1.25.10 NO ON NOVESKY: Council voted 4-1, Valentine dissenting, not to hire consultant Neil Novesky to advise with CDBG funds.
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.
Newburgh Mystery: Here is the organizational chart from the 2009 City Manager’s Budget, prepared by Jean-Ann McGrane. Can you spot what’s missing? (click on picture to enlarge)
Leave your suggestions as a comment…
9.17.09 Update:
Most commenters (what a wise, wonderful, bright bunch you are!) caught the Economic Development/Planning Department omission. I think this is the cause of some of the more serious conflicts and confusions over recent years on the council (and in other areas) because agencies have been operating with minimal to no supervision or, in some cases, no awareness of their own existence (as in the recent example of the Newburgh Community Development Agency or the Newburgh Local Development Corporation).
Since E.D./Planning was funded from, as I understand it, a combination of Newburgh Industrial Development Agency money and NCDA money, at a time when the boards of those two agencies were principally council members, it was one-stop shopping to do business in Newburgh. The two agencies even shared offices and a “received” correspondence stamp: NIDA/NCDA, documents will show, or you can see it on even fairly recent letterhead of RFP or RFQ documents.
The problem with all this is the absence of any kind of hierarchy of authority. With no chain of command, no boss or board to answer to, no department head or manager checking the time cards at the end of the day (time cards that apparently couldn’t be conveniently coughed up when the Department of Housing and Urban Development asked to see them, so Mr. Emberger pinned the tail on the NIDA’s donkey to foot the bill); not to mention the foibles of former economic development administrative directors Robert McKenna as well as his replacement Lourdes Zapata, Mr. McKenna in particular who has been vigorously and repeatedly thrown under multiple buses so many times by those left in City Hall it is a miracle he has any flesh left, even in effigy.
When it stopped: it was after 2005 that the City Council ceased passing resolutions appointing members of the NCDA. Oddly enough, in 2005 there was the passage of the Public Authority Accountability Act, and perhaps, just perhaps, somewhere in City Hall this attracted some notice.
DiNapoli’s Office: No problem hereRecently, I checked with the Office of the State Comptroller as to whether there was any problem according to state law with the city acting on behalf of the NCDA without the agency’s knowledge. Jennifer Freeman responded at length, citing General Municipal Law § 503-a:
§ 503-a. Cooperation with agencies. For the purpose of aiding an agency established pursuant to the provisions of article fifteen-A of this chapter a municipality may:
1. Delegate to such agency such of its powers enumerated under section five hundred three of this article as it may deem appropriate, necessary or desirable to effectuate the purposes and provisions of this article and as are not inconsistent with the powers reserved to the governing body or the commission under this article or the powers granted to such agencies in article fifteen-A of this chapter.
Ms.Freeman continues her citation, but the gist is that in this case, it looks like the City has the okay from the Comptroller to act for the NCDA.
But what if it wasn’t the city that was acting? What if, as a hypothetical example, it was a small group of individuals operating in abeyance of open government, including, as a purely fictional example, the mayor, the corporation counsel, the former acting city manager, and possibly an additional city council member?
Back to reality… At any rate, the organizational chart needs to be redrawn. ALL of the suggestions mentioned by commenters below should be incorporated, and additional suggestions should be solicited, perhaps at a city council meeting and additionally at a public location such as the Newburgh Free Library. It is only with a clear understanding of how such decisions get made that we can rest assured that our tax dollars are going to the right places.


