The City of Newburgh issued a press release this morning announcing the appointment of Edward Lynch as the new Director of Planning and Development.  He will be taking over the post from Courtney Kain, who had served as Acting Director.

According to the press release (download here from the City of Newburgh site), Mr. Lynch comes to Newburgh after spending sixteen years with the Department of Development in New Rochelle, NY.

In New Rochelle, Lynch served under the Development Commissioner Craig King.  When the Development Commissioner position opened up following Mr. King’s leaving due to health reasons, and Mr. Lynch was not selected for the position, he tendered his resignation earlier this year.

Newburgh’s press release attributes New Rochelle’s development successes to Mr. Lynch:

The City has radically changed since then with mixed use transit oriented development downtown, including a 40 story Trump Condominium and a 1000 unit Avalon Bay residential development, a mixed use family entertainment center and significantly more commercial development. As Planning Director and Clerk to the Planning Board, Mr. Lynch obviously had a role in making a positive change.

But New Rochelle’s developments, attributed to Lynch or not, may not all be so rosy.

Trump Tower project lacks lessees; OSC audit critical

Talk of the Sound, a New Rochelle blog, reported on June 21 about a New York State Comptroller audit of the New Rochelle Industrial Development Agency due to be published this month.  The OSC audit portrays a lack of oversight.  Additionally, Talk of the Sound reports that in the case of the Trump Tower, developer Louis Capelli has failed to rent retail space:

The report goes on to state that NRIDA did not monitor the status of ongoing projects to ensure reasonable progress toward the projected benefits described in the original applications so the board cannot be sure the projects will meet their intended goals, or know when they should invoke “recapture” agreements to recover some or all of the benefits provided when projects fall short of their promised goals.

The Capelli organization is on the NRIDA agenda tomorrow, in part to seek extensions on its recapture agreement for Trump Tower which expired in December. A recapture agreement is a clause which allows the City to claim money if a project fails to meet some promise, in this case to lease the retail space at Trump Tower.

The Comptroller warns that when NRIDA officials do not properly monitor ongoing projects and invoke recapture agreements, as appropriate, there is an increased risk that other taxpayers are subsidizing the projects’ financial incentives without receiving the expected benefits to the community. This is precisely what has been occurring since 2009 with Trump Tower.

Read the full post here.

Trump Tower didn’t do much for jobs

Talk of the Sound also reports that the Trump Tower project, according to the Office of the State Comptroller, failed to create the jobs it promised:

The report notes that NRIDA projects have, overall, failed to provide promised job gains for New Rochelle. In particular, Parcel 1A (Trump Tower) was supposed to deliver 358 jobs but has, as of December 31, 2008, delivered just 98 for a net deficit of 260.

Newburgh: New Rochelle North?

Mr. Lynch is not the first New Rochelle expatriate to join the City of Newburgh.  Current Corporation Counsel Bernis Nelson served as New Rochelle Corporation Counsel for twelve years (then under the name Bernis Shapiro.)

Newburgh, NY -  On Saturday, June 26, Congressman Maurice Hinchey (D-NY) and the Newburgh Free Library Job Information Center will host a workshop to provide information on free employment and education training programs available through the Delaware Valley Job Corps (DVJC).  The presentation will occur from 10:00am to 12:00pm at the Newburgh Free Library located at 124 Grand Street in Newburgh.  Since 1979, the Delaware Valley Job Corps has been providing critical job skills to 16 to 24 year olds while helping them earn a high school diploma or GED.

“The education, career training and job placement services offered by the Delaware Valley Job Corps can be life changing for young people who take advantage of this essential program,” said Hinchey. “Even though the Job Corps is located one county away from Newburgh, very few residents of the city are fully aware of all the advantages the program has to offer.  That’s why I am delighted to host this event – to ensure that those who live in the city have the information and assistance they need to successfully apply for and participate in this no-cost program, which has already benefited so many young adults.”

Participants in the program live on campus in Callicoon, New York while receiving training in trade fields including: advanced manufacturing; business technologies; carpentry; culinary arts; facilities maintenance; material handling; medical office support; security; automotive repair; construction; and, electrician support.  Despite the program’s proximity to the City of Newburgh, last year only two residents of the city took advantage of the program, which accepts nearly 400 students annually.  The vast majority of participants are from the New York City area.

