IDA Resolution on Housing Policy
“The trickery conduct, in all affairs, is such a flame of fire that burns the truth and trust; consequently, which becomes impossible to recover.”
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HOUSING RESOLUTION
The gist: The IDA doesn’t need anyone’s permission to give out a PILOT.
With this change in housing policy, the IDA vacates its own earlier policy that required it to seek approval from the involved taxing jurisdictions – in this case the City of Kingston, Ulster County and The Kingston School District.
Here’s the new wording: the Agency will attempt to obtain the prior approval of each town, village, city and school district in which the housing project, or any mixed-use project that includes a housing or residential component, is located. In the event that the Agency is not able to obtain the approvals of all such entities, the Agency may consider the granting of “financial assistance” to such housing project, or such mixed-use project that includes a housing or residential component, without such approvals.”
Background: The IDA statute does not mention housing. It does not ban it, but it doesn’t permit it either. In August of 2020, the IDA adopted a policy requiring approval from affected taxing jurisdictions – in this case the City of Kingston, Ulster County and the School District — for any residential developments. Why? There was substantial opposition from the people of Kingston, and perhaps the IDA thought that in the event of a lawsuit, if the three taxing jurisdictions approved, it would look better in terms of public support, which the IDA is also mandated to take into account. Perhaps the IDA/developers expected it would be a breeze to win approval from all three jurisdictions. Instead, the School District refused to go along with the boondoggle, and so on Jan. 20, the IDA repealed its policy.
Why this might stand: The statute does not, nor did it ever, require the approval of taxing jurisdictions, so the IDA is simply reverting to the law.
Why this might not stand: Section 9 of a document known as the UTEP (Uniform Tax Exemption Policy) requires 30-day notice if the IDA wants to change policy. The IDA is trying to say they didn’t really change the policy, they merely brought the housing policy into alignment with the UTEP housing policy. There are two problems with that argument.
First, anybody could see that the IDA changed its policy five minutes before they voted to gift the developers $27 million and that the UTEP pretext was nothing but a bad faith ploy to pass the PILOT.
The second problem is that both housing policy changes — Section E, requiring consent, and the new Section F, NOT requiring consent — don’t conflict one way or the other with the housing policy in the UTEP. In fact, the only direct mention of housing in the UTEP pertains to senior or workforce housing, and the Kingstonian is neither. Its 14 affordable units don’t count. The IDA statute is pretty clear on the definition of workforce housing, and this isn’t it. It follows that if Section E does not conflict with the UTEP, rescinding Section E via Section F STILL has nothing to with UTEP compliance.
Section 8 of the UTEP DOES define its policies vis-à-vis deviated PILOTs and states that it does not need the approval of the taxing jurisdictions, but it is unclear which would take precedence — a separate policy, such as the two housing policies, or a UTEP policy. Please read Section 8 if you are interested in researching this question.
The other indirect mention pertains to “commercial” projects, which is addressed in the next resolution.
Here is the UTEP’s SECTION 9: At least annually, the Agency shall review its tax exemption policies to determine relevance, compliance with law, effectiveness, and shall adopt any modifications or changes that it shall deem appropriate. Unless otherwise provided by resolution, such annual review shall take place at the annual meeting of the Agency each January, notice for comments on such policies shall be circulated thirty (30) days prior to such meeting to Ulster County and affected Tax Jurisdictions, and adoption of any changes shall take effect immediately upon approval by the Agency. The Chief Executive Officer (CEO) shall be responsible for conducting an annual review of the tax exemption policy and for an evaluation of the internal control structure established to ensure compliance with the tax exemption policy, which shall be submitted, to the Agency for approval. The thirty (30) day comment period shall not apply to the adoption of the original policies of the Agency, which said policies shall become effective as herein provided.
The newly adopted Section F is hardly an original policy, is it?
Here, on p. 51, is the housing policy as of early August, 2020.
Here, on pp. 45-48, is the addition on Aug. 12 at a governance committee meeting of Section E, amending the policy to require approval of the three jurisdictions.
Here is the UTEP which the IDA says is inconsistent with the housing policy.
Questions: Does Section 9 of the UTEP invalidate the vote because of the failure to give 30-day notice? The latest version appears to date from May 2020. What about the fact that the UTEP does not address directly the issue of housing other than to mention senior and workforce housing? What about the fact that the UTEP, although the word ‘housing’ is not mentioned, would allow you to grant a PILOT for the Kingstonian on grounds that it is a commercial project? (See the next section, on the Commercial resolution.) Which carries more weight? A UTEP policy stating that the IDA does not need the consent of the taxing jurisdictions for deviated PILOTs, or a policy stating that it does, at least when it comes to housing? Does the arbitrariness of the policy change matter?
Side note: Another fun point to be gleaned from the Aug. 4 Governance Committee is that anyone can see the IDA was going out of its way to accommodate the Kingstonian. See p 63. Policy Respecting Uniform Criteria for the Evaluation of Projects, where they mentioned “walkable” as a criterion. “Walkable” is a developer buzzword and about as far from the original IDA statute as you can, well, walk.
I’m not a lawyer, and I’m certainly not a judge, but if I was, my verdict would be that the IDA needs to be shut down. It is so sad to have to scrutinize every word, every plan, in order to defend against underhanded trickery. Is it any wonder that the people have lost their faith in institutions?