More than 30 people attended a lunch and informational session about Ulster County’s industrial development agency (IDA) at Van Den Berg Hall at SUNY New Paltz on February 5. Some attendees had specific projects in mind, but the room mostly contained insiders such as university administrators, department heads extolling the virtues of county government programs and local elected officials or their staff. Four representatives from the Orange County IDA were taking careful notes. The attendees filled all but a handful of seats in the conference room of the university’s business school.
Agency executive director Hillary Nichols, the main speaker, used a slide show to illustrate the incentives available to business owners, and the somewhat complex process required to secure these. Nichols extolled the economic advantages of doing business in Ulster, a county that’s within commuting distance to New York City and less than half a day’s drive from Boston and Philadelphia — but more affordable than those metropolitan areas. Emerging industries include nanotechnology, renewable energy and manufacturing, she said.
Ulster County is home to a skilled workforce, Nichols said, and features a high quality of life that includes the arts and access to a variety of natural areas. At the same time, Nichols touted room to build as well as developing infrastructure.
The IDA issues bonds that carry a lower interest rate than those available on the private market. It offers a number of tax-abatement schemes. Developers may be able to avoid sales and use taxes during construction, for example, and also not have to pay the mortgage recording tax when loans on land are involved.
The best-known program, however, is authorizing payments in lieu of taxes (Pilots), where the developer will be responsible for previous property taxes only, typically for ten years. The developer makes an additional yearly payment in lieu of the higher property taxes, a fraction of the tax amount. That amount increases each year.
Applications are considered based on the number of jobs and their salaries plus the environmental impacts.
For standard agreements, approval from the local planning board is required to begin the application process. There is also a clause that the project in question cannot “but for the assistance of the IDA” get funding. Applicants must pay all the legal fees, plus one percent of the project cost, in order to seal the deal. The IDA approval process takes up to four months.
During the agreement period, the agency has a leasehold interest in the land, essentially owning the property. After the agreement runs its course, the land is returned to the tax rolls.
Nichols said that current board members “strongly believe” that the benefits of offering such incentives vastly outweigh the reduction in future taxes received. The jobs and economic activity generate value that brings $26 into the area for every dollar abated, Nichols said, either directly or indirectly.
Left with questions that were not addressed, New Paltz mayor Tim Rogers was hopeful that Nichols might drill down on these at a session on March 4 which will specifically target elected officials.
Rogers recalled a project called Park Point, which in 2014 was granted IDA approval for a payment in lieu of taxes prior to planning board approval. That tax abatement was the reason the project was denied, which led to that planning board ultimately prevailing after being sued by developer Wilmorite.
Park Point, which would have added college housing on land where the New Paltz Apartments project is now being considered, was in fact a deviated payment-in-lieu-of-taxes scheme. A deviation is defined as “a departure from the requirements specified in the tendering document.”
In that case, New Paltz’s school board voiced its opposition to the Ulster County IDA. Brian Cournoyer, then its president, was quoted as saying, “The input given to the IDA by the school board didn’t seem to have made much impact in the decision.”
The Kingstonian mixed-use development is another example of a project with a deviated Pilot for which there has been controversy. That Kingston plan was approved by the IDA in 2021 with support from the county legislature and Kingston Common Council, but over the objections of the school board.
Nichols’ predecessor, Rose Woodworth, said at the time, “It’s an internal policy to get the approval from all three taxing jurisdictions before doing any Pilots or incentives for housing projects, but it’s not a New York State law.”
The current Ulster County IDA, Nichols has said, will not consider applications for Pilots which have not received approvals from all other public agencies.
IDAs remain controversial, and will likely continue to have both supporters and detractors for the foreseeable future.
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