Newburgh Community Development Agency property

On April 16, 2009, attorneys on behalf of Elaine and Hector Lopez filed a summons and complaint in Orange County Supreme Court against the Newburgh Community Development Agency (NCDA.)  According to the complaint, on August 23, 2008, Ms. Lopez was on NCDA property and “was caused to trip and fall and sustain serious injuries solely as the result of the negligence and want of care of the Defendant, NEWBURGH COMMUNITY DEVELOPMENT AGENCY.”

Who is the NCDA?

The NCDA is successor to the Newburgh Urban Renewal Agency.  Its board consists of the City Council and Mayor, in accordance with New York State law.  Previously, the NCDA’s appointed administrator was Robert McKenna, who retired in December of 2008.

The subject of the NCDA came up at the last city council work session, with Acting City Manager Dwight Douglas requesting that the council use the NCDA as the “pass-through” agency to loan Kingston-Newburgh Enterprise Corporation funds to the Leyland developers for their Parmenter Street project.  The city council balked, refusing to have anything to do with the NCDA, and insisted that the KNEC funds be administered through the Newburgh Industrial Development Agency.

The council also refused to consider appointing Lourdes Zapata as administrator of the NCDA.

According to Newburgh’s Corporation Counsel Geoffrey Chanin, the NCDA does not have its own counsel, he is not their counsel, and, in the event that the NCDA gets sued, they would have to meet as a board and vote to appoint counsel.

Mayor Nick Valentine stated at a recent city council meeting that he believes the last time the NCDA met as a board was “about two years ago” to “transfer some property.”

Yet, in 2008 alone, two loans were issued by the NCDA in the amount of $10,000 each.  If the loan holders do not sell their properties, after seven years the loans turn into grants.  Two current city council members received similar loans in the past.  The mayor also received a NCDA loan some years ago, which he repaid.

According to the complaint, filed by the attorney Peter C. McMahon of the firm Bonacic, Krahulik, Cuddeback, McMahon & Brady, LLP, a notice of claim was served to the NCDA on October 28, 2008.  On January 7, 2009, “pursuant to demand by Defendant, NEWBURGH COMMUNITY DEVELOPMENT AGENCY, Plaintiff submitted to an examination under oath as required by General Municipal Law 50(h).”  Mr. McMahon’s receptionist stated that he would not take a call from the Newburgh Advocate.  Ms. Zapata did not respond to requests for comment.

The complaint filed April 16, 2009 states that the NCDA has 30 days to appear or answer (“if this summons is not personally delivered to you within the State of New York.”  No affidavit of service was filed with the court.)  “In case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the complaint.”

Who is giving the NCDA legal direction?  How can the NCDA act without the knowledge of its board?  How can it act without an administrator?

Will the NCDA respond to this complaint in a timely fashion, or default?