Category Archives: Newburgh Landbank

Newburgh’s total dependence upon real estate

I read with interest this letter to the Times Herald-Record editor written by Hhans C. Sandiford of IOTAPLIST1, Inc., which was in response to the December 10th article about the City of Newburgh streamlining the process of pricing city-owned real estate.   Mr. Sandiford agreed with City Councilwoman Cindy Holmes, who was quoted in the original article, as stating that the city should “get out of the real estate business.”

It is curious to me that neither the original article nor the letter to the editor makes mention of the Newburgh Community Landbank.  One of the reasons landbanks traditionally are created, as in Michigan, has been to “do a better job” than the original municipality at disposing of unwanted real estate, and to prevent the sold properties from rebounding back into city hands due to delinquent taxes or other reasons.  The idea was that real estate professionals, people with expertise at planning projects and putting together successful deals, would have a better track record through a landbank instead of city officials doing their best.  (Of course, whether Newburgh’s landbank fits this description of superior performance, I am not qualified to say.)

As another note, it should be clear that the city will always be in the real estate business, even if the landbank handles 100% of reclaimed properties, because that is just the nature of the stewardship of government.  It goes with the territory.  Death… and property taxes.

Public Authority Roundup: Newburgh Land Bank, IDAs etc.

Newburgh Community Land Bank Misreports Staffing

The Newburgh Community Land Bank is getting a bit of a press buzz for its recent spot on NPR–in particular, “Executive Director, Madeline Fletcher.”  Ms. Fletcher has worked for the NCLB for several years.

However, in the Authorities Budget Office Annual Report on Public Authorities in New York State, issued July 1, 2014, on page A2, “Authorites that indicated No Staff in 2013,” is listed the Newburgh Community Land Bank.

Contradicting this is NCLB’s 2013 Financial Report, which lists “Consultant Fees” of $64,167.

The ABO provided this response:

Newburgh Community Land Bank reported having no staff in the Public Authorities Reporting Information System (PARIS) in 2013.  Staff working at the authority but being paid, in whole or in part, by another entity, or staff working at the authority pursuant to a personal services contract with another entity should be listed as staff, as well as individuals whose salaries are being reimbursed by the authority. This is a common reporting error that we come across when we perform reviews on authority information in PARIS.

Data presented in the tables in the 2013 Annual Report is as reported by public authorities. While the ABO attempts to identify significant data discrepancies, it cannot verify the accuracy of all of the information reported. Thank you for bringing this to our attention.

City of Newburgh Local Development Corporation Still in Limbo Land

Another interesting find in the ABO’s annual report was that the city’s LDC is still alive–even if just barely.  There’s a footnote indicating that the ABO is aware that the city has decided to dissolve the entity, but as of yet it has not done so.  It was March 2013 when I wrote this post about dissolving the NLDC, which then City Manager Herbek was endeavoring to do.  The IDA and the City Council must feel no urgency to take care of this little bit of housekeeping, to let the years fly by without a second thought.  Technically, the NLDC should be reporting each year if it is still in existence.

LDCs and IDAs Reform

Another highlight from the annual report begins on page 49, information about Assembly bill A.9773 introduced May 2014.  This is a collaborative product of the ABO, the legislature and the Advisory Task Force on Public Authority Reform.

 

No conflict of interest, NYS Comptroller’s Office says

Yesterday I had a long email exchange with Madeline Fletcher, the Consulting Director for the Newburgh Community Land Bank, covering various topics including the issue of conflicts of interest.  I had asked her if anyone had ever covered Karen Mejia’s situation since she serves as a councilperson but she also has a part-time job with the Greater Newburgh Partnership and sits on the Newburgh Community Landbank as the council’s representative.  Ms. Fletcher was not immediately aware of anything.

I decided to contact the NYS Comptroller’s Office to see if they could help, and, as it turned out, they could.  Brian Butry from the press office cited these two passages from NYS code :

Not-for-Profit Corp Law § 1605. Board of directors.
(c)  Any  public  officer shall be eligible to serve as a board member
and the acceptance of the appointment shall neither terminate nor impair
such public office. For purposes of this section, “public officer” shall
mean a person who is  elected  to  a  municipal  office.  Any  municipal
employee  or  appointed  officer  shall  be eligible to serve as a board
member.
***

http://www.osc.state.ny.us/localgov/pubs/gmlposter.pdf

GML § 802. Exceptions. The provisions of section eight hundred one of this
chapter shall not apply to:
1.  ***
f. A  contract  with  a  membership  corporation  or  other  voluntary
 non-profit  corporation  or  association  including, but not limited to,
rural electric cooperatives….

