School district officials chide Kingstonian tax break plan

School officials consider it extremely poor timing for Kingstonian developers to request $30.01 million in tax breaks for their proposed project just as the district is assessing how to fill a $14 million budget hole with more aid cuts to come.

The application for tax breaks was discussed Wednesday during a Board of Education meeting, with Trustee Priscilla Lowe noting developers are seeking support just as tax bills are being received by property owners.

“It is a little bit disheartening because I just received my school (tax bill) today,” she said.

“So for these people to ask for that (payment-in-lieu-of-taxes agreement) when we’re all paying taxes is just mind-boggling to me,” Lowe said. “And, they do go up every year.”

Tax breaks being sought by Kingstonian Development LLC and Herzog Supply Company include seeking reductions of $28.21 million in property taxes over 25 years as well as having $1.4 million waived in local sales and use taxes, with another $325,575 in mortgage recording taxes exempted.

The application has been submitted to the Ulster County Industrial Development Agency, which is expected to schedule a public hearing on the tax breaks. However, agency officials are waiting to hear from the school board and county Legislature to determine if they will join the city Common Council in endorsing the developers’ request.

School district Superintendent Paul Padalino did not comment

on the Kingstonian project but did warn board members that the $14 million in aid reductions will be only part of budget problems caused by the COVID-19 pandemic.

“This is a big mountain to climb, and within the next few days ... I may be asking (board members) to consider a special meeting next week to discuss this,” he said.

Among issues that Padalino finds troubling is recommendations from state and regional officials to have interscholastic sports programs that will triple transportation costs.

Before the pandemic, “a bus that would have taken a team ... to an away game, we would put the team on one bus,” he said. “Under the current regulations, that same team would require three buses.”

Several officials noted they have not seen the most recent version of the Kingstonian application, which includes a promise that the project will create two paid internships to mentor high school students in both hospitality and real estate careers for district students.

Trustee James Michael said there is a district Audit and Finance Committee on Sept. 22 that may include discussion of the project.

“We have not had any formal negotiations,” he said.

Board President James Shaughnessy suggested that the entire board have discussions about the project because information about calculations has not been explained.

“One thing I feel we don’t have and I don’t know that we’ll get it is a real understanding of how the developers ... arrived at their need for ($28.21 million) in eliminated property taxes,” he said. “They want us to relinquish approximately $18 million in school taxes and I think we have a right to know how those numbers were arrived at.”

Shaughnessy added that Mayor Steve Noble should be considered to be one of the developers because it uses city-owned property and grant funding arranged by Noble.

“This is a co-project with public-private partnership in this,” he said.

Noble has appeared at numerous public meetings to muster support for the project and has also reappointed Herzog Supply Company owner Brad Jordan to the city Police Commission.