Birchez Associates Statement

Following a lengthy interview with the Freeman reporter covering complexities of the Birchwood Village P.I.L.O.T. (payment in lieu of taxes) agreement and difficulties with the assessment, I was asked my opinion about the motivation for recent IDA decisions. My response was not meant to be taken literally and certainly not meant to insult the board, or any individual. Birchez apologizes for any offense taken by the Ulster County Industrial Development Agency (IDA) and its Chairman. We wish to reset the public discussion concerning the P.I.L.O.T. agreement for its Birchwood Village affordable workforce/veteran/handicapped housing development in Kingston. A Freeman editorial on Sunday, December 18, referred to our working with elected officials as central to our style of real estate development. We do in fact work with government and elected officials in applying to the State of New York Division of Housing and Community Renewal (HCR), which is responsible for directing both federal and state funds to assist in the creation of affordable housing. HCR rightly wants to know that a proposed project has local support. Birchez accomplishments would be impossible without sound relationships with local elected officials as well as public employees and many who serve on volunteer boards. Yes over time, these relationships may deepen into friendships. The editorial observes that over the years, real estate developer Steve Aaron has found a way to stitch himself and his enterprises into the fabric of the community. We are proud of this fact. Birchez has developed five communities in Ulster County that provide seniors, working families,

veterans and the disabled with high-quality, affordable housing. Birchez has supported the municipalities in which it has communities through active participation and contributions to local causes. Birchez believes the reported amount of payments due in lieu of taxes is based on an unlawful assessment by a former City of Kingston assessor who refused to follow the current New York State Real Property Tax Law (RPTL) in reference to affordable housing projects. As a result, we have legally challenged the P.I.L.O.T. bills from 2009 on. Further, we asked the IDA attorney and the President of the IDA to append the P.I.L.O.T. to clarify that the 581(a) section of the RPTL, which became effective October 11, 2005, be applied to reach the assessed value. We have made attempts to pay the amount we owe under the law. When the payments were not accepted by the City tax collector, we then deposited funds each year into an escrow account. Birchez is in discussions with City of Kingston officials and is hopefully well along in the process of bringing about a resolution.

Steven L. Aaron Founder & Managing Member Birchez Associates LLC