Orange County IDA Attorney Philip Crotty reads the Newburgh Unity Armory Center Resolution by flashlight
Excerpt from the August 17, 2011 Orange County IDA meeting pertaining to the Newburgh Armory Resolution
Philip Crotty, Orange County IDA Attorney: The Newburgh Advocate raised some questions about the way we were disbursing the grant to the Newburgh Armory1. We discussed the matter among the three of us, Jim Petro, Jim O’Donnell and myself, and decided to ask for a legal opinion from the former county attorney, Rick Golden, who is a lawyer’s lawyer, frankly. He handles a lot of appeal work. He provided the opinion back to us during the past month, and suggested that we take a project, expressly because they are tourism related, like the Armory, and the Hall of Fame of the Trotter, the Firehouse in Montgomery, and those projects are tourism related, and they’re also in the realm of construction, reconstruction, or equipment, as distinguished from soft cost type things. These are bricks and mortar type operations. In the case of the Armory, bricks and mortar, and maybe basketball hoops.
So those projects are okay, for us to fund, but we should be funding them in one of two ways. Either pay the money to the municipality that then distributes it to the not-for-profit organization, that would be the City of Newburgh, or, better, to make the arrangements, the payment arrangements directly with the contractor, and have the contractor submit the voucher to us, we pay the voucher, and that’s the way he suggested that we handle it.
So with a view toward that I revised the resolution that we adopted last month, and if you’d like to call for a vote on that…
Jim Petro, Orange County IDA Chairman: Let me just do it real quickly in layman’s terms, not that you didn’t do a good job of it, though. Basically, if they put a new floor in, in the Armory, and they put their grass floor in and it’s $77,300, they would give us the bill for that, and the IDA would make the check out directly to the company that’s billing the $77,300. We would apply that towards the value of the $100,000 grant. And we would keep track of it in Laurie’s office, and when we get to that point, that’s what they would have coming.
But what I’m concerned with and always been concerned with is when we give out grant moneys and it doesn’t go to exactly what we’re suggesting that it went to, or the grant was requested for, and you know how I am with seed money, people live off seed money, so now…
[POWER OUT]
Petro: Somebody should have paid our own grant.
Michael DiTullo: The building lost its power. So something must be going on.
Petro: So, you know what, let’s forget the darkness for a minute, and let’s finish this up while we’re all… Can you read that, Phil? You can’t see it.
Crotty: Well, I have a flashlight in my car, except [inaudible… multiple voices] Shall I continue?
Petro: Yes… I think everybody understands what I just said, right? So I think that’s the way we’re going to do it.
Crotty: Now therefore, excuse me, I’m not going to read all the “whereas”s as they’re the same as the last time, so it’s only the revised “resolved” paragraph.
Now therefore, be it resolved that this IDA authorizes a project expenditure to Newburgh Unity Armory Center, Inc. in the amount of $500,000 to be paid in installments over a five year period commencing in 2011 and not to exceed $100,000 per year directly to support financially the construction, reconstruction, and improvements of the Newburgh Armory Building, or to furnish, equip, and maintain the building in order to advance the project activities intended to occur by operation of those activities and through a license agreement between the CIty of Newburgh and the Newburgh Unity Armory Center, Inc. and subject to matching grant from the Kaplan Foundation and the 25 year license agreement between the City of Newburgh and the Newburgh Unity Armory Center and the IDA standard agreement.2
Board member: So moved.
Board members: Seconded.
…
Crotty: Resolution Adopted, 5 Ayes.
Brescia: Is this going to be paid directly to the contractor though?
[Unidentified]: Yes.
Newburgh Advocate Notes
1 The questions raised by the Newburgh Advocate (here, here, and here) were not regarding the methods of grant disbursement by the Orange County IDA, but whether it is permissible for an IDA to give a grant at all. The only situation in which this appears to be allowed is when a federal grant is awarded to an IDA and the IDA acts as a pass-through to give grants, assuming that the federal grant permits this. This scenario does not apply to the Armory Grant.
2 The revised resolution does not use the term “grant” but instead “project expenditure” to describe the financial arrangement between the Orange County IDA and the Newburgh Unity Armory Center. If the OC IDA is successful in evading the grant prohibition, it remains unclear as to how it evades the prohibition against IDAs participating in civic facility projects.
Additional questions
There are certain requirements an IDA must meet for projects of financial assistance exceeding $100,000. Since the Newburgh Armory Grant/Project is a commitment of $500,000, wouldn’t the Orange County IDA have to follow these specifications? This would require a public hearing, as well as the IDA describing the project and the financial assistance.
Why not call the New York State Comptroller’s Office for an opinion regarding this?
Kudos to the OC IDA
The agenda for the monthly meeting this August was posted about a week in advance on the County’s website. Maybe next month the committee meetings agendas could be posted, too.
Youtube video of Armory discussion transcribed above:
Youtube video of the OC IDA Governance Committee Meeting, 2 p.m. 8/17/11:
Youtube video of the full OC IDA Board Meeting, 3 p.m. 8/17/11:
