IDA Votes to Transfer $27 Million From People to Developers

“There is truth and there are lies, lies told for power and for profit” – President Joseph R. Biden

Background: The Kingstonian is a proposed $57 million market rate multi-use housing project consisting of 143 apartments, boutique hotel, garage and retail space to be developed by Brad Jordan and Joseph Bonura and their unidentified investors, some of whom are said to be elected officials. The project is funded on the public dime to the tune of 60.15% through New York State grants and a property tax break that will deprive Kingston, Ulster County, and the Kingston School District of $27 million. Upon sale, the investors will pay no capital gains tax because the project lies within an Opportunity Zone and they will pocket at least $100 million if they hold for ten years — not bad, considering their cash investment is $6 million. Fueled by false narratives and grossly overblown economic projections, this vote is one more reason for Americans to lose faith in their institutions.

January 28, 2021

The IDA’s vote Jan. 20 in support of the $27 million tax break for luxury housing shows a profound failure to grasp the damage that welfare-for-millionaires unleashes on our economy and democracy. It also confirms that most of Ulster County’s elected and appointed officials are either uninformed or unprincipled.

On the simplest level, someone has to pay for this kind of tax break known as a PILOT (payment-in-lieu-of-taxes).

Unlike the Federal government, state and local governments must balance their budgets, and PILOTs are balanced in one of two ways: property tax increases, or cuts to services.

Beyond that, the real price tag is much higher than the dollar amount. This is because of the ripple effects on democracy and inequality. Not only does this PILOT rob the taxpayer, it also strengthens the local kingpin’s grip on what’s left of the democratic process in Kingston.

“It’s free money,” argued a prominent local Democrat and project supporter in a Facebook post. But is it? This tax break would deprive public coffers of funding for services that benefit everybody, such as streetlights and road repair, as well as more targeted services such as community centers. The biggest losers: the children of the Kingston School District.

While the IDA has many mandates, some require that it look at popular opinion, judge the validity of proposed job creation, and look at revenue creation for local jurisdictions. Yet despite an online petition that garnered more than 500 signatures in three days; despite the developers’ estimates (not promises… just estimates!) that only 40 permanent mostly low wage jobs would be created; despite all evidence that the revenue predictions are fiction, the IDA caved like tranquilized orphans in The Queen’s Gambit.

In a magnificent display of crocodile tears and pass-the-buck-ery, several members said the IDA would “write letters” asking the state about the plight of school boards. Addressing the narrow issue of tax caps, board member Rick Jones said, “Some of the objections, in my view, are based upon items that we don’t control, for example, the impact of tax caps. It impacts, and I don’t deny it’s the case, impacts the school district. That’s not anything any IDA in New York State can fix. That has to be fixed by Albany.”

He also addressed concerns that because of the sales tax structure, the City of Kingston would lose out also. “Again, it’s not something the IDA can deal with in terms of fixing. That’s something that the legislature of the county of Ulster needs to deal with.”

You can borrow from Peter to pay Paul, but if you allow developers to steal from both of them, eventually there will be no cash to pay back either. So long as state and local governments are required to balance their budgets, this is a zero sum game. The other problem is that Jones failed to address the very stacked imbalance between the private gain to developers and the loss to the public. Even the IDA’s own wildly optimistic analysis projects $74 million of benefits to flow to private hands, versus a paltry $1.7 million to the public.

Chair James Malcolm made an even more curious claim. “Look, everybody understands the school’s position. But unfortunately, they’re hamstrung and development would stop.”

Development would stop, Mr. Malcolm? And you wonder why a movement is afoot to disband the sorry lot of you.

Jones also said he was “disappointed in the … vitriol between certain people and members of the Kingstonian team, the actual developer.”

I disagree. Jordan and Bonura need to be called out for their greed and grift.

Jordan seems less of a caricature than does Bonura with his blowhard car salesman shtick and his $1 billion (that’s right, that’s billion with a B) disputed PILOT in Poughkeepsie, but his ethics are no better. While this PILOT is Jordan’s biggest haul, it is not the first time he has made Kingston his fool. In the mid-aughts, he tried to get the School District to abandon the perfectly serviceable high school on Broadway and build a new one on a flood plain that he owned near the Esopus tributary. He would have made a fourfold profit upon sale of the flood plain, and one way or another, he would have been involved in building the school. A supporting actor in that attempted swindle was City Attorney Dan Gartenstein, proving that once a lapdog for Brad Jordan, always a lapdog for Brad Jordan. (See Gartenstein’s role in suppressing the SEQRA process.) For the floodplain story, see, in chronological order, 1, 2 , 3 , 4, 5

Today, taking his cue from a well-known failed developer turned reality TV star, Jordan loves to present himself as the besieged and persecuted benefactor of the people, leading the charge against unemployment and economic deterioration, and carrying on heroically in the face of unwarranted attacks by opponents of progress.

No vitriol, you say? Rick, that would be like mourning those who died at the insurrection in Washington without bringing up the name of Donald Trump.

And speaking of insurrection, one animating thread is the failure of trickle down economics such as this PILOT. The Washington rebellion has been likened to a clown bus where the brakes came off, but the truth is more complicated. Not everyone there was an inbred yahoo. There were doctors, lawyers and veterans along with the bozos in warpaint and costume. Professional or proletariat, they are angry because they know the system is stacked against them, even though they may not have pinned down exactly where. I’m willing to bet those troubled souls have no idea how they’re being robbed by pigs at the public trough such as Jordan and Bonura and their elected and appointed co-conspirators in the thousands of America’s towns and counties. Around the world, people are rising up against corruption. In India, farmers revolt against new regulations that would destroy small family farms. In Russia, Navalny is spearheading street demonstrations against corruption. Occupy Wall Street and the Arab Spring uprisings are fairly recent examples of the people’s discontent. Each nation’s flavor is a little different, but the throughline always points to inequality of wealth and power. This PILOT exemplifies that kind of corruption on steroids.

The IDA is nothing but a rubber stamp for Jordan’s shadow government and it needs to be shut down.

Click for a closer look at IDA resolutions on SEQR, Housing, and Commercial.

-0-