor asked.
There are many questions that can’t be answered tonight, and the City Manager is not here. Mayor Carey said the waterfront is critical to Newburgh’s future, and its got to be done right.
Councilwoman Angelo responded that she won’t be here to vote at the next Council meeting on March 9th. Councilwoman Koisch said she does not plan to table this, and that she has all the information she needs to vote tonight. The Councilwoman stated that this has been discussed enough, and she would fall asleep if she took all the paperwork home to review. Councilwoman Koisch said we pay Jim Delaune and Bob McKenna to do that for us. She added that she wouldn’t want to read the 4-1/2″ proposal from Steel Style either. Councilwoman Koisch said she trusts Vinnie Clavio, she trusts Wait Lambert, she trusts Cosimo DiBrizzi, she trusts Joe Bonura, and she is ready to go ahead and vote. She added that to hold up Vinnie Clavio for Steel Style is ridiculous.
Mayor Carey responded that it’s the Council’s job to oversee the City Manager and the departments to see that everything is complied with. She said, “After all, it’s our vote that’s on the line.” The Mayor added that it’s not a matter of trust, it’s a matter of doing what’s right. She doesn’t see anything wrong with asking Corporation Counsel for a written statement saying there is no inherent conflict. Mayor Carey said she mentioned putting this off until the next meeting because she doesn’t want anyone to think she is stalling. Councilwoman Koisch said she does not want to table this issue.
Robert McKenna, Dir. of Housing and Community Renewal, stated that there have been appraisers on the property, and the sale price was set at $200,000 each. Since he and Jim Delaune are not experts in financial statements, consultants were asked to review the tax returns prepared by their accountants, and they judged that the principals have the equity needed.
Mayor Carey asked if there is a statement on file by Consultant George Stapf? Mr. McKenna responded that there is a copy on file which was received at 4:30 P.M. today. The Mayor said it probably wouldn’t have been there if she hadn’t pressured for something. She added that she would like to vote in favor of these projects and is prepared to do so in five days, or whenever else the Council would like to meet.
William F. Ketcham, Corporation Counsel, said that he would like to clarify the issue of the relationship between Jim Delaune and Thomas Glendening, M.D. Mr. Delaune did raise this point himself earlier and research was done. According to New York State law, there is no conflict of interest since they are not blood relatives. Mr. Ketcham said he can provide the Mayor and Council with a copy of the law.
Also, with regard to the Urban Renewal process, Mr. Ketcham stated it is covered by statute and federal regulations. In this case, we do see the developers’ financial statements that must be approved. A survey of the property is required. In the case of the waterfront, the property was surveyed in the 1980s by Oak Partners. In the case of the other proposal, the church would like to purchase a part of a larger parcel. That piece was never done, thus the requirement of a new survey. Financials are required, as well as a Plan. The process is identical to what is required of Front St. on the Hudson and Joscos, Inc., and no one is skipping any part of the process. The church has to do a new survey because they are not buying a whole parcel.
Mayor Carey asked Bill Ketcham to explain the whole process, as he did at the last Work Session. Mr. Ketcham described the steps that will be taken: Upon passage of the resolution, the Community Development Agency is empowered to enter into agreement with the developer. The agreement is recorded, and as part of the development plan, the Agency said it would make application to the State of New York for grant money for shoreline stabilization. This is because a large portion of the shoreline is heavily eroded and is so bad near South St. that driftwood is coming up through the manholes. The developers, under these agreements, will be empowered to proceed to secure all of the permits necessary to begin construction along the waterfront. This will have to be accomplished within a certain timeframe. These permits include the NYS DEC, the US Corps of Engineers and the City of Newburgh Planning Board. If the developers cannot get the approvals within the timeframe agreed upon, the agreement is at an end and the the developers will not take title.
The agreement will, also, have an outside date during which the developer has to come in and take title, or the agreement will become null and void. They are considering a two-year period. Oak Partners had no outside date, and this is where the problem came in, since they had an open-end option.