In addition to job skill training, the DVJC can help participants attain a high school diploma or GED.  The program also provides free room and board, a cash stipend, basic health and medical services and job placement assistance.  The services are available free of charge to qualified applicants and are funded through the U.S. Department of Labor Job Corps program authorized under the Workforce Investment Act of 1998, which Hinchey strongly supported.

Those looking for additional details on the event should contact Hinchey’s Middletown office at (845) 344-3211.  More information on the program is also available at the DVJC website: http://delawarevalley.jobcorps.gov.  Job Corps representatives will be available to schedule application orientations to interested individuals following the presentation.

It was a long session today for the Orange County Industrial Development Agency Board Meeting––including a lengthy pitch at the end that was not on the printed agenda.

The last pitch was presented by Orange County Choppers Senior Vice President of Marketing John Sohigian.  Immediately prior to this, IDA Chairman Jim Petro made an announcement about an article 78 lawsuit that had been filed against the board by Chester Supervisor Steve Neuhaus (excerpt below from today’s Record article):

Neuhaus charges in court papers filed Monday that board Chairman James Petro asked a C&S vice president to “backdate a letter saying that C&S would leave Orange County” unless it got a 15-year, property-tax break the agency had approved in December.

Petro advised the board members to direct any inquiries to their attorney.

Biker dreams

Chairman Petro began with a justification for what he estimated would be a $75,000-$85,000 expense.  He used the explanation at the header of this post, and throughout the discussion returned to the phrase that the board would “not even be spending the money” because they would be getting something in return.

The chairman handed the presentation over to Mr. Sohigian, who elaborated that in addition to the custom-made Orange County Industrial Development Agency motorcycle, the board would be getting much, much more.  The building of the bike would be featured on an Orange County Choppers episode on The Learning Channel (pending TLC approval.)  Choppers patriarch Paul Teutul Sr. would grace a public presentation, for no more than two hours.  (This would also include first-class transportation for two people, perhaps in addition to the bike cost.  It was not stated by Mr. Petro whether this additional cost would be like not spending any money.)

The board was impressed. The Orange County IDA could be beamed into over 100 countries around the world.

Then Mary Ellen Rogulski, Second Vice Chairman of the board, spoke.  (Earlier in the meeting, when Mr. Petro had asked “What do you think, boys?” on an issue, she had softly protested that the board was not just boys, although Mr. Petro did not hear her.)

“I think it’s an interesting idea, but… the first thing that popped into my head was, it’s taxpayer money.  I mean, I think you can get a lot of bang for your buck, and I agree with all the business things, but I think you’re going to open yourself up to a lot of criticism.  Or you have the potential to…”

Petro said it would be considered advertising.

The OC Choppers SVP stepped in with an explanation of depreciation ideas, and that the money would somehow be returned to the IDA.

OC Choppers has already received incentives from the IDA, and earlier on the agenda they asked for a sales tax exemption on building materials as well as a PILOT for their latest proposal, the addition of a restaurant called “Roadhouse” to their OC Choppers complex in Newburgh.

The announcement regarding the lawsuit, and the Orange County Choppers discussion, is below, or can be downloaded:

Seen in the Times Herald-Record classified section “new today:”

“Director of Planning & Development. City of Newburgh, NY. Opportunity for innovative, motivated and creative individual to guide redevelopment efforts in historic river city.  Must have Masters & 2 years exp in economic development, real estate, public relations or related field.  Starting Salary $86,889. Excellent benefit pkg.  Send resume with cover letter to mmmills@cityofnewburgh-ny.gov by Feb 17th, 2010. EOE”

This is the search that was first issued last year, that by some accounts garnered over 100 resumes.  City Manager Herbek had said he “wasn’t very impressed” with those resumes at the January Lyceum meeting, and that the Director of Planning and Development position wasn’t his top priority.  Currently Courtney Kain is Acting Director of Planning & Development.

What changed?

And if someone already submitted a resume, should they submit again?

On Tuesday, January 26th, the Newburgh Zoning Board of Appeals heard a presentation in which William Kaplan asked for a variance for his proposed housing development on waterfront land adjoining his Regal Bag Building.  Assisting Mr. Kaplan was Lou Marquet from the Leyland Alliance, in addition to an attorney from Jacobwitz and Gubits.  Kaplan explained he had hired Leyland to assist in the planning process and gaining approvals from the city.

Kaplan began with the history of the Regal Bag Building, before launching into a description of the proposed buildings.  Throughout, he emphasized that the variance was needed to make the project financially viable.  He compared it to other Newburgh projects, stating that “the Foundry is floudering… Ferry Crossing went bankrupt twice… Voisons, that went bankrupt…” until IBM and Kaplan brought Voisons back.