 

In other words, from the first passage Ms. Mejia is eligible to serve on the landbank board even though she is a councilperson, and from the second passage, the “exception” it is referring to is conflict of interests enumerated in the previous passage, therefore, since the Greater Newburgh Partnership is a non-profit corporation it is exempt from the conflict of interest problems.

 

In pictures: Newburgh Community Landbank Meeting 4/16/14

AGSueSullivanThe meeting began with Sue Sullivan from the Greater Newburgh Partnership introducing a man from the state government who explained various timeframes for funding that could be applied for by the landbank.  (My descriptions are vague due to acoustic limitations as I will explain further below.)

audience

“What’s that you’re saying?”–well that’s what I said, anyway, as it was impossible to hear much of the discussion without the board using microphones.  Here’s a shot of the audience on the other side of the room.

CMnFC

After asking once, I asked again and called out City Manager James Slaughter and Fire Chief Michael Vatter that they should be ashamed of themselves that between the two of them they were incapable of opening the closet that houses the microphone controls.  They promised to look it up for future meetings, and as a temporary solution for this meeting invited anyone having difficulty to the table.  I pulled up a chair.

unitex

Board members.  Most of the meeting was spent listening to very early pitches by potential developers.  I wish I could tell you more but those pretty little things on the table are just cosmetic, they don’t actually work as microphones!

Karen

More board members.  The conflict of interest updates agenda item was nothing to get excited about, just filling out a routine form.  Madeline Fletcher directed me to the landbank website to see the existing CoI form, but I can’t locate it anywhere.  I have emailed her and asked for a copy, as well as asking her if anyone has ever formally addressed the issue of Karen Mejia serving on Council, having a consulting relationship with GNP, and serving on the landbank for the council.  I’ll keep you posted.

Bklyn

These guys, sorry not perfectly photographed in all their Brooklyn glory, anyway they were the last presenters who maybe might be interested in developing a bunch of properties.  The two guys before them, two individuals who went up to the table consecutively, I could not hear anything at all.  Now I know how my deaf father feels.  So I don’t know what to tell you.

But, I think the idea of landbanks, and here we have the gap between theory and practice, the idea is that landbanks should bat better than average of your general municipal land disposal arrangement, because landbanks are Specialists who Handpick just the right projects and developers for each property they have, no matter how dilapidated or sad.  What seems to be going on at this meeting anyway is the landbank is just so grateful that anyone at all is expressing interest, they’ll go along with that.  Of course, I could be wrong about this, because after all, I was auditorily handicapped for more than half of the meeting.

At any rate, there was some dissension in the ranks, as the guys pictured above wanted restaurants and bars and multifamily housing and they just love Beacon and you can buy wine there, good wine for $15, to be interrupted by Karen Mejia with sharp words in an anti-gentrification speech about not pushing out the existing population.

To. Be. Continued.

Institution creep

Last month Mayor Judy Kennedy performed a couple “snow jobs”1 or undertook some “astroturfing”2 depending on your preference for turn of phrase.

On August 8, there was this press report to YNN, “City of Newburgh Not in Financial Trouble,” in which she boldly claims that “The truth of the matter is Newburgh is not in financial trouble.”

Backing her up was positively Clintonian acting city comptroller (since replaced by new hire Aber).  “We’re in confident control of the city financial and the 2010-2009 crisis is behind us, and so that’s what I know I’m looking to do is change that perception of the city financials, of what it was to what it is,” [empahsis added].

This seems like preposterous public relations machinations, in particular because some departments are critically understaffed, such as the Department of Public Works, which suffered scores of layoffs during the chaos of the past few budgets.

Then on August 19, the city made the YNN news report again, this time singing a happy tune that “Major crimes on the decline in City of Newburgh.”

A more measured Mayor Kennedy (there were complaints, after all) still painted a joyous picture of the ‘Burgh: “We keep making the city safer. We got a long ways to go and we’ve got work to do, but incrementally, we’re heading in the right direction.”

