Will Cuomo’s Departure Translate to Less Corruption?

“When they call on Gov. Cuomo, he does not know whether to answer ‘Present’ or ‘Not Guilty’.” ― Apologies to Theodore Roosevelt

Aug. 10. 2021

Kingston, NY – Given Gov. Andrew Cuomo’s resignation, it is reasonable to ask whether the failure of Ulster County and Kingston politicians to stand against the Kingstonian tax break boondoggle reflects fear of retaliation from Albany. Only a handful of courageous souls proved their mettle by holding firm throughout this five-year spectacle of corruption.

Caving to pressure, officials who originally voiced doubt or opposition to the project reversed their opinions and their votes. An economic development agency found a net loss to the community from the tax break, then changed the numbers to a net gain after meeting with county officials. One Industrial Development Agency member favorably referenced Cuomo’s support. A state agency reversed its findings after intervention by persons unknown.

The New Yorker’s Ronan Farrow says it best. “Cuomo’s vindictiveness, his attacks on officials who defy him, and his attempts to undermine inquiries about him are recurring themes in a report released last week by the New York attorney general, Letitia James… It is replete with accounts of state employees who say that they feared they would lose their jobs if they attempted to report misconduct by the Governor or his allies.”

One egregious misstep by Cuomo was his 2104 call to the White House about Preet Bharara, then the U.S. Attorney for the Southern District of New York. “He’s your guy,” Cuomo reportedly complained. As such, it might be worth a look at Cuomo’s “guys,” gals and other players in the Kingstonian tax break boondoggle, although this is only a partial list.

Cuomo “Guys” John Milgrim and Tom Scaglione:

In late summer 2020, the Vindicator debunked threats that state grants would “go away” if the developers didn’t get their tax break. Apparently, Gov. Cuomo never saw the memo, because his “guys” in Ulster County called Kingston School Board trustees in hopes of persuading them to vote in favor of the PILOT tax giveaway. At the time, the tax break hinged on the School Board’s approval. Despite the arm-twisting, on Dec. 2, the School Board voted 6-3 against the PILOT.

John Milgrim: By now ensconced in Ulster County as Deputy County Executive, in the month before the vote Milgrim called Trustee Herb Lamb to pressure him to support the tax break. During that phone call, he promised Lamb that local officials would abide by the School Board’s decision. At the time, the IDA’s own rules held that it needed a “Yes” vote from the Kingston School Board if it was to award the tax break. The Kingston School District would have lost the lion’s share of foregone taxes – around $16 million. On Dec. 2, the School Board voted against the tax break.

Perhaps anticipating a lawsuit, the next day the developers issued a statement that the voters of Kingston would be able to weigh in during upcoming School Board elections scheduled for May 2021.

Rather than honor the vote, as Milgrim had promised, the IDA, at its next meeting in January 2021, jettisoned its own rules requiring the School Board’s approval, and five minutes later voted to grant the tax break.

Sure enough, a wealthy Kingston property owner sued on grounds that changing the rules was arbitrary and capricious.

Perhaps to undercut the lawsuit by rendering the School Board’s “No” vote moot, the developers then tried to oust recalcitrant trustees in May 2021 school board elections and replace them with tax break supporters, presumably so they could call a new vote on the tax break. Among the new, pro-tax break candidates: the wife of John Milgrim – the very same Cuomo ally who had promised to honor the School Board’s “No” vote. The upshot: the School Board election came to be viewed as a referendum on the tax break, and Milgrim’s wife and the other pro-tax break candidate were roundly defeated.

Milgrim’s history with Cuomo goes back to 2007, when he took a job as spokesman when Cuomo was running for Attorney General. Later, he defended Cuomo from allegations of improper behavior, in this case with one of his biggest campaign donors. A 2010 article in the New York Times on real estate impropriety quoted Milgrim: “Any suggestion that members of the real estate industry exert improper influence over this office’s real estate finance unit is laughable and belied by the facts,” said the spokesman, John Milgrim. “The bureau is staffed with professionals of the highest caliber and integrity, and the bureau itself is a model for other regulators.”

Milgrim was also Director of External Affairs for the ill-fated JCOPE.

Tom Scaglione:

Two more trustees received calls from another of Cuomo’s “guys” in town.

School Board Finance Chair James Michael said he received a phone call in November from Thomas Scaglione, at that time the NYS Department of Labor representative for the Hudson Valley, to relay that the $3.8 million in grant money would be withdrawn if the school board voted down the tax break. Scaglione said he was from the Governor’s office, according to Michael.

Michael said that before Scaglione’s call, he had received assurance from James Kostenblatt, Deputy Director of the Mid-Hudson Regional Economic Development Council, that the $3.8 million would be re-allocated to a different project.

Michael said he asked Scaglione, “ ‘Who’s lying, is it you or Mr. Kostenblatt?’ And then well that’s when he got a little offended about it and he said to me, ‘I’m not going to get confrontational with you.’ So I said ‘Fine, please, whatever you say to me now put it in writing and send it to the district.’ ”

Michael said Scaglione neither emailed nor called him again.

Trustee Jim Shaughnessy reported a similar exchange with Scaglione, although the two, who live near each other in Kingston, seem to be on better terms. Shaughnessy said Scaglione told him in November that “Albany was watching” the brouhaha because of the $3.8 million in state grant money allocated to the Kingstonian and that despite the written regulations as well as confirmation from the Department of State and Kostenblatt, no other projects in Kingston would qualify for the re-allocation.

After the May school board trustee elections, in which tax break opponents including Shaughnessy were returned to office, Shaughnessy said he asked Scaglione, “What do you think now?” Scaglione replied that Albany didn’t pay attention to such local elections.

