The Council President and the HDC

In his opening remarks at yesterday's meeting of the Hudson Development Corporation Board of Directors, board president Bob Rasner recounted the year past, touching on HDC's response to the pandemic and the challenges that the City faced as a consequence of the pandemic. Rasner concluded with this statement:

. . . the City is seeking solutions to the [fiscal] crisis by exploring sales of its real estate holdings. At the first meeting of the Council’s ad hoc committee for this purpose, Chairman DiPietro suggested a sale of One North Front Street as one of the options. The Committee’s discussions noted that the entire building is encumbered by two leases, to our organization and the Columbia County Chamber of Commerce. 

As you are aware, one project ahead of the HDC this year is a completion of the review and updating of our by-laws by our committee Paul Barrett and Martha Lane. 

Today you will be asked to discuss one topic being considered by this committee, Conflict of Interest . . . to wit:

• Is it a conflict of interest for elected officials to serve as voting members of our Board? 

• Is it a conflict of interest for our lessor to serve as a voting member of our Board? 

• AND is it a conflict of interest for a voting member of our Board to seek ways to terminate the lease we hold with the City by searching for violations on the part of HDC over the entire term of the lease? 

This will not be an easy discussion, but it needs to be undertaken. 

Rasner's statement was prompted by a request for records made by Council president Tom DePietro, who made it known in an ad hoc committee meeting last month that 1 North Front Street was first on his first of properties he thought the City should sell to build back the fund balance, depleted in the last year making up for revenue shortfalls. HDC and the Columbia County Chamber of Commerce now occupy the building, and both have long-term leases: twelve-year leases with two more years to go and the option to renew for two more six-year terms. DePietro has referred to those leases as "sweetheart deals in which they pay no rent." In fact, the Chamber of Commerce pays $850 a month in rent. HDC's first twelve years are rent free, because HDC contributed $150,000 to the restoration of the building in 2010. At the ad hoc committee meeting, DePietro alleged that "HDC has not lived up to their part of the bargain."

DePietro has requested the following information from HDC:

• HDC's financials for 2010 and 2011
• Minutes for 2016 (they appear to be missing from the website)
• How much did the HDC spend on improvements to Washington Hose?
• What exactly were the improvements?
• How does HDC currently account for these improvements on its balance sheet, and at what value?
• Over the past ten years, has the HDC used their office for any job training, and if so, what are the details?
• Does the HDC carry the insurance required by paragraph 13(a) of the lease ($1,000,000/general commercial liability insurance for claims of injury or property damage and naming the city as an additional insured)?

Believing that in making the request DePietro was "looking for a reason to evict [HDC] based on breach of lease," Rasner asked for a FOIL request. He explained yesterday that he had done so "to force public discussion." 

Phil Forman, who serves as treasurer of the HDC board, asked, "Is there a legal definition of 'sweetheart deal'"? He noted that HDC had invested in the restoration of the building. He also asked, "When someone asks for ten years of insurance records, what are they looking for?" He then answered his own question: "It looks like a transparent attempt to break the lease."

In the end, it was decided, by a vote of the board, that HDC would give DePietro the information he sought without a FOIL request. It was also revealed that DePietro is no longer pursuing the sale of 1 North Front Street--something he told the Chamber of Commerce president before mentioning it to anyone at HDC. According to DePietro, because of the American Rescue Plan and an AIM (Aid and Incentives for Municipalities) payment being partially reinstated, "The urgency is not as strong." There is, however, a plan for selling 429 Warren Street, the location of the Code Enforcement Office. That plan will no doubt be revealed at the ad hoc committee meeting scheduled for 5:00 p.m. today. Click here to join that meeting.

There was no actual discussion about changing HDC bylaws to exclude the two ex officio members of the board--the mayor and the Common Council president. Jeff Baker, counsel to the Council, however, reminded the board that "as an LDC [local development corporation], it is expected that you have a close relationship with the municipality." At one time, there were four elected officials serving ex officio on the HDC board: the mayor, the Common Council president, and the majority and minority leaders of the Common Council. At the end of 2015, the board voted to amend its bylaws to limit the elected officials on the board to just two: the mayor and the Council president. 

Regarding 1 North Front Street, Gossips wrote about it often in the years when its future was being determined. In fact, the post that inaugurated The Gossips of Rivertown in January 2010 was about the building, then known as Washington Hose: "A New Plan for Washington Hose." Additional posts about the building and its restoration and adaptive reuse can be found here, here, here, and here. The second of the additional posts is particularly interesting since it reports that Peter Markou, then the executive director of HDC and HCDPA, "has given up on the notion of HDC owning the property for the unusual reason that the deed which transferred the land on which the building sits from the Proprietors to the City of Hudson in 1795 cannot be found." That could well remain an impediment to selling the building today.

COPYRIGHT 2021 CAROLE OSTERINK