Mill St. Partners Prepping to Sue Newburgh

NEWBURGH – Mill Street Partners, LLC, the company that wants to build a project that would include affordable housing and retail space on Lower Broadway in the City of Newburgh, filed a notice of claim against the city and city manager. The partnership is considering seeking $31 million in damages from the city for what the notice of claim said is the city’s failure to honor a commitment in a development agreement that it would assist Mill Street in redeveloping the property.

The notice maintains the city breached its contractual obligations to Mill Street by refusing to support a request to remove a deed restriction on the property prohibiting private redevelopment, preventing Mill Street from timely applying for public funding, and engaging in a course of conduct meant to stop Mill Street from completing the project.

The notice also claims the city manager appointed a series of “known project opponents” to local boards and that the city has violated the Federal Fair Housing Act by denying high quality affordable housing for the minority population in the city’s downtown area.

Under the development agreement, the city and Mill Street must attempt to mediate any disputes prior to commencing legal action. So far, the city has not formally agreed to hire a private mediator to move any mediation forward, the company said, while it has agreed to hire a mediator over a month ago.

“The city is now capitulating to a small faction in the city, that does not live downtown, and is trying to stop larger high-quality housing projects in this neighborhood,” said Patrick Normoyle, a principal in Mill Street Partners. “This is not a good message to send to the Hudson Valley development community, as it will undoubtedly deter many people who may have been willing to invest in the city’s efforts to rejuvenate its downtown corridor.”

There has been no response to the notice of claim from the city.