The Marketplace at Newburgh will have to wait to learn if the Orange County Industrial Development Agency will endorse its bid for tax breaks owners of its neighbor and key competitor Newburgh Mall feels would be devastating.

The IDA board listened to but failed to reach a decision, this past Wednesday, on developer Robert Wilder’s plea for a 15-year payment in lieu of taxes (PILOT) agreement that Wilder said it needs to get its long-awaited and hotly contested project off the drawing boards. Wilder said the $9.9 million in property tax breaks would help his project “get off the ground.”

In the planning stages for 12 years, the Marketplace at Newburgh was initially announced as a $150 million, 850,000-square-foot project. In April 2010, the project was reconfigured to 775,000 square feet with 600,000 square feet occupied by “big box” retailers. The plan discussed last week before the Orange County IDA was for Phase 1, a 400,000-square-foot shopping center that is proposed to include ShopRite and BJ’s Wholesale Club. Phase 2 would bring the total to 784,000 square feet.

In 2008, Marketplace developers had agreements with Costco and Best Buy to anchor the huge development. But then the national economy tanked and suits filed by opponents of the Marketplace prompted the potential anchors to pull out. At the time there was talk that Costco and Best Buy were seeking better deals, but their commitment was strong enough at one time that Wilder Balter altered plans for the Marketplace to concede ownership of the properties to the giant retailers. When the two pulled out, those plans had to be jettisoned.

On several occasions the Marketplace at Newburgh project sputtered, but never died. It survived suits by Save Open Space and Newburgh Capital Group, which leases competitor Newburgh Mall just across Route 300. Wilder Balter Partners has fought off every challenge to date, but Save Open Space and Newburgh Capital continue to argue that the Marketplace plan would be bad for business – especially Newburgh Mall’s business.

At that time, Wilder, chairman of Wilder Balter Partners, vowed that “the Marketplace will function as a true neighborhood destination for the community to eat, shop and socialize.” It was a promise that proved difficult to deliver.

Then in 2010, Wilder Balter received a one-year extension to its plans. The approval coming at the end of a Town of Newburgh Planning Board meeting and was granted without discussion. That one-year extension is scheduled to expire in just two months, barring a further extension.

Phase 1 is estimated to cost $98.2 million with Wilder Balter reportedly having $31 million committed from an undisclosed bank. Obtaining the $9.9 million PILOT agreement from the IDA would go a long way to convincing other investors that the Marketplace plan is solid.

At last week’s IDA meeting, attorney Eric Gordon argued that the IDA shouldn’t support retail proposals such as these and insisted that the applicant hasn’t followed proper procedures. In a letter sent to the IDA board, Gordon said that giving the Marketplace a tax break will place Newburgh Mall at an even greater disadvantage.

“There’s no doubt the Marketplace will seek to take tenants away from the Newburgh Mall and other local establishments,” he wrote in the letter.

Gordon said he may file another lawsuit over the latest site plan, now before the Town Planning Board. He said he’s waiting to learn what changes the developer is seeking.

By ALLAN GAUL
agaul@tcnewspapers.com