Two years after former IDA Director Ed Lynch asked the Authorities Budget Office for more time to consider what to do about the delinquent Newburgh Local Development Corporation, it looks like the city has finally come to the conclusion to pull the plug.
A recent FOIL request to the ABO revealed that the city’s Industrial Development Agency and City Manager Richard Herbek had been given a warning by the ABO about the delinquency of the Local Development Corporation. The LDC has been getting warnings since at least 2011, when I wrote about them here and here.
From one of those earlier posts, dated June 13, 2011, I wrote:
Newburgh Industrial Development Agency chair Joshua Smith said the old NLDC bylaws describe the board “as the city council and the IDA. We have at least twice asked the council to join us in a meeting. I plan to raise the issue again at our next meeting.” That meeting will be June 20, at 7 p.m. in City Hall. [Emphasis added]
Following up on that, in a post from October 10, 2011, I wrote:
During that [June 20, 2011] 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.
Teri Waivada, the IDA’s current executive director, shrugged off responsibility for the NLDC, stating that it has never met with the IDA’s current board members, although she believes the corporation is still active (which does not make any sense to me, unless by “active” she means it has not yet been officially dissolved):
For his part, City Manager Herbek writes that the city will be reviewing how to disband the NLDC:
Is there any reason to keep the NLDC? As I have written previously, local development corporations can do things that industrial development agencies can’t, such as provide funding for nonprofits. At the county level, our Orange Count Industrial Development Agency board asked the county legislature a few years ago to create the Orange County Funding Corporation, a local development corporation, for just this purpose. When Mount Saint Mary College was looking for bonding money to help pay for a construction project, they went to the OCFC, and were successful in getting bonds.
The Mount did not go to the Newburgh Local Development Corporation, if they even knew it existed. Should they have? Would it be a good idea for Newburgh to have its own funding entity for nonprofits and small businesses?
As someone who has sat through countless Newburgh IDA meetings, and a good many Orange County IDA meetings, as well as countless Newburgh City Council meetings, in my opinion it is just not worth it.
Officially the NLDC board is made up of the city council plus the IDA board. The IDA has toyed with the concept of doing something about the LDC, but they have a difficult enough time carrying on regular business as it is. In contrast, the county IDA (who make up the board of the OCFC as well) has a board that is a well-oiled machine, and includes financial professionals.
The Newburgh IDA cannot compete with them in terms of resources.
In this case, to get the NLDC operational again would demand meetings of the existing gigantic board of twelve members to come to a consensus about what to do, even if that is to appoint a new board and/or alter the NLDC bylaws. This idea seems preposterous, especially since the board has never met in the two or more years it has been officially listed as delinquent with the state.
To have one LDC to cover Orange County (I do not know of other LDCs in cities or villages of the county, although their existence would not surprise me) is perfectly reasonable.
The only potential thorn I foresee is that the NLDC board must meet to approve dissolution. Despite requests by the ABO for over two years, the city has dragged its feet. I wish City Manager Herbek luck in herding the cats.