CAIRO — The Cairo Development Foundation, a local nonprofit with the goal of revitalizing the area, filed a lawsuit against the Town of Cairo for funds it was awarded in 2019 but were later rescinded, the foundation alleges.
Papers were filed in New York state Supreme Court in Greene County.
According to the notice of claim sent to the town from the CDF, the town awarded the CDF a $50,000 Community Development Block Grant it had in its possession since 1998. The CDF is known for the Cairo Bears project, a summer public art installation that ends in the fall with an auction of the bears as a fundraiser.
The CDF had applied for the grant and its application had been forwarded to Kaaterskill Associates, which was handling the application, according to the notice dated Sept. 29.
The grant had been awarded to the CDF by a town board resolution Aug. 12, 2019.
In early August 2021, Delaware Engineering assumed responsibilities from Kaaterskill Associates for the town, and the board then passed a resolution Aug. 30, 2021, rescinding the funds, according to the notice.
“The town’s act was arbitrary, capricious, an abuse of discretion and had no basis in fact,” according to the notice.
Cairo town attorney Tal Rappleyea said he could not comment on ongoing litigation.
Town Supervisor John Coyne did not immediately respond to requests for comment.
The town board voted to rescind the funds on the grounds that it hadn’t received an application from the CDF.
According to email correspondence between CDF co-president Diana Benoit, Mary Holton of Delaware Engineering and Brandan Bachor of Kaaterskill Associates dated Aug. 6, 2021, Kaaterskill forwarded CDF’s grant application to Delaware Engineering, saying it was “completed by the CDF prior to Kaaterskill getting involved with developing/clarifying the grant/loan application and guidance documents.”
Holton acknowledged Delaware’s receipt of the application in an email reply.
The funds were planned for rehabilitation of two apartments the CDF owned at 467 Main St., and, expecting to receive the funds, the foundation “obtained loans and expended well over $50,000 in residential renovations in anticipation and reliance of receiving the promised funding to offset and assist with their expenses” in two years between the granting of the funds and the vote to rescind them, according to the notice.
The foundation also claims it followed grant guidelines when interviewing prospective tenants by seeking applicants who earned less than 80% of the mean income in the county, Benoit said.
“We want the town to do the right thing and grant us the money. They’re not going to give it to us in cash; it’s to pay bills and stuff that we did to the building and to the apartment to make it ready — Housing and Urban Development ready. So we want to the town to honor their commitment to us,” Benoit said.
Benoit said the foundation intends to pursue the lawsuit if the town does not respond to the claim.
“They’re not going to leave us with any choice because we made decisions and gotten loans and stuff under the false premise that the town — it’s not even their money — that the grant would be given to us once these were completed,” Benoit said.