Claims project would bring $2M in taxes

Kaplan reiterated the financial advantages of approving his project, chief among them the $2M addition he claims the project would bring in taxes.

Mr. Kaplan did not sugarcoat his view of the reality facing developers in Newburgh.  “We are starting a project at the worst time in the country in one of the worst cities in the country… we have a bankrupt city right now.  You all know it, I don’t have to tell you.  With no chance of getting anything in here except Ray’s putting up some buildings there [referring to Ray Yannone's Colden Street project].  But there ain’t nothing else going on and there ain’t going to be anything else going on for a very, very long time.”

Public comments were only in favor of project

Several people spoke during the public comments period, including above-mentioned Ray Yannone and Chris Colombo, whose children are partners with Yannone on the Newburgh Train Station renovation.

Also speaking in favor of the project was Dick Polich of the Yellow Bird Gallery building.

Variance decision postponed until next month’s meeting

Because several board members were absent, and also due to the too-brief period board members had to review the proposal, a final decision about the variance was postponed until next month’s meeting.  One part of the variance request involves waiving a need to build over 100 parking spaces.

Full video coverage of the meeting is posted below (or access the video directly at this link.)

Attendees of the Newburgh City Council work session this past Thursday might have had a funny “Back to the Future” feeling when Neil Novesky was invited to the table.  The council was vetting Novesky and his wife Elizabeth to serve as CDBG consultants under Courtney Kain, Acting Planning Department Director.   Community Deveopment Block Grant (CDBG) funds are given to the city from the Department of Housing and Urban Development with the goal of improving conditions “principally for low- and moderate-income persons.”

Mr. Novesky was an employee of the City of Newburgh’s Development Department from 1983-1986.

As Novesky stated during his interview, it was a time of many “UDAGs” – Urban Development Action Grants, including what was to become the Key Bank Building at the foot of Broadway, and the selling off of Broadway School to several partners, including then consulting engineer Bill Hauser.

Later Novesky and his wife would work for the City of Middletown (as of this posting their website still lists Novesky as Community and Economic Development Director.) Novesky, along with Middletown Mayor Joe DeStefano and City Court Judge Rich Guertin, were the three defendants of the corruption trial that forced DeStefano out of office.  Novesky and Guertin were found not guilty on all counts in April 2005.  Novesky continued working during the trial and through the mayorship of Marlinda Duncanson, tendering his resignation December 4, 2010––just before DeStefano would return to office.

During the Noveskys interview Thursday night, Neil did the talking.  He said he would focus on large economic development projects, and try to set up revolving economic development loans with CDBG funds.  Toward the end he made mention of a nonprofit he and his wife work for.  He spoke softly, and I couldn’t quite catch if he stated the nonprofit’s name.  After their presentation, they made a swift exit, and I ran after them, catching them at the top of the stairs.

“You mentioned you work for a nonprofit.  What is the name of it?”

“CIDC.”

“Loewenstein?” I asked.

“Yes.  He pays on a per diem basis,” Novesky answered.

Have we met before?

It’s hard to tell when Mr. William Loewenstein began his consulting relationship with the City of Newburgh.  Back in 1982, the City passes Resolution No. 6 on January 25 by which the “National Development Council of Hudson, New York” is contracted to provide economic development assistance for $35,000 per year.  In later publications, Loewenstein is identified as a consultant with NDC.

Loewenstein was one of the signatories of the incorporation papers for the Broadway School partnership “Denn Cass”––a deal that profited some of the partners, if not the city’s local development corporation.

Loewenstein continued his consulting relationship over the years in Newburgh, more recently through his nonprofit CIDC – Community Initiatives Development Corporation.  He was also a consultant to the City of Middletown, and indeed, gave grand jury testimony in the aforementioned corruption trial.

The Newburgh IDA ended its relationship with CIDC when a new board was seated, after talks with CIDC representative Ed Schorno in 2008.

CIDC Courthouse Deal

CIDC is a controversial name in Newburgh in part because of the city courthouse deal with terms such as triple-net-lease proposed by Loewenstein.  At the time (2005) Loewenstein was a financial consultant to the city, he proposed that his nonprofit be the funding vehicle for the construction of the new courthouse.