Can we thank the Greater Newburgh Partnership for these fluff articles?  I don’t know, they don’t return my emails, or at least the email in which I asked for the meeting dates and times of the City of Newburgh Re-Zoning meetings.

Public relations for the City of Newburgh is something that GNP definitely wants to micromanage, to paint the picture of a wonderful place with no problems that aren’t swiftly swept into the sweetly-smelling sewer.  (For more on this, and why  I think this is a toxic strategy, see my recent post, here.)

So we should all be jumping for joy with today’s news, that the “Newburgh Fire Department receives $2.4 million grant.”  That’s to hire 15 more firemen.

The GNP should be happy!  The fire department now handles code enforcement, and with the cozy relationship with Chief Vatter serving on the Land Bank, also dominated by the GNP, this will be extra forces to carry out selective code enforcement (read: prioritizing the big local institutions at the expense of the rest of the city.)  St. Luke’s CEO Allan Aztrott likes to brag a about how the hospital staff has helped Newburgh by doing the grantwriting for the big Re-Zoning project (still no update on the city’s website! Huh!) and grantwriting for other city projects, so it would not surprise me at all if the GNP actually did the grantwriting on this one, too (although I can’t confirm that. Remember, they don’t LIKE me for some reason.)

Now, for many years I have been saying that the major nonprofits of Newburgh should contribute a PILOT to the city.  I’m talking about the huge nonprofits, such as St. Luke’s Hospital, Mount Saint Mary College, maybe even SUNY Orange, although I’d have to think more about that last once since it is a publicly funded institution.

As it turns out, and I did not know about it until recent years, St. Luke’s Hospital–which, in the form of Allan Aztrott, has always expressed violent disdain at the thought of a PILOT–well, they have been “helping” the city in their own, selfish, self-interested rather, way.  They have helped when it will be expressly in their self-interest.

The beauty, the magic and mystically amazing thing about TAXES is that when you give them, you do not have the ability, right, or input to say what that money will be used for.  Perhaps you can influence public policy in other ways, if you feel strongly about it, by writing a letter to your representatives, or speaking at a public comment period, or writing a letter to the editor.  It would be the same with a PILOT.

Instead, what we have here in Newburgh is “institution creep”–the Greater Newburgh Partnership is directing the public relations, the grantwriting, and many major decisions for the city at large.

Meanwhile, I am not the only one whose phone calls are unreturned by Mayor Kennedy.

Oh, and by the way, another news item, this one from midhudsonnews.com: “Violent crime up in Newburgh last year.”

From the article: “Violent crime in the City of Newburgh was up four percent in 2012 compared with 2011, Police Chief Michael Ferrara said Thursday.”

Back to those extra 15 firemen; what happens when the grant money runs out?

What about the Police Department?  What about the DPW?

I guess they are not so obviously useful to the Only Institutions That Matter.

____________________________________________________________________

1. Snow job (google definition): a deception or concealment of one’s real motive in an attempt to flatter or persuade.

2. Astroturfing is the practice of masking the sponsors of a message (e.g. political, advertising, or public relations) to give the appearance of it coming from a disinterested, grassroots participant. (Source: Wikipedia.)

Land Bank: It’s Just the Beginning

Wednesday afternoon the Newburgh Community Land Bank held their monthly meeting.  Their Consulting Director, Madeline Fletcher, as well as their consultant from Pace’s Land Use Law center, Jessica Bacher, met with me prior to the meeting and they responded to some of the concerns I raised in my earlier post, as well as answering some additional questions.

Size of Land Bank

Fletcher pointed out that the land bank does indeed include the entire City of Newburgh.  Carefully reading the application submitted to ESDC supports this.  While it is true that a small section of the city was chosen as the “target area,” nothing prevents the land bank from operating city-wide.

The subject of the size of land banks came up during the board meeting.  Allan Aztrott brought up the possibility of collaborating with the county, although this remained a point of speculation.

Targeted Enforcement

In speaking to Fletcher and Bacher, I asked them what was meant by the commitment of the city, as described in the land bank application, “to concentrate its police and code enforcement efforts in this target area to ensure the success of the Land Bank’s operations.” They described that what usually happens is “passive” enforcement, where code enforcement responds to calls for help.  What  concentrated or targeted enforcement might entail is more proactive approaches to code enforcement.  The women explained that this has not happened yet, and that two consultants are completing a study of the city currently to make recommendations on code enforcement, and that this study will help shape future actions.  They did not give me an explanation of what targeted police enforcement would be.