Mayor Carey asked Joe Bunora if he would be willing to wait another five days. Mr. Bunora responded that since her concerns are not with his project, he would like to see the Council vote on his tonight. He said he doesn’t see why the two projects have to be tied together. The Mayor responded that even though she knows him, she doesn’t hasn’t seen his financial statement, and she doesn’t do business that way. The only person who has seen the financial paperwork is George Stapf, and he isn’t here. Mayor Carey said she wants to protect the interest of the people of Newburgh. She added it’s a matter of function and process and doesn’t feel it’s too much to ask him to wait another five days.
Mr. Bonura complained that it’s one stall after another, and asked what the Mayor would say if he backed out of the deal if it’s not voted on tonight? Mayor Carey said she would apologize, but she would have to maintain her position.
At 8:45 P.M., Councilwoman Angelo asked to have a private meeting with her colleagues. At 8:55 P.M., the Council returned to the table.
Councilman Rockafellow said they have met with the people who they have been talking to all along, and nothing has changed. There is nothing wrong going on. Financial disclosures have been reviewed by our Consultants, and they have advised that everything is sound and in order. He said he is prepared to go forward with voting tonight.
Councilwoman Angelo said they have conferred with Corporation Counsel and are confident that they can legally vote on this tonight. She said they hope to get five votes, but she is sure of three.
Mayor Carey stated that she would like to vote for this, and that was her intention, but now feels things have changed. When the project was discussed, it was referred to as Vinnie Clavio’s project, but Mr. Clavio has only 10% interest. Although this project may have been his idea, it is not his project, the Mayor added.
Councilwoman Koisch said that she knows Vinnie Clavio does very well at his business, but, also, knows he couldn’t do this by himself. She added that she was aware of the names involved.
Mayor Carey said she is sorry Joe Bonura took the position he took, but he is a good businessman, and good businessmen do their homework. She said she is asking what she would ask of any developer. The Mayor stated that Mr. Bonura negotiated for more than a year with Poughkeepsie on another project, and said, “But If that’s the way it has to be, that’s the way it has to be.”
Joseph Servocky, Crescent Ave., said if there were as many delays on invasions as we have here, we would still be fighting WWII.
Councilman McAllister said he would like to see these two projects separated. Personally, he has the utmost confidence in Joe and Cosimo’s project, but he has serious problems with the other one, namely 26 Front Street. The Councilman said his personal reasons are: “When Joe builds his facility down there, I can take my grandson down there and have dinner together as a family. 26 Front St. I don’t believe I can take my family in there to have a dinner because of the type of environment that I perceive, from my perspective, that’s down there,” he stated. He said that’s his separation between the two. The Councilman said he wishes he could somehow separate the two tonight, but it doesn’t look like that’s going to happen.
Calais Guglielmi, Grand St., said in looking at this realistically, there are certain delays that happen, and there there is basic business and common sense. If documentation comes in at the last minute and paperwork you have not read, then you should look it over. She added that she is sure the Council wants to really understand what they are getting involved in.
Betty Blake, Lake Dr., said if the Council is serious about getting Newburgh moving, they would go along with these gentlemen. She feels any delay is crucial to Newburgh, and she would like to see this happen in her lifetime. Mayor Carey said she would like to see it happen, as well, but she has the obligation to protect the interest of the taxpayers of the community.
Warren Boyd, N. Montgomery St., said she has been in favor of the projects all along, but doesn’t understand why more information wasn’t given. He added that this is the first time tonight that he was made aware that this isn’t Vinnie Clavio’s project.
Vincent Tallarico, Sherman Dr., said he has confidence in everyone on the Council, but the majority rules and he would like to get on with the vote. He feels everyone is intelligent and can’t understand the delay.
Mayor Carey said this is the Public Hearing portion of the Agenda, and when it comes to the resolution portion, it will be voted on accordingly. This is the public information section and this is part of record and is not a delay. This must occur whether you are for or against it.
Hans Voight, Jamison PI., said he doesn’t see a problem, because if there is one, the City gets the property back. He said there are educated people working on this project. Mayor Carey responded that she’s willing to take an educated chance, but not tonight.
Joseph Vitale, Overlook PI., asked if he should go home with an unhealthy suspicion about the people involved in this? When the Mayor mentioned conflict of interest, he doesn’t know what to think. Mayor Carey said she doesn’t know what he should think, but Councilwoman Koisch said, “You can take home that the Corporation Counsel has said that there is no conflict.”
