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Birches Denies Corruption in Schoharie Apartments

Written By Editor on 2/17/17 | 2/17/17

Embattled Developer Defends Record

From 2/10 Edition

By Ethan Tanenbaum

It’s been almost four years since Governor Cuomo allocated millions for affordable housing in the Village of Schoharie, yet the project is still ongoing. Birches at Schoharie has been plagued by delays, legal disputes with contractors, and rumors of pay for play involving the developer, Steve Aaron.

Mr. Aaron is the owner of Birchez Associates, LLC, which received the state contract.  Companies tied to Mr. Aaron have given well over $250,000 dollars in campaign donations to Cuomo, an astronomical amount that surpasses disgraced Buffalo developer Louis P. Ciminelli. Mr. Ciminelli is currently facing federal bribery charges.

Questions arose after Darryl Towns, head of the NY Homes and Community Renewal Agency, chose Birchez to lead the project despite scoring lower than competing companies. While this practice is legal, awarding state funds based on campaign contributions is not. While Mr. Aaron isn’t currently under investigation for any wrongdoing, questions remain regarding both his ties to Cuomo and business practices.

When contacted by the Mountain Eagle Wednesday, Aaron said that contributions to Cuomo have nothing to do with receiving the Schoharie project. "Absolutely, positively no,” he said. “It's on the street because there are people that don't like the Governor." He added that his family has two generations of ties with the Cuomo family and that the current governor has done more for affordable housing than any previous. Aaron added that he is a member of the New York State Association for Affordable Housing.

Aaron and his associated companies have been sued or accused multiple times for failing to pay contractors, gender discrimination, and failure to pay property taxes. Particularly disturbing are lawsuits from 1995 and 2012 previously reported in the Times Union. Former employees alleged that Mr. Aaron intimidated them and practiced gender discrimination, with threats including flipped tables, thrown bottles, and threatening one woman with “punching her teeth down her throat and throwing her down a flight of stairs.” Mr. Aaron settled one lawsuit, while a jury awarded $1.4 million to the plaintiffs in the other.

Regarding one lawsuit, Aaron said that he did not intimidate a former subcontractor, saying that the individual was "shooting his mouth off to the press. " Aaron said that the subcontractor is now barred from doing business in the state of New York. Apart from that, the only other case Aaron said he was ever accused of similar behavior was 35 years ago when he called an employee ”the C word.”

Two contractors sued Birchez Associates for failure to pay for work done on Birches of Schoharie, which continues a troubling trend for the Kingston based developer. Mr. Aaron has been sued for hundreds of thousands of dollars over the course of his career, which he chalks up to his “high standards,” adding, "My reputation in the housing business is that we don't deliver inferior products."

Aaron told us that any conflicts were over inferior work. While at first stating there were no issues with contractors, the conversation evolved. He said, "We have a paving contractor we had to literally escort off the job because of poor quality and some obnoxious behavior." He said another contractor physically assaulted an employee and is demanding $250,000. Toward the end of the interview, Aaron said that a total six former contractors on the Schoharie project caused problems.

The Birchez owner stated that part of the issue with his reputation was caused by conflicts by other companies. He singled out Carver Sand and Gravel in Schoharie. Aaron said that the apartment project  was "[Carver Laraway’s] job to lose. His numbers were ridiculous. He continues to be an antagonist towards us."

In 2012 multiple municipalities in Ulster County sued Mr. Aaron for over $400,000 in unpaid property taxes, followed by a $1 million lawsuit filed by Kingston, NY. Aaron said that the situation was resolved. "It's been settled for years. I've been the subject of a number of hit pieces." Aaron stated that Kingston's Mayor and Assessor was biased against him and that he won in court. He also said that when a person "reaches the top," they receive more scrutiny.

Despite his troubling past, Mr. Aaron has been praised by federal, state and local officials alike. Former Congressmen Chris Gibson and Maurice Hinchey, along with State Senator John Bonacic all praised Mr. Aaron’s work with seniors in promotional videos posted to his website. Village of Schoharie Mayor John Borst was unavailable for comment.

Birches of Schoharie is currently accepting applications, however, there is no one living on the premises as of yet. Local and state officials are hopeful that the Birches project will bring jobs and tax dollars to the Village of Schoharie and Schoharie County as a whole. If Mr. Aaron’s history tells us anything though, it may end up being more complicated than that.

The Mountain Eagle reached out to multiple parties involved with Mr. Aaron but has yet to receive a reply or comment. We will continue to monitor the story as it develops.


Tyler James and Matthew Avitabile contributed research to this article

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