After more than six months of on-again, off-again discussions, Ulster County’s Industrial Development Agency has moved formally to terminate developer Steve Aaron’s 2005 Pilot (Payment in Lieu of Taxes) agreement for failure to pay his taxes. Despite Aaron’s pleading for more time to negotiate an agreement, the IDA board’s unanimously approved the resolution at its regular monthly meeting this Wednesday morning.
The IDA claims Aaron owes the city, school district and county a combined $437,000 (including 2012 taxes). Aaron, appearing before the board for the first time, contended his $8 million city assessment was “in the stratosphere” for the 80-unit Birchwood Village workforce housing project on Flatbush Avenue in Kingston. Under the Pilot agreement, he paid nothing on improvements to the property for the first three years after the complex opened in 2006. He has disputed his tax treatment since.
A sometimes irate David O’Halloran, chairman of the IDA board, said time was up.
“We’ve been talking about this since last June,” he told Aaron. The developer was formally notified in December that his Pilot could be terminated unless he came to an agreement with the IDA. Normally, such notification sets a 120-period in motion to effect a “cure.”
Under the resolution approved by the IDA, Aaron must pay some $75,000 in city (2012) taxes and $11,000 in legal fees or face immediate termination of the Pilot deal. Aaron, who said he’s incurred “six figures” in IDA-related legal fees, said he’d meet this week’s deadline for payment. He said he’d confer with his lawyers regarding the resolution’s other dictates.
O’Halloran and Ulster town Supervisor Jim Quigley III contrasted Aaron’s record to the Hudson Valley Head Trauma Center’s prompt payment of back taxes when called to account last July. Aaron placed $50,000 in escrow, which was refunded in November.
“The head trauma center owed $760,000 [last summer] and came in with $130,000 and added $370,000, a month later, all in good faith,” Quigley said. “They’re paying $7,500 a month to liquidate the balance, all this without a formal agreement with the IDA.”
Aaron said later that he was in a “legal black hole” because a Supreme Court judge had ordered him and the IDA to arbitrate 2009 taxes.
It was at times was a tense exchange. O’Halloran said Aaron’s legal issues were not relevant to the tax bills he owed. He added further that the IDA’s credibility would be at stake if municipalities thought the agency had been less than diligent in enforcing Pilot agreements.
Two IDA members briefly argued Aaron should be given more time to negotiate with the board. County Deputy Planning Director for Economic Development March Gallagher had left before that discussion took place. The county is owed just over $24,000, according to documents presented at this week’s IDA board meeting.