N.Y. County IDA Weighs Becoming Construction Manager for Project

The Dutchess County, N.Y., Industrial Development Agency Friday will consider taking on the role of construction manager for an infrastructure project to support a hotel and convention center.

At its meeting Friday, the IDA will consider a plan under which it would sell about $7 million of bonds to finance the construction of roads, sewer lines, and parking lot improvements to serve the new $88 million development, which would be privately financed and built by Long Dock Beacon Associates LLC on a peninsula in Beacon, N.Y., that juts into the Hudson River.

"We have never been a construction manager before, so it's a big role for us," IDA chairman Michael Tomkovitch said. Beacon couldn't issue bonds for the project because it benefits a single private entity, he said.

The IDA would sell the bonds, which would be backed by payments in lieu of taxes from the hotel and convention center. The PILOT payments, which would come from both foregone city and school district property taxes, would be about $500,000 annually, Tomkovitch said.

The bonds would function like a tax increment financing deal since they assume the project's increased property tax value would be sufficient to repay the debt service. Tomkovitch said the deal was likely to pass.

The nonprofit Scenic Hudson Land Trust owns the 25-acre site on which the hotel and convention center would be built and plans to lease a portion of it to Long Dock Beacon Associates for 99 years. The trust plans to make other improvements to the site such as building a 16-acre waterfront park.

The IDA will hire the developer as contractor on the project according to Tomkovitch.

"They're going to be our contractor. However, we're going to have ultimate responsibility for that part of the project," he said. The IDA would hire an owner's representative to oversee the construction of the infrastructure on its behalf.

Matthew Rudikoff, a partner at Long Dock Beacon Associates, said he expects construction to begin in the first quarter of 2009 and be completed in 2010.

The project site sits across from a Metro North station which the state Metropolitan Transportation Authority wants to turn into an 18-acre transit oriented development with a mix of residential and commercial space. The MTA plans to put out a request for proposals to develop the site by the end of the year. Beacon is about 70 miles north of New York City.

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