Some residents and community leaders are upset over a large tax break developers are seeking to build a hotel and restaurant near the waterfront in Newburgh.

The applicants, Foster Supply and Hospitality (FSH), request nearly $4.5 million in sales and property tax relief over 12 years.

At a public hearing on the request held by the Newburgh Industrial Development Agency (IDA) Thursday, city and state officials urged the IDA board to reject the FSH’s application.

The IDA board will make the final decision on the request for a payment in lieu of taxes (PILOT).

Supporters at the hearing said the project would spur development near the Hudson River.

But neighbor Dwayne Cotton said the tax break request "doesn’t make any sense.”

Cotton, a dishwasher at a Newburgh restaurant, lives near the Masonic Temple and former YMCA building that FSH intends to renovate into a hotel and restaurant. He is concerned the $24 million project might spur development that displaces him and others.

“Morally, it’s terrible because we have people who need to live,” he said.

In a phone interview Tuesday, FSH founder Sims Foster said despite being an experienced hotelier, the PILOT application process is new territory for him. His six hotels in Sullivan County did not require tax breaks, but the Newburgh project brings with it different challenges, he said.

“The taxable rate in the city of Newburgh for a project of this size — it’s a completely different equation,” Foster said. “So we’re asking for help when we’ve never asked for it in that form. We hope that shines … positively on our track record and why we’re asking for it at this juncture.”

In comments before the IDA, lawmakers who oppose the PILOT request stressed they are in favor of the project.

From Kingston to Marlboro and now to Newburgh, PILOT requests illicit similar feelings among some public officials: They love the projects, but hate the tax breaks.

Some state and city officials, including State Sen. James Skoufis, suggested a shorter-term PILOT to make up for some renovation costs.

They were annoyed, not just with the tax break request, but with the Newburgh IDA, for not heavily advertising the event.

The board will hold more hearings on the PILOT request. Foster said that if the PILOT is awarded, the project could be completed by summer 2023.