Friday, September 14, 2012

A Controlling Interest

There have been many questions about Rick Scalera's dual role as "special adviser" to the Galvan Initiatives Foundation and his activities in City and County government, and we all recall that Tom Swope was the chair of the Historic Preservation Commission right up until the moment he went to work for Eric Galloway full time as executive director of the foundation. Now it seems Galloway has another emissary on the HPC: Peggy Polenberg. 

The majority of the projects that come before the HPC are Galloway projects. Sarah Sterling, former First Ward alderman and now supervisor for the First Ward, recently revealed, in a letter sent to Mayor William Hallenbeck, city attorney and HPC counsel Cheryl Roberts, Common Council president Don Moore, and HPC chair David Voorhees, the extent to which Polenberg, who was appointed to the HPC by Hallenbeck in May, is in the employ of Galloway and benefits financially from that relationship. The following is quoted from Sterling's letter:    
A situation has come to my attention that seems to indicate a huge conflict of interest regarding the Historic Preservation Commission and I would like your opinions.
Peggy Polenberg, who is now a member of the HPC,  has been the buyer's agent, representing Galvan, for seven properties since the beginning of 2011.
238 Allen Street
250 Allen Street
68 South 2nd (The Robert Taylor House)
438 Union Street
9 Union Street
70-72 North Fifth
238 Union Street
A total of $857,000 in sales upon which she received commissions. . . .
It is well known in the real estate community that Eric uses Peggy exclusively for his real estate purchases that are listed on the local real estate MLS.  (If she has helped him on other private sales there would be no public record of it.)
It looks to me that it's a direct conflict of interest if Peggy takes part in any HPC conversations regarding any properties that Galvan owns under any of their holding names. I question how effective she can be on the Historic Preservation Commission when she must absent herself for any discussions regarding Galvan properties when they seem to be presenting applications at every meeting. All of the above properties are in historic districts and certainly the Robert Taylor House has been presented recently. It doesn't appear that she has ever mentioned her ongoing financial connection to Galvan or ever recused herself.
It is likely that this situation will be a topic of discussion at today's HPC meeting, which begins at 10 a.m.


  1. It doesn't get much clearer than this !

  2. Seems like a very efficient set-up. Much quicker for the Lords of Poverty this way.

    Good ol' Hudson New York!

    -- Jock Spivy

  3. Is there anything that's not rigged in this place?

    The Historic Preservation Commission needs our constant attention and support if it is to work in the way it was intended.

    In that case, a special thanks to Supervisor Sterling and to Gossips for their vigilance.

    I was once fooled into believing that the HPC had done something terribly nasty vis-a-vis my own interests. It was only following DV's copious researching of the matter that the truth of the circumstances was revealed.

    Since then I have a clear picture of the kinds of forces working against the HPC. They would astound any honest person.

  4. The City of Hudson needs definitive rules on how conflict of interest situations will be handled. It is not enough to prevent those with conflicts to simply be prevented from voting on a project. Because it appears that the Galloway projects are employing many individuals who sit on Boards or hold political office in the City of Hudson, these individuals should be made to make a choice; resign from either position to eliminate the conflict. Enough is enough. Not only is Galloway buying up the town, now he has key people in his court who can influence decisions being made on his projects. There has to be a stop to this. A conflict of interest policy should be put on the agenda to be voted on by our representatives immediately.

  5. What Hudson needs to do is to adhere to the rules and laws it already has!

    At §C12-23 we read that "the Common Council shall have exclusive power to lease to property belonging to the City ..."

    In 2003 the law was in effect, but then Mayor Scalera decided on his own to give a 5-year lease of the city dock to Guy Falkenheimer, owner of "The Spirit of the Hudson."

    Amazingly, in 200, the Common Council met to discuss what was reported as "the lease that [Falkenheimer] has with the city," a lease which only they could have authorized but never did.

    And the result of their meeting was to back down from Falkenheimer's demand that the city not compete with his sales of alcohol.

    We don't need more rules if the rules we already have don't mean anything.

  6. A number of people have been keeping the pressure up to make all of those with conflicts absent themselves from the room when issues are being discussed which cause the conflict. Hudson has an ethics code and it is very clear. It is just making sure that the code is followed that is the hard part.

  7. Thank you Sarah Sterling, for bringing this issue to light. And thank you Gossips, for covering it.

    I hesitate to jump on this particular bandwagon; I'd rather bury my head in the sand and pretend Hudson isn't being swallowed whole by the Galvan Foundation. But I cannot... and I've been thinking about something. The recipient of the largest grant award- $40k of a previously pledged $80k- announced by Galvan in July was Perfect 10- an organization that helps at-risk teenage girls in Hudson. The founder of this group is Paula Forman, wife of Philip Forman who sits on the HPC. If a monetary gift of this sum doesn't directly create conflict of interest, perhaps it is meant to curry favor, and thus creates indirect conflict of interest. Am I alone in such thinking?

  8. Good question!

    According to the City of Hudson's Code of Ethics at §20-1 ("Statutory authority; purpose"):

    "The rules of ethical conduct of this chapter as adopted shall not conflict with, but shall be in addition to, any prohibition of Article 18 of the General Municipal Law ..."

    From Article 18 of the New York state General Municipal Law:

    §809. Disclosure in certain applications.

    "1. Every application, petition or request submitted for a variance, amendment, change of zoning, approval of a plat, exemption from a plat or official map, license or permit, pursuant to the provisions of any ordinance, local law, rule or regulation constituting the zoning and planning regulations of a municipality shall state the name, residence and the nature and extent of the interest of any state officer or any officer or employee of such municipality or of a municipality of which such municipality is a part, in the person, partnership or association making such application, petition or request (hereinafter called the applicant) to the extent known to such applicant.

    "2. For the purpose of this section an officer or employee shall be deemed to have an interest in the applicant when he, his spouse, or their brothers, sisters, parents, children, grandchildren, or the spouse of any of them

    "(a) is the applicant, or
    "(b) is an officer, director, partner or employee of the applicant, or
    "(c) legally or beneficially owns or controls stock of a corporate applicant or is a member of a partnership or association applicant, or
    "(d) is a party to an agreement with such an applicant, express or implied, whereby he may receive any payment or other benefit, whether or not for services rendered, dependent or contingent upon the favorable approval of such application, petition or request. ..."$$GMU809$$@TXGMU0809+&LIST=LAW+&BROWSER=BROWSER+&TOKEN=52369846+&TARGET=VIEW

  9. To continue the concern and to follow the thread, my understanding is that Philip Foreman also sits on the Assessment Review Board. Does anyone know if in fact some of Galloway's properties were given a sizeable tax decrease (I would assume it would have been 2011-2012 time frame)? I do not want to address the possibility of conflict of interest unless the actual facts are brought forward by someone who has access to this information. Can anyone shed light on this with additional details?

  10. Members of boards and committees are provided at the City of Hudson website:

    The General Municipal law cited may or may not apply to this situation. To give the gentleman the benefit of the doubt, Mr. Foreman may have already learned what is and isn't a conflict of interest in this situation. He may be the best expert on the question.

    If that's the case, then he will have discussed this already with his respective boards. Even if it turns out there is no conflict of interest, that was the proper thing to do.