Monday, October 7, 2019

About the Special HDC Meeting Tomorrow

For more than three years, Hudson Development Corporation (HDC) has been trying to purchase a tract of land that belongs to CSX. In December 2016, Senator Chuck Schumer came to Hudson to show his support for the purchase. Indeed, Schumer wrote a letter to the CEO of CSX encouraging the sale.

Back then, it was maintained that the parcel was critical to the $25 million redevelopment project proposed by Sustainable Community Associates (SCA) for the abandoned Kaz warehouse site because it would give direct access to the site from Front Street. So essential was the parcel to the project that, in March 2017, HDC announced that the SCA project was put on hold until the CSX parcel could be acquired.

Much has happened since then. The SCA plan was ultimately abandoned, and HDC did a second RFP (request for proposals) for the site early in 2018. That RFP brought responses from three developers: Bonacio Construction, Kearney Realty & Development, and Redburn Development. It also brought a hail of criticism from elected officials and members of the public about HDC's lack of transparency and failure to involve the public in its planning. In May 2018, the ordeal resulted in the resignation of four members of the HDC board and that of the board's legal counsel.

Since then, with new members and new leadership but without an executive director or much of a budget, HDC has been working to regroup. But through all the upheaval and change, HDC has remained steadfast in its commitment to acquiring the CSX parcel. The goal is now in HDC's sights. HDC has a loan from Columbia Economic Development Corporation for $200,000 to cover the purchase price ($175,000), as well as the closing costs and cost of the survey and environmental review already done. But it seems the acquisition was almost jettisoned by the decision on September 26 to cancel the Planning Board meeting for October, which was to take place on Tuesday, October 8, when Yom Kippur begins at sunset.

Subdividing the seven-acre parcel now owned by CSX requires review and approval by the Planning Board. Getting approval for the subdivision was a necessary part of HDC's due diligence before closing on the sale. The application for review was initially submitted on August 7--too late to make it onto the Planning Board's agenda for its August 13 meeting. As a consequence, the application was not presented to the Planning Board until its September meeting, at which time the board declared the application "substantively complete" and scheduled a public hearing for October 8, after which it was expected the Planning Board would make its decision on the subdivision proposal. According to Gossips' notes from the September meeting of the Planning Board, it was stated at that meeting "the purchase was expected to close at the end of October or early November." 

All seemed to be proceeding on schedule until it was announced that the October meeting of the Planning Board was being canceled, and the Planning Board would not be meeting again until November. Gossips got the news about the canceled meeting on September 26 from Planning Board chair Walter Chatham and reported it the same day. In explaining why skipping the October meeting was not a problem, Chatham wrote, "HDC has until the end of the year to get approval from the [Planning Board] and close on the CSX property." According to Chatham, that was what he had been told, but it seems that wasn't true. A letter dated August 23, from the real estate director for CSX to Steve Dunn, who serves as HDC's legal counsel, set the following deadlines:
Seller and Buyer desire to modify the terms of said Purchase-Sale Agreement to extend the Due Diligence period to October 15, 2019, for the purpose of obtaining approval from the City of Hudson Planning Board to the subdivision of the subject parcel as required pursuant to the terms of the above referenced contract. Buyer shall endeavor in good faith to obtain such approval from such Planning Board. The failure of Buyer to obtain such approval after having endeavored in good faith to do so shall be the sole reason and right that Buyer shall retain to terminate the contract between the parties during the due diligence period without any further contractual liability.
The closing date shall be not later than October 31, 2019.
Canceling the October 8 meeting of the Planning Board and not rescheduling it during the month of October could have had the unintended consequence of jettisoning the deal with CSX that HDC had worked for three years to achieve.  

In response to the news that the October meeting of the Planning Board had been canceled and the application for subdivision approval would not be considered until November, HDC board chair Bob Rasner and Dunn submitted a formal request to CSX to extend the dates of the agreement. They were told that there was a second buyer interested in the property, and the dates would not be extended.

Gossips learned this morning that a special meeting of the Planning Board has been called for Friday, October 18, at 6:00 p.m., at City Hall. The sole purpose of the meeting is to consider the application for the subdivision of the CSX property. So it seems, assuming that the Planning Board approves the subdivision, HDC will be able to carry out its due diligence and still close on the purchase by October 31. The only question seems to be what the consequence of HDC not completing its due diligence by October 15 might be. It appears to be this: HDC would no longer have the right to terminate the contract if the Planning Board failed to approve the subdivision. 

The issue of due diligence and subdivision approval, although it appears to have been resolved, is expected to be a topic of discussion at tomorrow's special meeting of the HDC board.

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