Michael Berardi has been elected the new chair of the Ulster County IDA by the IDA board, following the resignation of March Gallagher, who cited an illness as the reason for stepping down. Berardi, a Democrat, was an Ulster County legislator for four years before declining to run at the expiration of his term last year.
Berardi said he supported the IDA”™s controversial requirement that IDA-funded projects must pay the prevailing wage to construction workers. He said pushing for the provision made for some “very, very tough years” serving on the IDA board due to criticism that it undermined the competitive nature of business, but was nonetheless the right thing to do. “It had to do with getting something back for all the tax exemptions we had granted through applications to the IDA,” he said. “The quickest way to recapture those tax exemptions was to give it back to the local people by providing them with the type of jobs that would enable them to raise a family and afford housing.”
Critics blame the prevailing wage provision for the lack of new projects in the county. While Berardi acknowledged there were some “classification difficulties” in terms of how the state Department of Labor decides the wage levels ”“ the amount for some trades is pegged to those in Westchester County, while others align with the lower levels in upstate counties ”“ he said the true cause of the dearth of projects is the overall economic slowdown, which is affecting not just the Hudson Valley but the entire country. The past practice of awarding companies that paid people less than the prevailing wage and didn”™t provide a benefit packages “was quite frankly abuse,” Berardi said.
However, he said he supported the IDA”™s recent decision to craft an exemption for the prevailing wage requirement as an incentive to keep long-time employer Empire Merchants North, a liquor distributor based in Kingston, in the county. “The board learned how competitive these economic development initiatives are. There are so many complexities and forces ”¦ we made the right decision. I owe a lot to March. She made us understand we had to put the best deal on the table.” (After the IDA approved the exemption, Empire Merchants North has failed to make an official announcement about its plans.)
Berardi credited Gallagher with instituting policies and introducing a level of accountability to the IDA that had been lacking in previous years. Before, “as long as an applicant paid the application fee, filled out the application and completed the cost-benefit analysis, (getting the benefits) was an automatic thing.” The IDA failed “to apply any type of qualitative judgment in terms of who got this enormous tax deduction,” Berardi said.
This type of abuse occurred with the Hampton Inn, he said, which opened last year in the town of Ulster. It applied for and received over $700,000 in tax breaks, consisting of an exemption from sales and mortgage tax as well as “a very aggressive PILOT.”
The hotel qualified for the IDA perks by taking advantage of a tourism loophole that was “ludicrous,” according to Berardi: “I challenge anyone to try to define the Hampton Inn as a tourism destination.”
Berardi said the Hampton Inn IDA application was hotly debated by the IDA board members, with Gallagher casting the deciding vote in favor. “We said allowing the tourism destination exemption would be almost criminal,” he recalled. But at that point, the hotel building owners “were willing to sue us. March looked at the big picture.”
In the case of the Hampton Inn, the cost was high, given the number of lowly paid menial jobs, he said.
“That thinking is gone now,” Berardi said. “We have a very forward-looking group of individuals now who are paying close attention.” Berardi said The Solar Energy Consortium (TSEC) was “just amazing and dynamic” as an economic development project. To assist TSEC in bringing in new companies, he said the IDA was prepared to move more quickly than in the past.
At its most recent board meeting, the IDA demonstrated its willingness to do this by voting to allow current UCDC president Lance Matteson to obtain the remaining funds from a $10,000 grant the IDA had awarded to TSEC “sooner rather than later.” It also awarded $10,000 to the Kingston-Ulster Empire Zone. Steve Finkle, director of economic development for Kingston, who oversees the zone, needed the money “to button up some loose ends,” Berardi said. In return for granting the funds, the IDA board expressed to Finkle the need to move more quickly on the planned consolation of his office and UCDC for oversight of the empire zone, Berardi said.
Berardi knows first-hand the value of streamlining government. As chair of the county”™s department of public works while serving as a legislator, he was responsible for the consolidation of three departments into one. “People get into bureaucratic inertia,” Berardi said. “When you start to move things around, they realize it”™s not a threat, but makes it work better.”
