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.