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Dan Hust | Democrat

Sullivan West Superintendent Kenneth Hilton, standing at right, talks at the district’s facilities forum last Thursday.

SW bidder clarifies intentions

By Dan Hust
LAKE HUNTINGTON — November 23, 2010 — One thing Ilwon Kang promised he’ll not be bringing to Narrowsburg is Section 8 housing.
“Zero percent chance,” he told the Democrat yesterday.
While the New York City developer has experience in affordable housing from early in his career, Kang said his efforts these days focus on more upscale projects.
What exactly he has in mind for the unused Narrowsburg and Delaware Valley campuses of Sullivan West remains uncertain – apparently even to Kang.
But at a facilities forum on Thursday at the high school in Lake Huntington, former SW business administrator Larry Lawrence said Kang’s face has lit up the three times Lawrence has escorted him on a visit of the 1928 Narrowsburg school.
“He’s like a newlywed,” Lawrence related to the small crowd. “He’s in love with that building.”
But like any courtship, there are rules to be followed. For one, even though he’s the sole bidder, Kang has yet to be chosen by the district’s board as the winner of the bids.
(Kang bid $700,000 – the appraised value – for the Narrowsburg school and $2.3 million for DV near Callicoon. DV’s appraised value is $2.7 million, but that included 63 adjacent acres that are not up for sale.)
The board is expected to make a decision at its next regular meeting on Thursday, December 2 at 7 p.m. in the high school’s library.
Though it cannot reject Kang’s bids based on his plans (or lack thereof) for the two campuses, the board could disqualify them based on what board member Noel van Swol called a “glitch.”
Kang did not send the required five percent deposit – totalling $150,000 – with his bids. SW Supt. Ken Hilton blamed that on a misunderstanding of the district’s bid specifications, which could be read as requiring the refundable deposit after the board and Kang agreed to the sale.
Kang has since provided the district with the $150,000 deposit.
No one was faulted, but Hilton said the school’s attorney acknowledged that the board could disqualify the bids on those grounds.
The attorney, however, added that the board is legally safe to proceed, though van Swol worried that simply accepting Kang’s deposit days after the bids were opened could lead to an equal-rights lawsuit from any potential bidder who had not put in a bid because he/she could not provide the deposit upfront.
Hilton said he plans to formally recommend the board accept Kang’s bids.
But van Swol aired concerns about Kang’s resumé, calling the background information provided to the district thus far as “vague.”
“I didn’t see any list of references,” he pointed out, arguing that the board must be able to check out Kang’s financial credentials and creditworthiness before moving forward. “We have to be careful and take our time with this.”
Other board members agreed that financial statements should be supplied and reviewed, and Hilton said yesterday that those documents are en route to the district.
Van Swol also demanded a face-to-face meeting with Kang.
“I know I’m being hard-nosed, but that’s what I’m being paid for,” the volunteer board member quipped.
Hilton yesterday confirmed that Kang himself made that overture on Friday, and a private meeting with the board and possibly the two involved town supervisors (Tusten’s Peggy Harrison and Fremont’s Jim Greier) is being set up sometime after the December 2 board meeting.
Should the school board accept Kang’s bids, he will have approximately five months to do due diligence, researching the sites and their potential at his own expense.
Kang promised that he would actively involve the district community in his plans, saying he isn’t planning to “come in there with some grand scheme” to steamroll residents and officials.
His goal, Kang added, is to cooperate with the community to create something that will benefit the area.
“We like both properties,” he confirmed yesterday. “We think we have good ideas for both properties.”
But concerns remain, with Narrowsburg resident Tom Prendergast wondering at Thursday’s forum if Kang might turn out to be another Louis Cappelli, one in a long line of developers with ultimately unrealized dreams.
“Let’s hope not,” replied Hilton.
But even after the sales agreement is signed, Kang can opt not to proceed. Indeed, Tusten Supervisor Peggy Harrison told the same audience on Thursday that she accompanied Kang on one of his tours of the Narrowsburg school, and she felt the lack of “commercial viability” might push him away once he completes his due diligence.
The district, however, is looking to unload the buildings, which cost $178,000 every year in maintenance alone and have a list of recommended capital repairs topping $839,000.
While van Swol argued that shuttering them completely for a few years until the real estate market improves might be prudent, Hilton worried that the inevitable deterioration would end up costing SW more than selling in a soft market now.
The $3 million from a sale to Kang would have to be used to pay down debt, said Hilton. SW has two outstanding bonds totalling approximately $36 million and requiring an annual payment of $700,000.
The sale proceeds would drop that annual payment to $485,700. Coupled with the elimination of maintenance and utility expenses, the district would save $392,000 a year, said Hilton.
And it seems clear that, short of a major demographics upheaval, SW will not be needing either Narrowsburg or DV in the foreseeable future.
At Thursday’s forum, Hilton pointed out that the district’s enrollment continues to fall, with projections indicating a 17 percent loss in the high school’s population in the next five years.
However, live births in the district indicate a leveling-off of the decline, he added, with the elementary student population declining by just .3 percent in the next five years.
The total student population for SW will likely bottom out around 1,150, he explained, blaming more the aging demographics in the area than any exodus from a district that once featured around 1,400 students.
“We’re coming to the end of the decline in our enrollment – I’m certain of it,” Hilton predicted.

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