Revenue Streams

While I bemoaned the lack of pursuing alternative revenue streams, such as collection of tax liens, Ms. Bacher provided the explanation that Newburgh actually does a very good job of servicing tax liens, and thus this would be an unlucrative option for the Land Bank to pursue.

Another potential source of diversified income would be rental money.  During the board meeting, a substantial portion of the discussion was focused on the HOGAR properties, which are now in foreclosure and subject to legal action by the city, Key Bank, and the county.  These are a few properties on Dubois Street that were rehabbed and put on the market with great fanfare a few years ago.  The city had invested several hundred thousand in a Restore grant at the time.  After the pending legal actions are settled, the land bank’s hope would be to possibly acquire the properties and, due to the soft market, use them as rentals.

Budget

In a follow-up email, I asked Ms. Fletcher if she could share a more itemized budget than the brief and confusing one in the ESDC application.  In our pre-board meeting, she did confirm that the land bank had indeed received a $100,000 grant from the Ford Foundation.  In my email, I had asked specifically for something that would breakdown what the separate in-kind contributions were from the various entities (city, Greater Newburgh Partnership, and St. Luke’s Cornwall Hospital.)

Ms. Fletcher responded that, “At this point, we do not have a better budget to offer. We are working on breaking things down further and will be happy to provide when we’ve firmed it up better.  We still have to figure out exactly what consulting we need, etc.  As we go, our expenditures will be more refined and we will firm up the budget.  At this point, we know roughly what resources have, we have to fine tune how they are allocated as our expenses become clearer.”

Cryptic Parting Remarks

As I left the table with Fletcher and Bacher just before 4 p.m., as our interview was concluded and the board meeting was about to begin, Allan Aztrott introduced himself to me and provided a one page summary of the hospital’s 2011 budget.  I’m not sure what I was supposed to do with this, and anyway, if you are interested in the hospital’s finances you can access their tax returns from the Foundation Center’s 990 Finder and/or an even more complete accounting statement from the NYS Attorney General’s Charities Bureau website (although both sites have the information posted for 2010, not 2011 yet.  Keep checking.)

Mr. Aztrott provided some pleasant facts about the hospital and then asked why the Newburgh Parking Tribunal had finally passed in Albany.  “I don’t know,” I said.  And he pointed out that it was the hospital’s lobbyist that lobbied for it.

Sure enough, you can look up the New York State Joint Commission on Public Ethics’ website, click on “view a filing,” and with a little effort you can find all the bills that the hospital and/or the Greater Newburgh Partnership has lobbied for, and the lobbyists they employ.

Mr. Aztrott also bragged that the hospital provided grant writing services to various city grants, including the Fire Department and FEMA-related.

Should this mean that the hospital owns the city and dictates public policy?

It is a delicate question.  The city council was distraught at Thursday night’s meeting when the subject of PILOTs came up.  Having gone to school in New Haven at Yale, I am familiar with the intricate relationship that can exist between a major nonprofit and its city, which in this case includes a PILOT.

But contributions can take many forms.  Is grantwriting ongoing?  How much, and can we attribute a dollar amount to that?  Certainly this is a contribution, which our anemic city budgets appreciate.

The fine line is somewhere around doing things that help our own neighborhood and interests, and doing things that are in the interest of the entire city.  That line is muddied when government is outsourced behind-the-scenes, or one interest is so powerful it becomes a strangling force on our council members and government.  Then democracy goes out the window, and some other form of human organization takes over.

 

The Look of Love is in Newburgh Land Bank’s Eye

I can hardly wait to hold you, feel my arms around you
How long I have waited
Waited just to love you, now that I have found you
Don’t ever go
Don’t ever go
I love you so

FIVE Thoughts on the Newburgh Community Land Bank (NCLB)

1. Is it big enough? 
 Probably not.

While the Land Bank promoters bragged that the Newburgh Community Land Bank was the only municipal-based land bank of the five that were approved by the New York’s Empire State Development Corporation earlier this year, this might not be something to be proud of.   According to land bank experts Dan Kildee and Amy Hovey from Michigan’s Center for Community Progress, larger land banks are better than smaller land banks as they allow for a greater diversity of holdings.  (Kildee and Hovey gave presentations April 14 and 15 of 2010 here in the City of Newburgh in conjunction with PACE’s Land Use Law Center.)  As Ms. Hovey explained in a recent email,

It is always best to have a diverse inventory of properties with the land bank jurisdiction.  The diversity allows the land bank to balance the properties/projects that provide a return with those that cost more than they can generate during the sale.  If a land bank only take[s] the properties that do not provide any revenue the land bank with not be sustainable.  (Emphasis mine.)

