Ulster agency urged to probe Kingstonian

Ulster IDA officials are being asked to scrutinize the financial beneficiaries of the proposed Kingstonian complex.

Ulster County Industrial Development Agency officials are being asked to scrutinize the financial beneficiaries of the proposed Kingstonian apartment and retail complex as well as become better aquatinted with the project’s impact on school budgets.

The comments were made Thursday during a public hearing on $28.21 million in property tax savings over 25 years, sales and use tax exemptions of $1.48 million, and $325,575 in waived mortgage recording tax.

Among the 18 speakers was Kingston school board

President James Shaughnessy, who spoke as an individual but provided details about how a paymentin-lieu- of-taxes agreement would hurt the district tax levy margin.

“If there is new construction, the state Department of Taxation and Finance calculates a tax base growth factor that allows for a small increase in the tax levy limit,” he said. “When the new construction is under a PILOT, the growth factor is zero at the beginning of the agreement and is not included in the growth factor at the end of the agreement. So the district’s tax levy limit is permanently reduced below what it would be without a PILOT.”

The agreement’s payments would also count as revenue for the district, which would reduce the amount of the tax levy limit.

Under the plan, Kingstonian Development LLC and Herzog Supply Company will use the existing Herzog-owned property on the east side of Fair Street and the city-owned vacant lot on the west side to construct a complex that has 129 market-rate apartments, 14 affordable housing units, and 9,000 square feet of retail space.

Shaughnessy noted the school board is waiting for the agency to directly send the application to the district before voting on a request to support the project. He said there it would be reasonable to assume that the Kingstonian would

house children and that would increase school enrollment.

Those concerns did not sway some supporters of the project, with Hurley resident Rick McColgan saying the district would still see an increase in taxes over the life of the tax agreement.

“Right now the school doesn’t have those dollars,” he said. “Why is the school against a project like this when dollars are not there? What should be happening is the school board ... should be very accepting of a project going forward to help increase tax dollars.”

Under the agreement, developers would pay a total of $1.67 million over 25 years in school, county and city taxes. If the project were built without the agreement, the official forecast the amount would be $28.94 million.

City Assessor Daniel Baker supported the agreement and told the agency

that the forecasted amount was misunderstood by the public.

“If a new project is built in a taxing jurisdiction no new additional money is received by that taxing jurisdiction,” he said. “Property tax in New York state is zero-sum. Additionally, it is not widely known or understood that industrial development agencies are in place to foster economic development and to promote the overall economic welfare of the community they serve.”

Questions about the fiscal impacts of the project were also raised by county Legislator Lynn Archer, D-Accord, who asked the agency to evaluate whether the economic benefits from the project would be as realistic as developers have forecast.

“We strongly encourage the Ulster County IDA to engage an independent, third-party firm to undertake a cost-benefit analysis

of the Kingstonian project and to present the results of these findings to the various taxing authorities,” she said. “We are currently relying on the people benefitting from the project to provide the projected cost of the project without validation from an independent third party.”

Agency members were also encouraged to examine whether city officials have ties to developers, with Olive resident Ilona Ross noting that information about the membership of the limited liability corporations has been withheld from the public.

“They have concealed the identity of investors under the guise of trade secrecy and contrary to their professions of openness they are hiding the individual human beings who are members of the ... two LLCs,” she said.

Several business owners did support the project, say

ing that Uptown Kingston needs housing, increased parking, and an increased customer base.

“We couldn’t ask for better folks doing this project,” said business owner John Perry, who is also Hurley town supervisor.

“This parking garage is a necessity for the current and future development of Uptown Kingston,” he said. “I’ve been here for over 20 years, this parking lot garage needs to happen. It would potentially create much more sales tax to offset whatever potential revenues would not be coming in.”

Under the plan, developers would receive grant funding from the city, with Mayor Steve Noble justifying the contribution as being for a promise to have 277 of the project’s 420 parking slots dedicated for public use. City officials have previously put the amount of the funding at $3.8 mil

lion but the application filed with the agency states the amount would only be $3 million.

Agency officials have left open the written comment period until Oct. 14 and expect to have the application on the board’s Oct. 21 agenda.