The Burton Towers building at 36 Cerone Place.
By Nancy Peckenham
The Newburgh city council and the city’s Housing Authority are locked in a competition over the future of the Burton Towers complex, a federally subsidized apartment house serving senior and disabled residents.
The property went into foreclosure in June and was scheduled to go to auction on August 22 if neither the city or the housing authority stepped in to make an offer. In late July the city asked several developers to submit proposals to purchase and renovate the building that has fallen into disrepair. On August 11, the city council voted unanimously to accept the proposal from Mountco, which oversaw the renovation of the Cornerstone Residence on Broadway, among other projects in the county.
An attorney for the housing authority says that even before the city asked for proposals, the housing authority board had voted to go ahead with its plans to submit a contract to HUD for the building. Attorney Alan Lipman said that the authority had been working with Wilder Balter developers, who have projects throughout the area, and that they signed a joint venture agreement on August 11, the same day the city signed its agreement with Mountco.
Mayor Nicholas Valentine said that Wilder Balter submitted a proposal to the city that never mentioned that it had been working on an agreement with the housing authority. “They lost the bid and they turned around and partnered with the housing authority,” Valentine told Newburgh Circle.
If both the city and the housing authority have competing offers submitted to HUD, the federal agency will not accept either one and put the property on auction, which is now re-scheduled for next week.
Both parties do agree that if Burton Towers goes to a foreclosure auction that HUD will require the new owner to pay back more than two million dollars due on the mortgage. A new owner working with the city or the housing authority would not have to pay that back.
Mayor Valentine says that the city council took action to protect the residents of Burton Towers who are living in substandard conditions and doesn’t want to lose out on the waiver on repaying the mortgage. He will appear at a rally at the towers on Thursday in support of Mountco developers.
Attorney Lipman is pessimistic that either side will stand down and predicts that Burton Towers will be sold to the highest bidder at next week’s auction. “It will happen a week from Friday, unless Moses strikes a rock,” he said.
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