Battle Over Kingstonian Tax Break Plays Out in Kingston School Board Election

“Governments go to war directly or by proxy without declaring war. Force, or threat of force, are constantly used to dominate…” — Seán MacBride

May 14, 2021

Kingston, NY – In what is shaping up to be a referendum on tax breaks for luxury housing, two local officials have fielded family members in hopes of flipping the Kingston School Board to favor a $30 million subsidy for the proposed Kingstonian development.

Ulster County Legislator David Donaldson’s son-in-law Mathew Branford and Ulster County Deputy Executive John Milgrim’s wife Michele are vying for two of the three seats on the nine-member school board up for grabs in the May 18 election.

A successful run by the two would create a 5-4 majority in favor of the tax break, paving the way for a new vote that could bolster the developers’ chances of winning ongoing and potential lawsuits. The disputed $30 million tax break has divided the community, and a wealthy property owner not involved in the project has filed lawsuits whose outcome could hinge on a new vote. Moreover, such a new board might seen as willing to support generous tax breaks for market rate housing projects that have yet to be presented.

A candidates forum was scheduled for Monday, May 17, the eve of the election, on RadioKingston.

The challengers have sidestepped answering whether they would have supported the tax break, a direct Yes or No question that appeared in a survey by the KCSD Coalition for Equity, a parents’ group. Instead, they offered up well-worn talking points from the developers’ playbook. Donaldson’s son-in-law Branford repeated the dubious complaint that the developers were blocked from presenting to the entire School Board; said the Board should look to city and county for advice on “complex” projects, presumably a reference to the Kingstonian, and added that it was “vital” for the Board to encourage business investment. Milgrim’s wife said one of her goals was to facilitate communication with the business community.

The deadline for petitions was April 28 at 5:00 PM. Branford’s father in-law Donaldson, who is chair of the Ulster County Legislature, hand-delivered them at 4:20 PM that afternoon. The overwhelming majority of signatures on the petitions belonged to government officials and their relatives; business associates of the developers, or members of a religious group also known to do business with developer Brad Jordan.

The trustees whose ouster is sought by the developers — Jim Shaughnessy, Robin Jacobowitz and Herb Lamb — voted against the tax break on Dec. 2, 2020. The tax break is $30 million over 25 years, and the developers have offered to pay $5 million instead. The school district receives about 60% of property taxes and in this case would forgo about $16 million.

The two politicians running their relatives have been the public face of Ulster County government support for the multi-use luxury housing development known as the Kingstonian. Donaldson has been an Ulster County legislator since 1994. Deputy County Executive Milgrim is a former employee of Gov. Andrew Cuomo, who awarded $10 million in state grants to Kingston, most of which was allocated directly to the Kingstonian or for property nearby whose improvement would benefit the Kingstonian.

The challenge to the School Board is the latest in the series of chess moves employed by local government and the developers to silence community opposition and sidestep regulatory hurdles.

The day after the School Board rejected the tax break on Dec. 2, 2020, the developers issued a threat that voters would have the “opportunity to weigh in” during the May school board elections.

“School Board President, [sic] Jim Shaughnessy has been a vocal opponent of this project from the onset and recently has seemingly made it personal. He has publicly spoken out against it on numerous occasions despite the fact he knew he would be charged with impartially reviewing specific aspects of it at a later date. Ultimately, the public will have the opportunity to weigh in on this in May,” the developers posted on their website Dec. 3.

Documents filed with the Ulster County Clerk as part of a Freedom of Information Law request show the developers exchanged emails as early as 2018 discussing the need for School Board support. In the past, local agencies required School Board approval for similar projects, but when the School Board voted down the tax break, the agencies ditched those requirements.

Parents group sends questionnaire about tax break.

The KCSD Coalition for Equity’s survey included a question on how the candidates would vote with respect to the Kingstonian’s tax break.

Both Milgrim and Branford said the school administration had never voiced an opinion to the School Board about the tax break. It was not clear what exactly they meant by “administration,” but the school board, not the administration, is entrusted with decisions on tax breaks, according to School Board President James Shaughnessy.

