NEWS RELEASE

FOR IMMEDIATE RELEASE Contacts: UCIDA CEO, Lance Matteson (845) 338-8840, Ext. 214 (845) 389-3300 cell lmatteson@ulsterny.com UCIDA Chair, David OHalloran (845) 853-4967 cell

UCIDA Lays Out Facts re Birchwood Project

December 19, 2011, Kingston, NY. The Ulster County Industrial Development Agency (IDA) today issued the following summary of key facts regarding the background of the Birchwood Village project: On March 25, 2004 Birchwood Village filed an application for IDA benefits. A public hearing was held May 10, 2004 and the IDA Board approved the project on May 26, 2004. The approval included a ten year payment in lieu of taxes (PILOT) provision, which required no PILOT payments (effectively, no property taxes) on the improvements for three years (2006-2008), then payment of 25% of the property taxes otherwise due for three years, followed by five years at 50% of the normal rate, after which the IDA PILOT would end and regular applicable tax rates would apply. For the first three years of the project, per the agreement, Birchwood paid property taxes on the land but no PILOT payments on improvements. PILOT payments on the improvements were to begin in the fourth year. Based on information provided by the local municipalities, Birchwood in fact has paid no such PILOT payments. (In addition, based on information provided by the local municipalities, Birchwood did not pay property taxes on the land starting in the fourth year. Land is subject to normal property taxes and is not affected by the PILOT.) The PILOT payments were thus never distributed to the affected taxing jurisdictions that is, the City of Kingston, the Kingston City School District, and Ulster County. The total due is $331,245.28 including penalties. Birchwood disputed its assessment with the City of Kingston, but this did not involve the IDA, as the Assessor alone is responsible for the assessment of properties. In June and July of 2011, after an internal agency compliance review, the IDA Board decided to pursue formal enforcement of two different PILOT agreements that were in arrears at that time, including the Birchwood project. The Committee and Board followed the same procedure for both projects, starting with letters to the project applicants expressing concern about nonpayment.

In both cases, the IDA Chair and IDA staff have worked closely with representatives of the local municipalities and school district to ensure that the PILOT payments were paid and settlements were reached. No settlement was signed in the Birchwood matter, despite considerable efforts. In the case of the other project, the applicant made PILOT payments and is nearly current on the unpaid amounts. On September 21, 2011 the IDA Board authorized the Chair to issue a letter of default to Birchwood through legal counsel if no settlement were signed by its November 16, 2011 meeting. On that date, however, the Board decided to provide Birchwood with an additional month to complete a settlement agreement. Finally, at its December 14, 2011 meeting, the Board voted unanimously to send the letter of default immediately. The motion to do so was made by Steve Perfit. It was seconded by Robb Kinnin, and the other members present and voting were David O'Halloran, James Malcolm, John Morrow, and Paul Colucci. One member of the IDA was absent. IDA member Steve Perfit, who made the motion and is the IDAs Treasurer and Audit Committee Chair, said, This was a straightforward enforcement decision of the Board and was strictly on the merits. Note that the applicant still has plenty of time to cure the default. IDA Chair, David OHalloran, said, The IDA gave this applicant every accommodation available within our policies during this work-out period. Unfortunately, the applicants inability to provide a payment plan to address past due PILOT payments and property taxes resulted in the sending of a default notice. The IDA supports tax benefits to foster economic development. But in fairness to both taxpayers and complying IDA applicants, we cannot afford to overlook non-performing applicants who have received tax benefits. About the Ulster County Industrial Development Agency The UCIDA is a public authority authorized by the State of New York, with members appointed by the Ulster County Legislature. The UCIDA offers taxable and tax-exempt bonding for business expansion and relocation. UCIDA can also offer real property tax abatements, mortgage recording tax abatements and sales tax abatement during construction. The Ulster County Development Corporation (UCDC) has been contracted by the UCIDA to administer and promote the UCIDA programs. For more information about visit: www.ulstercountyida.com. #### the Ulster County IDA, please