Applicants seeking agency tax breaks face more scrutiny
Questions about the veracity of applicants regarding questions about bankruptcies and felony convictions has led the Ulster County Industrial Development Agency to look deeper into the leadership of companies seeking tax breaks through the agency.
At a meeting Wednesday, the agency board was asked to consider the background of Thomas Auringer, owner of the company 2-4 Kieffer Lane LLC, in reviewing his request to waive $975,200 in sales taxes on the proposed $12.9 million purchase of eight large cranes for his town of Ulster business venture.
Union representatives contend a 2003 felony verdict against Cavalier Construction, of which Auringer was president, should be given weight in considering his application.
“We have a document by the Department of Labor that determines that he was the president and sole member of Cavalier Construction,” said Lee Kallman, a community organizer with NYC Community Alliance for Workers Justice. “I don’t know where, legally, you could stand up and say that he was just an employee when the Department of Labor determined him to be the president.”
Timothy McColgan, the attorney for 2-4 Kieffer Lane LLC, said in a telephone interview after Wednesday’s meeting that questions on the application about felony convictions were answered correctly.
“If you read the question, it asks whether any person was convicted of a felony,” he said. “The answer to that has to be ‘no.’ ... I can’t read into the question, try to get into the mind of the person who drafted the question. I can only answer the question.”
Critics also contend that Auringer should have included information about the bankruptcy of Cavalier Construction and three other companies when answering a question about whether he or “any concern with whom such person has been connected” had ever been “adjudicated” in a bankruptcy.” McColgan disagreed. “The Chapter 11 [bankruptcy] ... was converted to a reorganization,” the attorney said. “When it was converted to a reorganization in 2010, all of the requirements to avoid a bankruptcy judgment were met. Taxes were paid, the creditors were paid, the company was reorganized.”
Even so, members of the Industrial Development Agency board said they plan to begin charging $120 to cover the cost of background checks during application reviews. There is currently a $500 fee for the application itself.
“We’ve run into some situations in the past year or so where ... checking the box doesn’t do it for me,” board member James Malcom said. “We’re extending a tax break, an incentive, so to speak, and it’s going to cost you a little bit to get that. So we want to be thorough.”
Agency board Chairman John Morrow said there can be “smoke and mirrors” by some applicants.
“Maybe we haven’t done as good a job in certain cases,” he said. “Before it comes to the board, I think, this is part of the vetting process we should be looking at from Day One . ... If they’re going to fill out an application that says [they’ve] never been bankrupt or been arrested, this is just a way of verifying the answers to the questions are true. They’re not just checking boxes.”
Board members also acknowledged they watch the demeanor of applicants during hearings and were taken aback when watching an interaction between Auringer and Constanzi Crane Vice President Megan Denver at a hearing on Monday. At Wednesday’s meeting, Denver described what appeared to her as an attempt at intimidation.
“In his (Auringer’s) speech at the end of the meeting, when he turned around and pointed at me and said, ‘Those mobile cranes are coming,’ it was clear,” she said. “There is no way to describe that in an application, and ... I felt that you guys should really take that into account in whatever way you can. It was disturbing.”
Morrow responded: “Just so that you know, the board did notice that and mentioned it and described you as handling it well.”
McColgan said there was nothing intimidating in Auringer’s actions toward Denver.
“He didn’t threaten her ... and also, he didn’t point his finger — that’s an outright fabrication,” he said. “He turned around and made a statement, but there was no threats, intimidation. He was in front of a public board, in front of a public meeting, so there was no intimidation involved.”