Antony Takahashi, who then lived in Newburgh and worked as a financial analyst for IBM, did an evaluation of the terms of the contract.  The Times Herald-Record quotes Takahashi saying he would never recommend the deal to his bosses. “Not in good conscience.”

Full video of the CDBG discussion, including interview with the Noveskys:

There have been reports of problems with the video embedded below. To access the video directly, go here.

Ms. Kain indicated that the city hoped to acquire the land “for free.”

After her presentation, Ms. Kain provided a diagram of the proposed use (click here for the diagram) should the city take possession, including potential consolidation of municipal offices, recreational facilities and a business incubator.

How unfortunate that Senator Larkin, County Executive Edward Diana, and even Mayor Nick Valentine and Councilwoman Regina Angelo could not have foreseen this dramatic turn of events three years ago, when there was a tsunami of lobbying going on for certain potential sites for the Newburgh branch campus of Orange County Community College.  Read about that background here, here, and here.

The citizens certainly knew that the Armory was the cheapest site, with the most available parking, back in 2006.  Yet for some mysterious reason, the site was not politically expedient.

For old time’s sake, here’s a slide from Antony Takahashi’s powerpoint presentation, which compared the alternative sites:

Mid-Broadway Business District (former Carchietta properties)

There’s a new district in town – the “Mid-Broadway Business District,” christened by Assistant City Administrator Courtney Kain.  The properties were formerly known as the “Carchietta lot,” the vacant site on the North side of Broadway.  The City is planning on issuing a RFQ to selected parties to come up with a plan – “new construction,” according to Interim City Manager Dwight Douglas.

Will the RFQ mention asbestos and lead abatement?

Not discussed was the potential place of the Newburgh Inudstrial Development Agency with regard to these properties.  Perhaps this will be a discussion item when the IDA meets with the City Council at the Council’s work session on August 13th.  The RFQ would already be issued by that point – Douglas is aiming for July 24, with a return date expected to be the last week of August.

Also, a funding mechanism of the past – KNEC – was mentioned; Douglas made a reference to $200,000 of KNEC funds with regard to expenses for the disposition of property.

Post-meeting follow-up: Ms. Kain explained the Carchietta properties were taken back through In Rem proceedings, and the judge signed an order passing them to the city about two weeks ago.

Full audio recording of the work session meeting is available here.

So said Newburgh Industrial Development Agency board member Jerry Maldonado, upon hearing that the developer Robert Carchietta is requesting additional city property through a proposed agreement with the city council – even though Mr. Carchietta is currently in foreclosure for the Broadway property he already obtained from the IDA.  The IDA board was discussing the status of Carchietta’s project at their meeting Monday evening, January 5.  The Broadway lot looked like this in 2006:

Not much has changed in two years.  The lot is still empty.

According to Lourdes Zapata, IDA Adminsitrative Director, a benchmark was set by the IDA that Mr. Carchietta would, by December 30, 2008, obtain a “C of O” for the project – a certificate of occupancy.

“Clearly, he’s missed all of those benchmarks,” said Ms. Zapata.
[Video deleted]

Ms. Zapata said that Mr. Carchietta would go before the city council at the second work session in January.

With regards to the foreclosure action, board member Michael Curry wondered “if [the IDA] has been named as a defendant, has there been an attempt to serve us?” Ms. Zapata did not know.  Mr. Curry suggested the IDA write a letter to the council “saying that we have interest in that propety, and we do not wish to see it bundled with any new property without further action from [the IDA].”

Is the IDA on the hook for Carchietta’s foreclosure?  They were a signatory on mortgage documents, as previously reported here.

Ms. Zapata says no. “From the conversations with Bob [Robert McKenna, former IDA director], it’s really just because the IDA does hold some reverter action authority to it, not because M&T is taking action against the IDA.”

“And is the city considering any legal action against the holding company [Carchietta]?” – Maldonado.

“I don’t believe so.” – Zapata.

“Why not?” – Maldonado.

Ms. Zapata said she would have to find out.

Let’s not forget to test for asbestos and lead

Following the main discussion of Mr. Carchietta’s situation, IDA board member Joshua Smith advised that should the reverter happen, they should be concerned about “how clean that site is… whether it was remediated for lead paint and asbestos.”
[Video deleted]

Unanimous Call for State Comptroller Audit

In the second hour of the meeting, Joshua Smith called for an audit of the IDA to cover the time period 1998-2008.  After some brief discussion, the resolution was approved by the board unanimously.

[Video deleted]