Superintendents possess the right to speak on all matters before the board, and in some instances must do so, but there is no requirement to do so with regard to a PILOT tax break.

The challengers also repeated developers’ claims they were prevented from presenting to the entire School Board. “The board was never fully briefed on the project,” wrote Branford.

Documents show that the developers wanted to make a presentation in secret, in what is known as executive session. The School Board attorney said that would violate the Open Meetings Law, but that one trustee was allowed to hear the private presentation. James Michael, the Board’s Finance Chair, was chosen, and he duly reported to the remaining trustees.

Moreover, the trustees studied the developers’ application for the tax break, outside economic analyses, and several proposed repayment schedules.

More dog whistles for the Kingstonian team were in Milgrim’s personal statement. On her KSD bio, she wrote, “My dream for the school board is to become a cornerstone that facilitates communication with our parents, staff, faculty, administration and business owners.” While communications with stakeholders is listed in the trustee job description by the New York State School Boards Association, so is “aligning district resources to improve achievement,” as is maintaining “strong ethical standards.” There is no mention of business owners.

Yet another dog whistle was her opinion that the school board should “cultivate our youth so they continue to live, work and raise their own families in our community.” That references the developers’ talking point that the Kingstonian will be a magnet for high school graduates. Last year, Milgrim’s daughter wrote a letter to the editor at the Daily Freeman urging that votes against the tax break “be re-evaluated” and opining that if the Kingstonian wasn’t built, students wouldn’t come back home to start their families and careers.

However, the developers say they’re only going to create a handful of low wage jobs.

The personal statement for Donaldson’s son-in-law is even more blunt. He says one of the top priorities for the board of education is to invest in buildings and infrastructure for the future. It is true that school infrastructure falls within the purview of a board trustee. But Branford’s choice of words indicates a larger scope.

The survey sent out by the KCSD Coalition included the following question.

Q: If you were already on the Board of Education in 2020, did you vote in favor of the PILOT for the Kingstonian? If you were not on the Board of Education in 2020, would you have voted in favor of the PILOT for the Kingstonian if you had been on the Board at the time of the vote? Please answer yes or no and briefly describe your rationale.

Milgrim’s Answer: A board member should be active members of the process. As a nonincumbent, I was not afforded the opportunity to seek advice from the Administration as to this vote, or to question the developers regarding their plans. To my knowledge, the Administration never made a public recommendation on that PILOT while the governments of the City and the County fully supported it. It is the school board’s responsibility to focus on the education and opportunities for the students which will be my primary goal as a member of the board of education.

Branford’s Answer: I believe that the board’s mission is the education of our students and returning a great value for the taxpayers in our community. While the board is not directly involved in economic investment in our community, the board should be responsive and knowledgeable on such matters. I will commit to examining the details of any public and private partnership, if the information is fully presented to the board. It is vital that we remain active in encouraging business investment in our community. Specifically to The Kingstonian project, the administration did not recommend a course of action to the board, and the board was never fully briefed on the project. Where possible, the board should look to city and county leaders for advice on complex investment projects, while listening to community input. It is imperative that should the board need to make a decision, all stakeholders are fully represented.”

What about the petitions?

Donaldson’s son-in-law’s petitions, Part1 and Part2, contained 79 signatures. Of those, 50 belonged to members of the Bruderhof, eight to government officials, and 11 were relatives of the officials or business associates. Only ten belonged to people whose connections were unknown.

Milgrim’s petition listed 138 signatures, and again, 50 signatures belonged to Bruderhof members.

Here is an Excel spreadsheet with the respective signatures and a sheet comparing the Bruderhof signatures on both petitions.

Shaughnessy’s petition also contained signatures of Bruderhof members who live in another community, but it was not clear whether the business ventures of their religious group would determine their votes.

