8/3/2019 UCIDA Re Birchwood 12-19-2011

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NEWS RELEASE

FOR IMMEDIATE RELEASE Contacts: UCIDA CEO, Lance Matteson

(845) 338-8840, Ext. 214

(845) 389-3300 cell lmatteson@ulsterny.com

UCIDA Chair, David OHalloran (845) 853-4967 cell

UCIDA Lays Out Facts re Birchwood Project

December 19, 2011, Kingston, NY. The Ulster County Industrial Development Agency(IDA) today issued the following summary of key facts regarding the background of the

Birchwood Village project: On March 25, 2004 Birchwood Village filed an application for IDA benefits. A publichearing was held May 10, 2004 and the IDA Board approved the project on May 26,2004. The approval included a ten year payment in lieu of taxes (PILOT) provision,which required no PILOT payments (effectively, no property taxes) on the improvementsfor three years (2006-2008), then payment of 25% of the property taxes otherwise duefor three years, followed by five years at 50% of the normal rate, after which the IDAPILOT would end and regular applicable tax rates would apply.

For the first three years of the project, per the agreement, Birchwood paid property

taxes on the land but no PILOT payments on improvements. PILOT payments on theimprovements were to begin in the fourth year. Based on information provided by thelocal municipalities, Birchwood in fact has paid no such PILOT payments. (In addition,based on information provided by the local municipalities, Birchwood did not payproperty taxes on the land starting in the fourth year. Land is subject to normal propertytaxes and is not affected by the PILOT.) The PILOT payments were thus neverdistributed to the affected taxing jurisdictions that is, the City of Kingston, the KingstonCity School District, and Ulster County. The total due is $331,245.28 including penalties.

Birchwood disputed its assessment with the City of Kingston, but this did not involve theIDA, as the Assessor alone is responsible for the assessment of properties.

In June and July of 2011, after an internal agency compliance review, the IDA Boarddecided to pursue formal enforcement of two different PILOT agreements that were inarrears at that time, including the Birchwood project. The Committee and Boardfollowed the same procedure for both projects, starting with letters to the projectapplicants expressing concern about nonpayment.

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8/3/2019 UCIDA Re Birchwood 12-19-2011

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In both cases, the IDA Chair and IDA staff have worked closely with representatives ofthe local municipalities and school district to ensure that the PILOT payments were paidand settlements were reached.

No settlement was signed in the Birchwood matter, despite considerable efforts. In the

case of the other project, the applicant made PILOT payments and is nearly current onthe unpaid amounts.

On September 21, 2011 the IDA Board authorized the Chair to issue a letter of defaultto Birchwood through legal counsel if no settlement were signed by its November 16,2011 meeting. On that date, however, the Board decided to provide Birchwood with anadditional month to complete a settlement agreement. Finally, at its December 14,2011 meeting, the Board voted unanimously to send the letter of defaultimmediately. The motion to do so was made by Steve Perfit. It was seconded by RobbKinnin, and the other members present and voting were David O'Halloran, JamesMalcolm, John Morrow, and Paul Colucci. One member of the IDA was absent.

IDA member Steve Perfit, who made the motion and is the IDAs Treasurer and AuditCommittee Chair, said, This was a straightforward enforcement decision of the Boardand was strictly on the merits. Note that the applicant still has plenty of time to cure thedefault.

IDA Chair, David OHalloran, said, The IDA gave this applicant every accommodatio navailable within our policies during this work- out period. Unfortunately, the applicantsinability to provide a payment plan to address past due PILOT payments and propertytaxes resulted in the sending of a default notice. The IDA supports tax benefits to fostereconomic development. But in fairness to both taxpayers and complying IDAapplicants, we cannot afford to overlook non-performing applicants who have receivedtax benefits.

About the Ulster County Industrial Development Agency The UCIDA is a public authority authorized by the State of New York, with membersappointed by the Ulster County Legislature. The UCIDA offers taxable and tax-exemptbonding for business expansion and relocation. UCIDA can also offer real property taxabatements, mortgage recording tax abatements and sales tax abatement duringconstruction. The Ulster County Development Corporation (UCDC) has been contractedby the UCIDA to administer and promote the UCIDA programs.

For more information about the Ulster County IDA, pleasevisit: www.ulstercountyida.com .

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