The NCLB does not seem to have learned this lesson yet.  Instead of encompassing the entire city, which after all is only about four square miles, the land bank is narrowed, according to its application, to include “to the North by Gidney Avenue and Clinton Street, to the East by Grand Street, to the South by Broadway, and to the West by Dubois Street.”

This is a minuscule area, where blighted properties tend to have similar problems–not much diversity here, although it is within the catchement area and includes the site of St. Luke’s Cornwall Hospital, whose CEO Allan Atzrott sits on the board of the NCLB.

The four land banks approved by ESDC other than Newburgh all contained at least a county, or a combination of cities and a county.  Newburgh should at a minimum expand the land bank to include the entire city, if not consider partnering with Orange County and/or neighboring towns.

Unfortunately, ESDC admitted it was impressed by “letters of support” the Newburgh Land Bank lined up (if you download their application, supporters run on for ten pages, although none speak with any depth as to what the land bank will do or how it will help.)  Does ESDC know as little about land banks as Newburgh?  And how did PACE’s representatives support this mote of a land bank?  Shouldn’t they know better?

2. Is it financially grounded?  Probably not.

One of the things that impressed me in the presentation in April 2010 by the Center for Community Progress was that land banks can be sustainable.  By having diverse projects, they can balance the gut rehabs that require so much more investment with other kinds of development projects.  Additionally, revenue can be made through the collecting funds on properties with tax liens, and other financial penalties; collection of rent, as well as sales of properties.

Looking at the NCLB’s application’s budget on pages 40-41, about half of the land banks revenues are grouped together into “Grants or In-kind services,” amounting to $220,000 of $450,000 total for the first year.  A footnote attempts to clarify that

* As of 3/28/2012 NCLB has secured $30,000 from the Ford Foundation, plus an additional $100,000 commitment from Ford Foundation, $80,000 Planning Fund from City of Newburgh.
** In-kind donation of professional services from the City of Newburgh, The Greater Newburgh Partnership and St. Luke’s Cornwall Hospital

The $220,000 amount does not include an “existing City of Newburgh grant” of $75,000.  But it is totally baffling what is going on here financially.  How much, exactly, is being provided by the city vs. the Greater Newburgh Partnership vs. St. Luke’s Cornwall Hospital? When does the $100,000 from the Ford Foundation kick in? Was the $80,000 from the “Planning Fund from City of Newburgh” approved by resolution by the city council?

What is clear from the budget is that the NCLB is relying on grants for funding.  This is unfortunate, because some of the other types of sources of revenue are what will help to make the land bank sustainable, such as collecting on tax liens.  This is, in a sense, a “Michigan model,” in that land banks there like the Flint and Genesee County land banks participate in those kind of revenue streams.  In contrast, I asked Steve Gawlik of ESDC whether any of the other New York land banks were making use of tax liens as part of their revenue stream, and he said no.

While it could be that these new land banks are simply getting started, in the long run, going after tax liens would help round out the revenue streams as well as improving the general property climate.  The “Foreclosing Governmental Unit” (FGU)–in this case, the City of Newburgh, would not necessarily be a competitor for such funds if they are not being zealously collected in the first place (a question for the city council.)

3. Does it have the interests of the whole city at heart?
  Probably not.

Well, since geographically it’s not even four chambers of a heart, barely a single chamber of the city, we must ask ourselves, whose interests are best represented in carving out this portion of a cardiac patient?

Maybe we could spread some of the love around?  Or at least some of the defibrillators.

