Large development plan riles New Paltz

NEW PALTZ — In 2015, local developer Luis Martinez paid $1.25 million for a 2.4-acre parcel of undeveloped land in the heart of the village.

Ever since, he and his company, The Lalo Group, have been trying to put forth a commercial development that the village would approve. Over that time, Martinez faced significant financial hardships, fell delinquent on the property taxes and was arrested by U.S. Immigrations and Customs Enforcement.

On Wednesday at a Village Board of Trustees meeting, The Lalo Group put forward more details of its latest proposal, La Estancia — which includes a 55-room hotel, 32 apartments, a banquet hall, retail and a restaurant. But elected officials questioned many aspects of the project, from its scale to its character to whether it adhered to decades-old covenants still on the books.

The contentiousness hit a boiling point when a visibly exasperated Tim Rogers, the village mayor, said Martinez and his team didn’t seem to understand the board’s job. Lalo’s attorney for the project, John C. Cappello, was in the middle of arguing that La Estancia would bring jobs, affordable housing and lodging, “and we really want you to focus on those aspects,” when Rogers cut off Cappello.

“But that’s not our role. Our role is to review these covenants and to understand why they were adopted historically,” he said.

The parcel that La Estancia would be built is in business district, but it’s bracketed by homes and Village Hall, as well as the northwest corner of SUNY New Paltz. In 1968, a previous owner wanted to build a giant department store in the location, and in 2016, the village submitted an earlier version of Lalo’s plans as part of an effort to win state Downtown Redevelopment Investment funding.

But none came to pass. The parcel’s only use since the 1960s has been as a reserve for storm water runoff. Locally, it is known as “The Pit.”

Rogers said there have been numerous ideas for the site, but none has seen so much as a shovel in the soil. Part of the issue is that The Pit is three properties that over time were combined into one, and are now governed by various precedents and rules.

But the bigger problem seems to be disagreement over how much construction New Paltz should permit — and where it should go.

Luis Martinez’s history

One thing that didn’t come up during Wednesday’s meeting — but which locals are well aware of — is Martinez’s complex history as a local figure.

He grew up in New Paltz and is best known as the owner of La Charla, a Mexican restaurant on Main Street. But in January 2019, he was arrested and detained by ICE for an incident that took place nearly two decades earlier.

Martinez was born in Mexico and was brought to the U.S. by his mother when he was 8 years old. She was fleeing a gang that murdered her husband and was provided asylum by the federal government, but Martinez and his brother were not granted that same protection.

Because Martinez never secured a green card, ICE had an extant warrant from 2002, when he visited Mexico and then came back across the U.S. border. The federal agency pursued the warrant during the Trump administration but botched the process, forging documents submitted to a judge, failing to properly charge Martinez and failing to read him his rights. After nearly five months in prison, a federal judge threw out the case for lack of due process.

In a call before Wednesday’s meeting, Martinez said the toll of that period has been tough. But he still wants to see through La Estancia, in part because he believes New Paltz needs more housing and lodging.

“I had family visit over the summer and we had to use Airbnb,” he said, because the nearest hotel, the Hampton Inn by the state Thruway, was booked. The anecdote illustrates a critical issue in New Paltz and other Hudson Valley towns: Vacation rentals are eating into the region’s limited housing stock.

Martinez argued that La Estancia’s apartments — some of which will be set below market rate — and the hotel will lessen that strain without increasing traffic, since dwellers could park in town and walk in the village. He added that parents who come to visit their children at SUNY New Paltz “cannot afford to pay $800 a night at Mohonk or $1,000 a night at Wildflower Farms (in Gardiner). Here they’ll be able to afford to stay and walk right to the college.”

Martinez is also looking to the project as a way to capitalize on an investment he made eight years ago — and to help get out of a financial hole he fell into after his detention.

Martinez has been delinquent on The Pit’s property taxes, including this past year. He was sued in 2019 for foreclosure since The Lalo Group then owed $614,128 for the outstanding balance plus interest on a loan secured in 2015 in order to purchase the land. (The guarantor of the loan paid The Pit’s back property taxes in Martinez’s stead.)

The Lalo Group settled that foreclosure in August 2020. At the same time, Martinez took out a $3 million mortgage on seven properties, including The Pit, in order to catch up with his accumulating debt. He said he’s on firmer financial footing and that the latest mortgage will be settled within the next few months.

Affordable housing and more lodging

At Wednesday’s Board of Trustees meeting, elected officials picked apart The Lalo Group’s argument that La Estancia would address New Paltz’s affordable housing issues.

Deputy Mayor Alexandra Wojcik questioned whether the proposal would meet legislation pending before the state and Ulster County legislatures “establishing housing as a county priority and addressing the issue at all times.” Trustee Stana Weisburd said after the meeting that she didn’t think The Lalo Group would build more housing “than they are forced to, and people who want to work here in the village can’t afford to live in or nearby. It’s not OK.”

Trustee Bill WheelerMurray made a similar point, noting that the banquet hall as proposed would encompass 5,000 square feet. “We have a housing crisis in our community. I don’t really see the banquet hall being a great use of space,” he said. He also echoed concerns expressed in a town Facebook group about the scale and ethos of La Estancia.

“I might see this off the New York state Thruway or the New Jersey Turnpike,” Wheeler-Murray said. “It’s huge. It’s going to change the character of the village.”

Others in town seem more open to some aspects of what La Estancia promises.

Nate Ganio, who has managed the Italian restaurant A Tavola Trattoria since 2016, said the village needs lodging within walking distance of Main Street, since at present there’s only one large hotel far away near the Thruway. That would help businesses, like his, that are still struggling postpandemic. He’d also like to see an actual “heart; some sort of Central Park that feels like the town’s center.”

La Estancia proposes a small green space of its own, which the deputy mayor said would be good for New Paltz residents who don’t have access to yards. Wojcik also said amenities like public restrooms should be part of the growth recipe.

New Paltz is already about to see tremendous housing and lodging growth. A mixed-use complex with apartments called Zero Place recently went up on North Chestnut Street, and a studentfocused, 650- to 700-bed mini-community on state Route 32 is likely to begin construction as soon as this year. Another project, the Water Street Trails Hotel, would transform a building behind Water Street Market into a 26room hotel.

In addition, a group called Chestnut Properties, LLC, has proposed apartments and retail development on the site of the defunct Agway, at 145 N. Chestnut St., just inside the boundary of the village. This group, backed by Max Kimlin, owner of Gardiner-based Kimlin Propane, wants to demolish the former hardware store and replace it with a three-story complex dubbed Chestnut Square. It would contain 63 apartments and ground-floor retail.

That 2.5-acre property is almost exactly the same size as The Pit, but benefits from having already been developed and for being part of the Neighborhood Business Residential Mixed-Use corridor, a sliver of mostly commercial property bracketed by the Wallkill Valley Rail Trail and Route 32.

These cumulative development plans light up the mayor’s radar. Rogers’ focus for the past decade has been on managing the village’s water and sewer demands and updating infrastructure that in some cases is more than a century old. Rogers said the village’s multiple boards have to weigh the costs and benefits of all of these proposals.

“They’re going to impact in some way. Can the village sustain it and what measures would need to be made to make that possible?”