NCDA, NLDC, NIDA: all are in various states of legal limbo
The City of Newburgh has three public authorities: the Newburgh Community Development Agency (NCDA), the Newburgh Local Development Corporation (NLDC), and the Newburgh Industrial Development Agency (NIDA.) None of the three are currently engaged in the activities for which they were created, although the NIDA shows signs of life.
NCDA status: terminal
The NCDA was formerly known as the Newburgh Urban Renewal Agency. In its earlier years it had its own board and director, although it was later restructured such that the NCDA board became the Newburgh City Council. In recent years, the agency was essentially dormant, a mere repository for various parcels of land with a board–the council–that never held a meeting.
In 2008 Elaine and Hector Lopez filed a personal injury lawsuit against the NCDA. Ms. Lopez had fallen on NCDA property near the foot of South Street. Corporation counsel of the time Geoffrey Chanin wanted the city council to meet as the NCDA and empower Lourdes Zapata-Perez, the economic development director, to act on behalf of the NCDA. The majority of the council balked, refusing to take responsibility for another agency, although this refusal did not abnegate their responsibility.
The NCDA was also a delinquent agency according to the Authorities Budget Office, an oversight office of New York State. Required reports and audits were not submitted.
When Bernis Nelson became corporation counsel, she made it her goal to dissolve the agency and transfer the land and any other assets and liabilities to the City of Newburgh. While there were a few voices who questioned whether the NCDA could function as a land bank, Ms. Nelson prevailed, and the city council voted to dissolve the NCDA. (A land bank would later be approved by the city February 28, 2011; it is structured as a nonprofit with 4 city appointees and 5 non-city appointees, with representatives from the city’s nonprofits and other groups.)
The Lopezs have settled their suit, receiving $15,000 this past March.
All that remains is for the language in the state code to be stricken. The first bills that attempted to accomplish this were not successful. The bills were reintroduced under new numbers, and their current status is:
S4339 = A2815 07/11/2011 enacting clause stricken
S2845= A7064 04/11/2011 referred to local governments
NLDC: to be or not to be, ’twill write off debt
The Newburgh Local Development Corporation, or NLDC, is a delinquent public authority. A brief history and description of recent events with the NLDC, including correspondence from the ABO threatening censure, is here. The board of the NLDC, according to its bylaws, consists of the city council, the NCDA and the Newburgh Industrial Development Agency (NIDA). As such, it would be logical that the city council and the NIDA have responsibility for this entity.
Warned of potential censure by the ABO, NIDA Chairman Joshua Smith said the NLDC would be on the agenda for discussion at the June NIDA meeting. During that meeting, the minutes state that “Mr. Whyatt proposes convening a special LDC meeting at which the IDA members can vote as a majority on any actions it deems necessary, such as obtaining banking records, determining assets, etc.”
However, it is not apparent that any action has been taken. NLDC last appeared as an agenda item at the July meeting, but the chairman preempted discussion by saying there was nothing to discuss, and moved on to the next agenda item. It has not reappeared since.
City Manager Richard Herbek wrote in an email September 23 that the city “has no plans at this time regarding the LDC.”
One disadvantage to outright dissolving the agency would be having to deal with the outstanding debt of $416,716 the city owes the NLDC. This was money due to the NLDC following the purchase by the City of Newburgh of the old Broadway School to house its new courthouse; NLDC was one of the Den Cass partners who had owned the building.
Additionally, the December 31, 2006 Audit of the NLDC shows a debt to the NIDA of $752,540.
As mentioned in NYS Comptroller DiNapoli’s report linked to on the NIDA home page, and also in his report dealing specifically with LDCs here, local development corporations have recently been used as a legal way to fund civic facility projects, since industrial development agencies in New York cannot participate in such projects. For example, were the NLDC functioning, it could provide bonds to fund a civic facility project such as the Newburgh Armory Unity Center, or a project at St. Luke’s Hospital, or the Greater Hudson Valley Family Health Center.
