Mayor Steve Noble is saying it may be time for the city to start its own industrial development agency to provide incentives for businesses to start in or move to Kingston. Noble’s remarks come as relations between Ulster County’s IDA and the administration of County Executive Mike Hein have frayed in a dispute over a contract and concerns over leadership at the quasi-governmental agency.
“Ever since I heard what’s been happening at the county level the past couple of months, I’ve been thinking this might be a case where we want to seize control of our own destiny,” said Noble.
Noble was referring to an ongoing dispute between the Ulster IDA, which is an independent body run by a board of directors appointed by the county legislature, and Hein’s office. Hein has accused IDA leadership of “negotiating in bad faith” regarding a contract with the county’s Office of Economic Development to handle administrative work for the agency. Hein’s administration has also expressed concern over the IDA’s direction under its current leadership.
IDAs are typically sponsored by local governments and empowered to offer incentives for projects in exchange for meeting job creation or other economic development goals. The most common sweetener use by IDAs is the Pilot, a “Payment in Lieu of Taxes” agreement. Pilots offer a structure for tax payments that typically allow developers to pay less than full assessed value for a set period of time. In most cases, the tax deals come with a “clawback” provision that voids the agreement if the developer fails to meet goals outlined in the Pilot — for example, to create a certain number of jobs paying a certain level of wages. Supporters of Pilot agreements say they’re a valuable tool that communities can use to help guide development by, for example, offering a reduced tax bill to developers of affordable housing. Pilot agreements can also avoid situations where developers are faced with large tax bills before their projects have an opportunity to become profitable.
But in recent years the tax deals have drawn scrutiny from those who feel they’re unfair giveaways handed out as a matter of course for projects of dubious value to the community at large. Common Council Majority Leader Rennie Scott-Childress (D-Ward 3) said a Kingston IDA would at least give local officials more control over Pilots for projects within city limits. Scott-Childress, who said that he was “open to discussing” a Kingston IDA, said city elected officials frequently came under fire for Pilot agreements that were negotiated and approved by the county agency.
“If we’re going to get blamed [for unpopular Pilot agreements], we might as well have some power to affect the decision,” said Scott-Childress. “There were a number of bad agreements that the Ulster County IDA has negotiated in the past.”
Noble also alluded to a Kingston IDA as a means for local officials to ensure that Pilot deals and other incentives are aligned with the city’s own economic development goals.
“We have a county the size of Rhode Island that has a variety of interests that may not always be the same as the City of Kingston’s,” said Noble.
Noble also noted that many, if not most municipalities the size of Kingston already have their own IDAs. Noble said that his proposal is still at the conceptual stage. Actual creation of a Kingston IDA would require a sign off from the Common Council and authorization from the state legislature. Noble said that he had already “informally” discussed the prospect of a Kingston IDA with representatives of Assemblyman Kevin Cahill (D-Kingston) and State Sen. George Amedore (R-Rotterdam).
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