4. It’s just like Habitat for Humanity!
  Right? Wrong.

Center for Community Progress’s  Hovey clarified by email the difference:

There are many differences between a land bank and a Habitat for Humanity
1. Habitat only deals with affordable housing.  Land Banks can be involved in a diversity of housing projects, as well as, commercial, industrial, recreational and agricultural projects.
2. Habitats do not hold property for long periods of time.  Land Banks are created to hold all types of properties tax free until which time the market is ready to absorb the property into the market.
3. Habitats are private nonprofits whose mission is to create affordable housing for low income families. Land Bank are mostly public entities that help a community meets it land use goals.  A Land Bank transaction [is] transparent and open to public comment.

5.  Is it sustainable?  Not yet.

But perhaps with some changes it could be!

CVH holds Newburgh Land Bank meeting at Ritz

Slide Fire Chief Mike Vatter used to highlight areas of most distressed properties

 

Rae from Community Voices Heard reads the brainstorms of one of the breakout groups

On Tuesday, December 13, Community Voices Heard held a meeting at the Ritz in conjunction with the Newburgh Land Bank.  The meeting’s purpose, as stated in the handout, was threefold:

1. To learn more about the land bank
2. To plan for land bank activities
3. To get involved!

A handout was circulated listing the city-owned properties within the land bank area; they are mostly on Lander and Chambers streets, with some additional properties on Dubois, Third, South Miller, South, Liberty, Liberty St. Rear, Johnston, Grand, and First Streets.

Additional information on the Newburgh Land Bank can be found on its website here.  The contact person at CVH on this issue is Rae, who can be reached at (845) 562-2020, rae@cvhaction.org, or by stopping into the CVH office at 18 Lander Street, Newburgh, NY 12550.

Below is the full video of the evening’s presentations.  There is a gap in the middle, when the attendees broke into groups, which was not videotaped.

 

Greater Newburgh Partnership and Newburgh Community Land Bank at Powelton Club

Yesterday evening the Greater Newburgh Partnership gave a presentation at the Powelton Club in Balmville regarding their plans, followed by a brief presentation by the Newburgh Community Land Bank.  While a focus on fundraising was downplayed, securing donations for the GNP was one of the purposes of the event, with individual folders on the tables including a range of “investment opportunities” from “Newburgh Society” donors of $20,000 receiving a seat on the GNP board, to “Not-for-Profit Partner” donors of $1,000 receiving a listing on the website.

The GNP is a nonprofit, with investors including Central Hudson, Cosimo’s Restaurant Group, Hudson Valley SPCA, Laborers International Union of North America, NY Security Systems, Inc, Mount Saint Mary College, Perreca Electric Co. Inc, Safe Harbors of the Hudson, St. Luke’s Corwnall Hospital, SUNY Orange, Unitex Textile Rental Services, and Visconti Limousine.

The planned expenditures of the GNP include a paid community watch program; enhanced lighting in collaboration with Central Hudson; and additional security cameras and monitoring.  An additional project is the “Greening of Broadway,” in which the lot on the corner of Broadway and Johnston Street (locally known as Carchietta’s lot, although it is now owned by the City) will be cleared and greened by the end of the month.

Allan Aztrott gave the initial presentation regarding the GNP, followed by Councilman Curlie Dillard who spoke briefly and introduced City Fire Chief Mike Vatter, who serves on the Newburgh Community Land Bank.  Unlike the Greater Newburgh Partnership, the NCLB is a creation of the City of Newburgh and has direct ties to the government of the city in terms of its functioning and board membership, although it is also a nonprofit.  It was created with the guidance and assistance of the Pace Land Use Law Center.

The audience was then given a few minutes to talk as tables and come up with questions.  Mr. Aztrott then concluded the presentation by answering the questions and fielding some to other members of the audience.

One question was whether the hospital and other nonprofits could give payments in lieu of taxes, or PILOTs, to the City of Newburgh.  The city is under extreme financial hardship with severe cuts anticipated.  Many of the GNP anchor institutions, such as the hospital and Mount Saint Mary College, are wealthy businesses but pay no taxes to help defray the cost of city services because they are tax-exempt.

In responding to the PILOTs question, Aztrott said the hospital pays $22 M for free medical care, and that this is part of their contribution to the city.  He also floated the idea of the hospital creating two tax rateable properties, and did not entirely rule out the possibility of a PILOT and some future point in time.

The presentation will be repeated on Thursday, November 3, at 5 p.m. at the Powelton Club.

Video of presentation below may be downloaded here.