At the county level, the Orange County Industrial Development Agency had the Orange County Legislature authorize the creation of an LDC on May 6, 2010 called “The Orange County Funding Corporation.” It was created precisely because of the problem the County IDA was facing in being prohibited from funding civic facility projects. In the preamble of the resolution it states:
WHEREAS, it is essential for the County to support the operation by both for-profit entities and not-for-profit corporations within the County to increase the employment opportunities for residents of the County and the ability to provide financing through the issuance of tax exempt and taxable bonds to projects of for-profit entities and not-for-profit corporations is essential to the continued development, construction, improvement and operation of projects by for-profit entities and not-for- profit corporations; and
WHEREAS, in furtherance of its public purposes, the County has supported the provision of taxable and tax exempt financing by the Orange County Industrial Development Agency (the “Agency”) and of certain other financial incentives to for-profit entities and not-for-profit corporations to promote the creation and preservation of employment opportunities for residents of the County and development of economically sound commerce consistent with the County’s burdens and responsibilities as expressed above;
The state has not looked favorably on the proliferation of LDCs, however, their use continues.
As for the NLDC, at this point it appears that the two responsible parties have no interest in either dissolving the corporation or in removing the corporation from delinquent status by submitting the proper reports and following the required legislation. Even the threat of censure has not been sufficient for the city council or the NIDA to take action.
NIDA: a pulse, but not full flesh
The board of the Newburgh Industrial Development Agency was the city council members, plus two appointees, until 2008, when an independent board was selected by the city council. The NIDA board happens to be all male, with seven board members. The attendance of the board for the past 12 months is as follows:
| 2010-2011 | Bedrosian | Curry | Gulliver | Maldonado | O’Shea | Penney | Smith |
| 9/1/10 | X | X | X | X | X | X | |
| 11/1/10 | X | X | X | X | X | X | |
| 11/15/10 | X | X | X | X | X | ||
| 12/20/10 | X | X | X | X | X | ||
| 1/27/11 | X | X | X | X | X | X | |
| 2/22/11 | X | X | X | X | X | X | |
| 3/21/11 | X | X | X | X | |||
| 4/18/11 | X | X | X | X | X | ||
| 5/16/11 | X | X | X | X | X | X | |
| 6/20/11 | X | X | X | X | |||
| 7/18/11 | X | X | X | X | X | ||
| 8/15/11 | X | X | X | X | |||
| PRESENT | 75% | 92% | 17% | 58% | 83% | 100% | 92% |
At the September 2011 meeting, attendance proved to be such a problem that three board members, the NIDA attorney Thomas Whyatt, three members of the Foundry Tenants’ Association (representing the public) as well as Consultant Teri Waivada, City Economic Development Director/Planner Ian MacDougall, a consultant, and recording secretary Kippy Boyle had to wait thirty minutes until an additional board member showed up so that a quorum would be made.
The ABO has declared that the NIDA is delinquent, and therefore cannot offer tax exemptions. They share this particular dishonor with four other IDAs; they are on the more egregious list of having not complied for the past four years:
The current list of IDAs that have not complied with General Municipal Law Section 859 for 2007, 2008, 2009 and 2010 is as follows:
- City of Oneida Industrial Development Agency
- City of Newburgh Industrial Development Agency
- Town of Erwin Industrial Development Agency
The agency has been working on achieving certification (with the reinstatement of the ability to offer tax exemptions) for the past four years, and at last week’s city council work session, Courtney Kain from the Planning Department stated that the agency should be certified “very soon.”
Until then, the public can access agendas and minutes of the NIDA meetings, and additional information about the agency, from its homepage.
The public can also attend the monthly meetings, although the NIDA does not permit any public comments. While not a statutory requirement, the Orange County IDA affords the public an opportunity to speak at the end of its meetings. Considering the impact that IDA projects can have on communities it would seem to be a breath of open government to allow such an addition to the agenda. At the September 2011 meeting, the three members of the Foundry Tenants’ Association had the mistaken impression that they would be allowed to voice some pressing concerns. This was vetoed by Mr. Whyatt.
Typically the number of attendees of these meetings can be counted on one hand, and it is difficult to grasp why these constituents may be seen but not heard.