It was unclear why the remaining projects failed to qualify for the grant money, and it was also unclear whether state overseers had triaged other projects so that they never even appeared on the application or other documents.

Scaglione today is listed as Director of the Mid-Hudson Regional Economic Development Council.

Dan and Keri Savona

Keri E. Savona is a Family Court Judge in Kingston, and the wife of Dan Savona, part owner of the local Savona restaurant chain, including a pizza parlor in Brad Jordan’s mall. Dan Savona sits on the Industrial Development Agency, which awarded the $30 million tax break, and despite the landlord-tenant relationship, Savona was allowed to vote for the tax break.

A source who insisted on anonymity said that before the School Board election in May 2021, Dan Savona lamented that only two candidates could be found to challenge the three school board incumbents, all of whom opposed the tax break. The election was seen as a referendum on the tax break, and the three incumbents won handily.

One of the challengers was Michele Milgrim, the wife of long-time Cuomo associate John Milgrim, who is now Ulster County Deputy County Executive and a leading cheerleader for the tax break. Savona’s wife, Keri, signed the petition for Michele Milgrim.

It was not clear whether Dan Savona should have been allowed to vote on the IDA, or whether his wife’s signing Milgrim’s petition violated Canon 5 of the NYS Code of Judicial Conduct.

Don Tallerman

Poster child for conflict of interest violations since the project was first proposed in 2017, Kingston’s Fifth Ward Alderman Don Tallerman owns a co-working and event space across the street from where the Kingstonian would stand. At a minimum, Tallerman’s business would benefit from the development. In addition, rumors have swirled for years that he or his relatives are personally invested in the project. Maybe that’s why no one blinked an eye when he complained that a tax break opponent, the watchdog group KingstonCitizens, was “holding a gun” to his family’s head and falsely accused the group of being “bankrolled” by a rival property owner.

Tallerman ran for alderman in 2019, long enough to push the tax giveaway through the Common Council. He sat on committee tasked with allocating state grant money, most of which was duly allocated to the Kingstonian, even though it violated a state code of conduct. Tallerman and his wife appeared in a video clip endorsing the Kingstonian. After KingstonCitizens complained, the video was changed to private mode.

Dan Gartenstein/Gary Daniels

Kingston City attorney Dan Gartenstein created a fake Facebook identity under the name “Gary Daniels” and used the page to insult tax break opponents, opining that they were “in the pocket” of a rival Kingston property owner who has filed several lawsuits to halt the Kingstonian. Gartenstein also used his personal email account to communicate official business with the developers.

The New York State Historic Preservation Office (SHPO)

After intervention by persons unknown, this office reversed its findings of adverse impacts — although the only change was to add another story to the luxury housing complex. Here is the article from KingstonCitizens, a local watchdog group.

FOHK/RUPCO

Two groups that should have been vocal in their opposition, Friends of Historic Kingston and RUPCO, allowed their silence to be purchased by a grant to restore a Revolutionary-era stone building. The Louw-Bogardus House restoration on Frog Alley is near the site of the future development as well as businesses owned by project supporters who stand to benefit from the new customers. FOHK, a local historical preservation group, should have been upset at plans to put a gigantic complex in the middle of Federal-era and pre-Revolutionary landmarks, and in fact was vocal in its opposition to earlier attempts to build smaller developments. RUPCO, whose mission is affordable housing, would be expected to oppose tax giveaways for luxury housing or condominiums. But the restoration grant plus the fact that RUPCO’s tax credits and other funding originate in Albany combined into a classic stick-and-carrot inducement to silence.

The Bruderhof

The Kingston Local Development Corporation is one of the many unelected bodies in New York State that fly under the radar and give away taxpayer money, often to cronies and insiders.

Brad Jordan, one of the developers, sat on the KLDC for decades until early in 2021, when he resigned in order to avoid the appearance of impropriety. (In August 2021, the KLDC took ownership of City-owned property slated to become part of the Kingstonian development.) In early 2017, as plans for the Kingstonian were taking shape, the KLDC agreed to sell the Bruderhof a building in Kingston’s Business Park.  A former KLDC member who asked to not be identified said Jordan steered the property to the Bruderhof even though five other buyers had made offers. The source noted that at the time, a real estate agent representing one of the other potential buyers grumbled that “Jordan sells a lot of materials to the Bruderhof.” Jordan owns most of the land on which the Kingstonian would be built; owns the abutting mall, and also owns a building supply company located in the mall.

In the May 2021 school board election, the pro-tax break challengers were roundly defeated, except in one school: Graves, which is the area where the Bruderhof reside.

County Executive Patrick Ryan

Before his election, Patrick Ryan came out against the lack of affordable housing in the project, as he explained in a 2019 RadioKingston interview. In September of that year, the developers agreed to add 14 affordable units, but only for people earning between 60-110% AMI, which given the influx of wealthy New York City residents during the pandemic, could mean people earning six figures.

Once elected County Executive, Ryan changed his tune. Before the crucial School Board vote in Dec. 2020 on the tax break, he called at least two, and possibly more, trustees to press for a Yes vote. In the case of Herb Lamb, it wasn’t even a half hour after he told Ryan he couldn’t support the tax break that Milgrim got on the horn to ratchet up the pressure.

“We have to make decisions based on the public interest for the greater good,” Ryan said in the 2019 interview. It wasn’t clear how allowing developers to build a $55 million + property entirely on the public dime — paid for by cash grants from the state, a local $30 million property tax break, plus the Opportunity Zone capital gains tax freebe — would serve the public good. With 129 apartments possibly slated for condo conversion, and with a Kingston population of 22,000, that means that 129 wealthy Kingston residents will get a luxury condo, while 21,871 Kingston residents will be shouldering the burden. Please explain the public good in that, Pat.

Fluid Mathematics

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