In the latest chapter of the tortured saga of TechCity, Ulster County Executive Pat Ryan on Monday, Nov. 4 announced a county takeover of two tax-delinquent parcels at the former IBM Kingston site following a summary judgment by County Judge Donald A. Williams.
“The court’s decision is a win for all residents of Ulster County and a major step toward unlocking the potential of the site,” Ryan stated in a press release. “The current owner’s [Alan Ginsberg] approach has essentially held our county hostage for decades, and that ends now. We are committed to working tirelessly with our legal team, economic development professionals and the County Legislature to come up with a true 21st century plan for the property through a smart and transparent process involving all facets of the community.”
The judgment allowed the county to obtain deeds for the properties on roughly 82 acres of TechCity’s sprawling 258 acres. The pair of parcels were previously used by Bank of America for processing state income tax returns, most recently in 2012.
IBM spent roughly four decades at what’s now known as TechCity before leaving in 1995 after a series of layoffs; the remaining employees were transferred to the company’s Poughkeepsie facility. Ginsberg bought the property from IBM three years later. Foreclosure proceedings were filed in mid-February by a bank against six of 25 parcels on the expansive property. ConnectOne Bank claims that as of Jan. 31 of this year, payments amounting to roughly $232,000 are overdue by companies connected to TechCity owner Alan Ginsburg. The payments, according to ConnectOne, are related to both a $7 million loan dating back to August 2014 and a $600,000 line of credit from December 2017.
In addition to three businesses identified as TechCity LLCs, the complaint filed in state Supreme Court in February also included nine TechCity tenants: Ceres Technologies (Buildings 42 & 64); Anaerobic Athletics LLC (Building 33); Brooklyn Brew Shop (Building 33); Innate Movement Parkour LLC (Building 33); JSP Plumbing and Heating (Building 51); C&A Custom Builders, Inc. (Building 51); Visual Color Systems (Building 51); Synergy Merchant Services LLC (Building 51) and Consolidated Harvest Company LLC, a.k.a., Hudson Valley Harvest (Buildings 51 & 64).
The filing follows a January 2019 merger of ConnectOne and Greater Hudson Bank, the owner of the original loans. According to the original filing, TechCity still owes the original loan of $7 million, plus interest, along with late charges and other unspecified expenses.
“On November 1, 2018,” reads the filing, TechCity failed to comply with the terms of the mortgage and credit line, going into default “by failing to make the monthly installment payment due on that day comprising principal, interest and other sums required by the note and mortgage and by failing to make all subsequent installment payments due thereafter.”
Last December, Ulster County revealed plans to foreclose on 18 TechCity parcels due to tax debts, but three of those parcels were removed from threat when, according to the county’s Department of Finance Commissioner Burt Gulnick, Jr., ConnectOne paid the tax debt.
Over $3.3 million in school, town and county taxes dating back to 2016 were owed on the two parcels taken over by Ulster County, which have now been seized by the Ulster County Department of Public Works.
In his press release, Ryan said there was still work to be done to deliver on his vision of TechCity playing a key role in the economic future of the region.
“There remain significant milestones ahead for the campus as a whole and I remain committed to achieving the most feasible path forward as expeditiously as possible,” Ryan stated. “My administration remains committed to ensuring the site will have a viable and positive impact on the county’s future success.”
Ulster Town Supervisor James E. Quigley, III on Tuesday said the County takeover could yield mixed results for the municipality.
“Whether it’s a good thing or not will remain to be seen by what happens from this point forward,” he said. “And I’m not going to make any kind of projections, but what it does mean that as long as it’s in the county’s hands, it comes off the tax roll. And that is going to reduce the assessed values in the town by, I believe, about $12 million.”
Quigley added the town could conceivably benefit from a cessation of legal action by Ginsberg.
“It makes Mr. Ginsberg no longer eligible to continue the tax certiorari action against the town,” Quigley said. “He is not eligible to grieve the taxes and that in itself is going to save the town money from potential refunds and from mitigation costs.”
Quigley said the move by the county to take ownership of the pair of parcels isn’t likely to be their last at TechCity.
“What I’m happy about is that it shows that the county has the wherewithal to pursue actions that are necessary to rectify the problems for the long term,” Quigley said. “And I expect that this is going to be the first shot in a series of future actions, because if you were to look at the parcels on the east side of Enterprise Drive, you will find a number of them that are in a similar situation as the Bank of America building. These will be the real estate taxes, so they are all eligible for foreclosure. So I believe that as time goes by, we will see additional foreclosure actions by the County to clarify the problems at TechCity.”
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