The Bruderhof Connection

In early 2017, just as plans for the Kingstonian were taking shape, the Kingston Local Development Corporation agreed to sell the Bruderhof a building in Kingston’s Business Park.  A former member of the Kingston Local Development Corporation who asked to not be identified said developer Brad Jordan steered the property to the Bruderhof even though five other buyers had made offers. According to the former KLDC member, a real estate agent representing one of the other businesses 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.

The KLDC is a local group of appointed officials tasked, among other purposes, with disposing of property that belongs to the City of Kingston, including the 21 N. Front St. parking lot that would join with Jordan’s property to become the Kingstonian. The original documents seeking developers for the City-owned property prohibited conflict of interest, but nevertheless, Jordan continued to sit on the KLDC until early this year, when he resigned to avoid the appearance of impropriety when the property is transferred to his development.

It would not be the first time the Bruderhof’s actions have invited scrutiny. Churches are exempt from many taxes because of the religious status, but in return, the Johnson Amendment bars them from endorsing candidates.

The Freedom from Religion Foundation is a watchdog group that promotes the separation of church and state. President and co-founder Annie Laurie Gaylor noted that while individuals living in a church community have rights to sign petitions, “It’s certainly a smoking gun that 50 out of 100 all have the same address. It certainly indicates that this was organized by somebody within the church.”

Gaynor said the signatures alone don’t prove that it was illegal, but “if the minister or head of this church was to get up with a candidate petition and instruct or encourage everybody at a church service to sign, that would be crossing the line.”

However, former President Donald Trump welcomed political action by churches. He announced he “got rid” of the Johnson Amendment, even though “he didn’t he didn’t have the right as President to repeal an act of Congress, but that gave a lot of churches the green light to … violate that law,” said Gaynor.

Shaughnessy noted that he had collected signatures from Bruderhof members also, although they lived in a different community. In school board elections, the same people can sign petitions for as many school board candidates as they like.

But the School Board already voted. Also, the IDA changed its rules so the School Board’s vote didn’t matter. Why do the developers still care?

Three possible reasons.

First: Existing and potential lawsuits may turn on the IDA’s own rules requiring consent from the three jurisdictions (Common Council, County Legislature and School Board) that they ditched the day of the vote so they could award the PILOT.

Up until January, the IDA required a Yes vote by the three taxing jurisdictions that stand to lose revenue – Ulster County, the City of Kingston, and the School Board. But the School Board voted no, so on Jan. 20 the IDA changed its rules to jettison requirements for the School Board’s approval and promptly granted the tax break.

The IDA cited a loophole that their UTEP – another set of rules — did not require unanimous local consent for the kind of tax break that lasts as long as the one in question. This kind of tax break is known as a deviated PILOT. But up until a few years ago the UTEP did require unanimous consent from the taxing jurisdictions for deviated PILOTs.

Deputy Mayor of New Paltz KT Tobin said the IDA thumbed their nose at any reasonable interpretation of the law. Even the IDA’s own lawyer, Joe Scott, called the UTEP rationale “an out” – in other words, a loophole, a lame excuse.

Second: The KLDC still needs to accept the 21 N. Front St. property in order to then gift it to Jordan and the other developer, Joe Bonura, and their unidentified investors. It is not clear whether this will require a new vote.

Third: To forestall future lawsuits. For example, the Mount Vernon School Board has filed suit against the local IDA and Mayor in a case that resembles the situation in Kingston.

In addition, the tide is starting to turn against Industrial Development Agency behavior. In Orange County, the District Attorney is investigating its IDA.

Last night, the KCSD Coalition for Equity voted to endorse the three incumbents, despite displeasure with some of their positions, on grounds that the challengers were not truly invested in the School District and were running primarily because of unrelated reasons such as the Kingstonian. At the meeting, the wife of a Kingston Common Council member who supports the Kingstonian urged those in attendance to not be misled by “paranoid” thinking about the challengers. This provoked objections from one parent, and the moderator quickly intervened to put a halt to the dispute.

On Wednesday, the Village of New Paltz voted unanimously for a moratorium on IDA tax breaks.

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