By Alberto Gilman
The City of Newburgh Industrial Development Agency approved Foster Supply Hospitality’s payment in lieu of taxes [PILOT] for their hotel project with a Local Labor Policy adopted.
The reported PILOT sees a 90% tax exemption during the first six years of a 12 year timeline and the Local Labor Policy adopted will allow for City of Newburgh workers to be hired for the project.
FSH, a hospitality company, looks to convert the former Masonic Temple, YMCA and American Legion buildings located on Grand Street into a fully functioning hotel and venue space.
FSH is also anticipated to work with State University of New York [SUNY] Orange in providing educational programs and resources in the hospitality industry.
FSH had also returned before the IDA with a revised Project Budget cost due to rising costs in construction, financing, engineering, machinery, and renovations.
The total revised cost for the project now stands at $29.9 million, whereas before it was $24.4 million. The application also lists a new $1.7 million in revenue within the first two years of operation.
Councilwoman Giselle Martinez, who lives in Ward 1 where the properties are located, shared her thoughts on the approved PILOT.
“I am in support of this project [FSH Hotel]. I want Newburgh to flourish and am in support of expanding our tax base. However, my concern with the PILOT agreement remains,” Martinez said. “At the [public] hearing, I had advocated for a negotiation of a better deal. Although the buildings [48, 54 and 62 Grand St.] were previously not on our [City of Newburgh] tax roll and can see why this may seem as a better option to receive something as opposed to nothing, a 12 year PILOT that exempts 90% of property taxes for the first 6 years is excessive. My hopes now that PILOT has been approved are that this project will be able to bring in community benefits, hire local, and include unions”.
Senator James Skoufis, whose office is directly across the street from the proposed FSH project shared his thoughts on the recent passage of the PILOT.
“While I fundamentally believe the City of Newburgh could have gotten a more beneficial agreement had the IDA better challenged the applicant, I am glad they responded to two of my concerns and forced an amendment to the PILOT deal, requiring Foster Supply Hospitality to use local labor during the project’s construction and employ local residents to fill the permanent hospitality jobs,” Skoufis stated. “As a result of these discussions, the IDA has also adopted a local hiring policy for any and all new project applicants that come before them. Going forward, I urge taxpayers to be vigilant about evaluating proposed PILOT agreements before the IDA, and to speak up. When something seems like a raw deal, it probably is. In the meantime, I welcome our new neighbors on Grand Street and look forward to seeing those good-paying jobs and a hospitality training program bear out.”
Maureen Halahan, President and CEO of Orange County Partnership, also shared comments on the PILOT approval for FSH.
“Foster Supply Hospitality will be breathing new life into the City of Newburgh as they repurpose 3 tired and old buildings and put them on the tax roles for the first time. The revitalization of the Grand Street buildings will open a corridor of opportunity for City of Newburgh residents, creating over 60 full time jobs,” Halahan said. “Foster Supply and SUNY Orange are working together on a hospitality program at the Newburgh Campus which will graduate students fully trained to enter the field with expertise. This monumental investment in the City of Newburgh is a perfect example of private investment working together with public entities to develop opportunity for the City of Newburgh and residents of Orange County”.