The global economy takes Ulster County real-estate for a spin
A player new to the Ulster County real-estate market recently bought the 117,000-square-foot former John A. Coleman High School building on 17 acres off Hurley Avenue in the Town of Ulster for a reported $2.7 million. “With its thriving arts scene, bucolic setting, and Revolutionary-era architecture,” the Konnectia Holding website explains, “the county seat of Ulster is increasingly a magnet for expat New Yorkers.”
Proposed for the site are 120 hotel units, 60 residences, 55 office units, a sports complex, and retail.
Could Konnectia be ”the monster that everyone is afraid of,” the kind of entity that landlord rent guidelines board representative Junior Tampone warned Kingston was going to get if it chased out its entry-level lower- or middle-class rental propertyowners?
Ulster town supervisor Jim Quigley, out of the country at this writing, was quoted by Kingston Wire columnist Hugh Reynolds as having shared his concerns with the developer “about the potential impact of a development that would approach $100 million and turn Hurley Avenue into a parking lot at rush hour.” We’re not sure that quotation accurately portrays the full amplitude of Quigley’s reaction to a $100-million addition to his town’s tax base.
The conversion of the John A. Coleman High School building, beached like a stranded ocean liner behind an expansive lawn between Hurley Avenue and the Thruway not far from uptown Kingston, is in its very early development phase. No applications have yet been submitted.
As Reynolds notes, the time between press release to shovels in the ground can be long indeed. He cites as a cautionary tale the experience of The Kingstonian at the edge of the Stockade historic district. A request for a project quote from city government came in August 2016, final approval October 2022, “cannot proceed at this time” letter from the developers in December 2022.
The Coleman site is not in the county’s only city but close to its borders, about midway along the 6,2-mile road to Old Hurley along which Kingstonians fled when the British burned their town on October 16, 1777.
SVN Deegan-Collins Commercial Realty represented the seller, The Archdiocese of New York.
Stability and security
Based in Miami, Konnectia is involved in a number of other American projects from Florida north to Michigan and New York State. Its website market pitch provides a clearer picture of its geographic orientation as far as investment is concerned.
“Investment opportunities in the United States continue to be present. The real-estate market has managed to successfully overcome the financial storms that overwhelmed the world economy, and the real-estate market is presented as a fertile land to multiply investments,” the Konnectia website explains. “In recent months, a much higher increase in demand for real estate over supply can be observed. The United States continues to be one of the best markets to invest in real estate, especially for Latin America, since most countries have experienced a gradual devaluation of their currency in recent years. Winds of great economic and institutional uncertainty are blowing in much of Latin America, creating the need to study the field of finance and the successful experiences in terms of investment and development of US companies. The United States is presented as an excellent option for those seeking to maximize and solidify their assets in the medium and long term. This country is still the best option in terms of stability and security for doing business.”
Still the best option for investment. Stability and security.
Konnectia offers its investors the opportunity for separate deeds for their unit or units. This condo-hotel business model allows investors ownership, and thus obtain an income in dollars. Each unit has an owner, but Konnectia-related management offers services and operates it as a hotel. The owner of the unit will typically pay commercial tax rates on the income generated from rent. And the owner also becomes responsible in case tenants become scarce.
Escaping hyperinflation
A large part of Konnectia’s leadership is Argentinian. With a current year-to-year inflation rate of 114 percent, Argentina is hardly “an excellent option for those seeking to maximize and solidify their assets in the medium and long term.” The winds of economic and institutional uncertainty are blowing at hurricane strength in Argentina. While most potential clients of adventure-oriented hotel destinations are trying to figure out how they can vacation at the lowest cost, Argentinians, moored in a hyperinflationary domestic financial environment, are looking to invest as much of their ready cash as they can in dollar-denominated alternatives outside their country. The current rate of inflation in most other Latin-American nations (except the special case of Venezuela) is not much different from what it is in Europe.
“Elsewhere” includes the Hudson Valley, where the Konnectia website discusses three locations: Hudson City, where 90 townhouses, 40 apartments and six single-family homes are planned; Red Hook, where 120 hotel units, offices, a restaurant and retail are under discussion; and of course the newly announced Hurley Avenue project.
Bringing experience to life
Adventure hotels too frequently communicate a contrived quality which leaves visitors disappointed. Who but a flamboyant artist can be trusted to find those magic locations where guests can expect to expand their outlook? Kingston doesn’t have a Disneyland or a Legoland, a packaged resort where visitors can watch their dreams come true. It requires better guidance and more audience participation.
Ruben Santurian, who plays a large role in the selection process of projects for Konnectia, is a well-known South American sculptor as well as a principal of the firm. He visited the Coleman School site and environs.
Artists bring objects or events to life. Santurian’s presence enables the company to boast, “We first create the brand and the business model, and we then proceed to bring them to life, always making sure we are offering the best investment project to our clients, and a product that fulfills the expectations of our guests, tenants, and users, who will enjoy the final development, so that we are able to give them an unforgettable experience.”
There’s a new dimension to foreign investment like the kind Konnectia encourages. The United States recently adopted a policy awarding visa rights and a green card to foreign nationals and their families who invest $100,000 (and sometimes less) in the American economy. Regulations for qualification for the EB-5 and other visa classes are complex, and it is unclear if or under what circumstances investors in Konnectia projects might be eligible.