Richard Taylor, Liberty St., said he doesn’t want to see another situation like IBM years ago. We stalled and stalled and lost that project, and he doesn’t want us to lose this project the same way.
Mayor Carey said she wishes all her questions were answered. She added that the City Manager said this morning that this is the first positive movement in 35 years, and five days is nothing compared to 35 years.
Councilman McAllister described a situation that occurred after he became a Councilman. There was a piece of property he wanted to buy at Public Auction and discussed it at a Work Session. He asked Corporation Counsel to check into the law and see if he could buy from the City. Prior to the Auction, they received written documentation saying a City Council member cannot buy property from the City. This information was given in a timely manner, not at the last minute. He feels this is what the Mayor is looking for: written documentation from legal counsel.
Councilwoman Koisch responded that she is sure this is part of the record that’s being taken down, and it’s on tape, and that’s good enough for her. Mr. Ketcham made a statement, and it’s on tape, and that’s as good as a Memo, she feels. Mayor Carey said tapes can be erased, but the Councilwoman said, “Now we’re getting into something really heavy.”
Councilman Rockafellow said the question has been raised, “Has something changed?” His response is “no”. He said they knew all along that Vinnie Clavio didn’t have the money to do this on his own, and that he had partners. Along with Vinnie Clavio and Walter Lambert, there was another person who disclosed his financial capabilities. They have met the criteria. Mr. Rockafellow said he is comfortable with that, and nothing has changed at this point.
Dae Vitale, Overlook Pl., feels it’s important that Corporation Counsel said Jim Delaune went to them in the beginning to disclose his relationship to a major investor, and this was not hidden. Corporation Counsel investigated it, and according to law, there is no conflict since Jim’s brother-in-law is not a blood relative. She doesn’t feel this is an issue, and that they should get on with the vote.
There being no one else wishing to speak for or against, the Mayor declared these Public Hearings closed.
Feburary 23,1998, Council Meeting
RESOLUTION NO. 38-98
OF FEBRUARY 23,1998
A RESOLUTION APPROVING THE
DISPOSITION OF PARCELS I 0, I I A, I I C, AND 13 A
EAST NEWBURGH URBAN RENEWAL PROJECT
NYR-189BY THE NEWBURGH COMMUNITY DEVELOPMENT AGENCY
TO FRONT STREET ON THE HUDSON, LLC
WHEREAS, Front Street on the Hudson, LLC (hereinafter refeffed to as the “Redeveloper’) has submitted to the Newburgh Community Development Agency (hereinafter referred to as the “Agency”) a Redeveloper’s Statement for Public Disclosure and Redeveloper’s Statement of Qualifications and Financial Responsibility (Form 6004) which the Agency has reviewed and found to be satisfactory; and
WHEREAS, the Agency has found the Redeveloper to be qualified and financially responsible to purchase and construct the improvements on disposition parcels IO, I IA, I IC, and 13 A; and
WHEREAS, the Agency has designated the Redeveloper as qualified and eligible to purchase the property and construct the improvements thereon- and
WHEREAS, the Agency has approved the sale of the property to the Redeveloper at a negotiated sale, pursuant to General Municipal Law, Section 507(2)(d), and has approved a disposition price of TWO HUNDRED THOUSAND ($200,000.00) DOLLARS; and
WHEREAS, the Agency has approved a Land Disposition Agreement and the form of a Deed of Conveyance and has authorized the execution and delivery thereof, subject to the approval of this Council- and
WHEREAS a Notice of Public Disclosure was duly published by the Agency; and
WHEREAS, a Notice of Public Hearing on said disposition was duly published and said hearing was duly held before this Council on February 23, 1998, at the time and place provided in said Notice, and all those wishing to speak in favor of or in opposition to said disposition having had an opportunity to be heard,
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Newburgh, New York as follows:
I . that Front Street on the Hudson, LLC be and hereby is approved as a qualified and eligible redeveloper to purchase and construct the improvements to the property in accordance with the redevelopment plan, pursuant to General Municipal Law, Section 507(2)(d).
