August 13, 2009: Phoenicia Times: Is Crossroads Gambling? Spitzer-Gitter Deal On The Ropes Over Forest Land Appraisal Issue


Is Crossroads Gambling?

Link to complete article is here:
http://www.phoeniciatimes.com/phoenicia/followup.html#2

Counsel for developer Crossroads Ventures effectively told Ulster County legislators that the company is prepared to scrap its proposed project now 10 years into its review, and instead develop 1,215 acres on Belleayre Mountain… unless the legislature helps them get the price they want from the State to buy that acreage for the Forest Preserve.
“It’s not a threat,” said attorney Anthony Bucca, speaking before a well-attended special meeting of the county’s Public Works and Capital Projects Committee in the legislative chamber on August 7. “But you have to realize this is a business… If we don’t get the appraised value we want, then we’re going to build.”The land in question had been slated for “forever wild” preservation as a key component of a 2007 Agreement In Principal (AIP) to concentrate proposed resort development on about 750 acres of other company landholdings further to the west in Highmount. Current plans for two sites there call for a $400 million, 928-room hotel & lodging development with at least 5 times the square footage of Kingston’s Walmart complex, all contiguous with the state-owned Belleayre Mountain Ski Center. A state-required review of the conjoined facilities and proposed projects is ongoing.
At issue currently is a new agreement proposed by Crossroads to create licenses for two, 100-foot wide right-of-ways over the County-owned Ulster & Delaware railroad tracks separating the eastern section of its landholdings from Route 28 between Big Indian and Pine Hill. One of the two right-of-ways appears to abut an 11-acre property owned by former county legislative chairman Ward Todd which is shown on company maps as part of the Crossroads landholdings, although Bucca said the property was unaffected. The other connects the Rosenthal wells, one of two primary water sources for the proposed resort, with the main company landholdings.
As for why the licenses are now being sought, according to a July 10 letter to legislative counsel Dan Heppner from David Lenefsky, another Crossroads attorney, “Crossroads and the state have agreed on a purchase price but the state can only purchase at fair market value as attested by real estate appraisers. The enhanced access provided by the licenses may result in an increase in the appraisal estimates.”
Valuation of the property has long been contested. When the state’s intention to acquire it was announced nearly two years ago, its acquisition cost was placed at about $13 million or almost $11,000 per acre, based largely on a single “comparable” for a private parcel adjacent to Windham Mountain. When announced, the figure immediately drew public criticism as being two to three times higher than any other comparable land valuations in Shandaken or the Catskill Park. State Environmental Advisor Judith Enck who brokered the deal with Crossroads, quickly backed off the original dollar figure, saying more appraisals were needed. Multiple sources report such numbers are reflecting about half the dollar value initially agreed to by the state.
Bucca was forthright in explaining that the sole reason the company was seeking the new licenses was to increase the land value for these appraisal purposes. “There’s no hidden agenda,” he added, saying the purpose of the licenses is to “enhance the opportunity for the appraisal to match our asking price.”
Things were hot from the meeting’s outset, as committee member and District 2 legislator Brian Shapiro accused chairman Peter Loughran of Kingston of “trying to keep the issue secret”. Loughran shot back that the committee had been apprised of the matter for months. Majority leader David Donaldson gave some background, saying “Crossroads came to the legislature six years ago asking for an easement, we said no. It’s gone back and forth, the committee said no again. Then in the last six months the idea of these “licenses” came up.”
Shapiro and Don Gregorius who together represent the impacted communities in the county legislature, both expressed deep concerns as to the sobriety of the committee’s consideration of the request. “What are we, crazy,” said Shapiro, “to even consider something that would inflate the purchase price to DEC and to all the state’s taxpayers?.. I want to make sure I understand this, “ he continued. “With the license in place, it increases the worth of the property, right?
“Yes”, said Bucca.
“So (the license) is money?” said Shapiro.
“Yes,” replied Bucca. “So it’s money. If the state doesn’t buy this land, then we’ll have to develop it.”
Asked next by legislator Hector Rodriguez if not granting the license was an impediment to the land sale, Bucca said “No,” adding that “ we’d rather have it and not need it, than need it and not have it.” Why it might be needed apart from increasing the purchase price from the state remained unclear, as several parties present confirmed that DEC staff have indicated the agency has no interest in acquiring such a license.
“It’s not the state but the developer that’s asked for this,” said Gregorius, who also said he thought it would constitute a gift to the developer “with potentially unintended consequences,” and set a precedent “for anybody who has property adjacent to county land.” Others in the audience also questioned both the legality and the ethics of the county granting such a gift to a private corporation, and both Gregorius and Shapiro expressed concern about the tax implications for local residents of establishing artificially high valuations which could eventually impact all local landowners with higher tax burdens.
Legislator Susan Zimmet proposed as an alternative that if and when the land was sold to the state, and the state actually wanted licenses, the legislature could simply pass a resolution when it was needed.
“If you carry through on your threat,” asked Julie McQuain of the Hardenburgh Association of Residents & Taxpayers, “ what happens to the AIP? The whole thing will be vitiated.” Bucca responded by saying he couldn’t answer that question.
“The protection of these 1,200 acres as "forever wild" was a critical element for the Catskill Center for Conservation and Development in signing the AIP," said Lisa Rainwater, its Executive Director, when contacted the next day. “If Crossroads chooses to retain ownership instead of selling to the state, then a cornerstone principle under which we signed the AIP will be null and void. Under those circumstances, the Catskill Center would seriously reconsider its position. We would hope the company is not seriously considering such plans, but simply posturing to pressure the County for its financial advantage. We do not support any strategies used now or in the future that would inflate land values in order for a purchase price to be reached. The concept of the Belleayre Resort was to improve the economic conditions of residents in the Catskills – not saddle them with higher property taxes.”
Carolyn Zolas, speaking for the Sierra Club’s Atlantic Chapter which didn’t sign on to the AIP, was perhaps even more blunt:, saying “If the land isn’t acquired for the forest preserve, then the AIP is dead and Crossroads is back to square one for any development scenario. Development obstacles such as its steep slopes, access problems, and lack of potable water make this land extremely problematic, and therefore expensive and unlikely to be developed. So I think in the end it’s a hollow threat and a baldfaced attempt to pressure Ulster County officials into artificially inflating the cost of the property to New York State taxpayers. “
Given the intensity of the debate and the apparent need to better understand any potential impacts of granting Crossroads’ request, the committee postponed any official action and withdrew the resolution from consideration by the full legislature at its August 11 meeting. It is now a question whether the matter will ever move out of committee, where any reworked resolution would need to be passed by the full legislature.
In related news, Department of Environmental Conservation spoksman Yancy Roy told The Phoenicia Times on Monday that with respect to the developers long-awaited Supplemental Draft Environmental Impact Statement based on the 2007 AIP, " we have not received anything from Crossroads for our review." Whether such submissions will be forthcoming in light of the unresolved land purchase issue is unknown.
We’ll keep you posted.

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