2. that the proposed Land Disposition Agreement between the Agency and the Redeveloper for the disposition of the property for the negotiated disposition price of TWO HUNDRED THOUSAND ($200,000.00) DOLLARS is satisfactory and is hereby approved.
3. that the proposed Deed of Conveyance from the Agency to the Redeveloper is satisfactory and is hereby approved
4. that the proposed disposition of the property to the redeveloper is hereby approved.
5. that the execution by the Agency of the Land Disposition Agreement is hereby approved.
6. that the execution and delivery of the Deed of Conveyance by the Agency, upon the fulfillment of all conditions precedent to the conveyance of the property, is hereby approved.
Councilwoman Koisch commented that if Vinnie Clavio were here tonight, he would invite Nelson McAllister, and his family, down for dinner, and they would love it. (but not on a Friday night!) Councilwoman Angelo moved and Councilwoman Koisch seconded that the resolution be adopted.
Ayes-Councilwoman Angelo, Councilwoman Koisch, Councilman Rockafellow-3.
Noes-Councilman McAllister-].
Abstain-Mayor Carey-].
ADOPTED.
Feburary 23,1998, Council Meeting
RESOLUTION No. 39-98
OF FEBRUARY 23, 1998
A RESOLUTION APPROVING THE
DISPOSITION OF PARCELS 12A, 12B, AND 13B
EAST NEWBURGH URBAN RENEWAL PROJECT
NY R- 1 89 BY THE NEWBURGH COMMUNITY DEVELOPMENT AGENCY
TO JOSCOS, INC.
WHEREAS, Joscos, Inc. (hereinafter referred to as the “Redeveloper”) has submitted to the Newburgh Community Development Agency (hereinafter referred to as the “Agency”) a Redeveloper’s Statement for Public Disclosure and Redeveloper’s Statement of Qualifications and Financial Responsibility (Form HUD-6004) which the Agency has reviewed and found to be satisfactory; and
WHEREAS, the Agency has found the Redeveloper to be qualified and financially responsible to purchase and construct the improvements on disposition parcels 12A, 12B, and 13B- and
WHEREAS, the Agency has designated the Redeveloper as qualified and eligible to purchase the property and construct the improvements thereon, and
WHEREAS, the Agency has approved the sale of the property to the Redeveloper at a negotiated sale, pursuant to General Municipal Law, Section 507(2)(d), and has approved a disposition price of TWO HUNDRED THOUSAND ($200,000.00) DOLLARS- and
WHEREAS, the Agency has approved a Land Disposition Agreement and the form of a Deed of Conveyance and has authorized the execution and delivery thereof, subject to the approval of this Council; and
WHEREAS a Notice of Public Disclosure was duly published by the Agency; and
WHEREAS, a Notice of Public Hearing on said disposition was duly published and said hearing was duly held before this Council on February23, 1998, at the time and place provided in said Notice, and all those wishing to speak in favor of or in opposition to said disposition having had an opportunity to be heard,
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Newburgh, New York as follows:
I . that Joscos, Inc. be and hereby is approved as a qualified and eligible redeveloper to purchase and construct the improvements to the property in accordance with the redevelopment plan, pursuant to General Municipal Law, Section 507(2)(d).
2. that the proposed Land Disposition Agreement between the Agency and the Redeveloper for the disposition of the property for the negotiated disposition price of TWO HUNDRED THOUSAND ($200,000.00) DOLLARS is satisfactory and is hereby approved.
3. that the proposed Deed of Conveyance from the Agency to the Redeveloper is satisfactory and is hereby approved
4. that the proposed disposition of the property to the redeveloper is hereby approved.
5. that the execution by the Agency of the Land Disposition Agreement is hereby approved.
6. that the execution and delivery of the Deed of Conveyance by the Agency, upon the fulfillment of all conditions precedent to the conveyance of the property, is hereby approved.
Mayor Carey said she plans to abstain, not because she is against the project, but because she is against the process.
Councilwoman Koisch moved and Councilwoman Angelo seconded that the resolution be adopted.
Ayes-Councilwoman Angelo, Councilwoman Koisch, Councilman Rockafellow-3.
Abstain-Councilman McAllister, Mayor Carey-2.
ADOPTED.
