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Few hoteliers are eager to be the first to test an unproven market. But Sims and Kirsten Harlow Foster consider it a calling card. Their Western Catskills-based company Foster Supply Hospitality has built a quaint empire, opening rustic inns in, as they put it, “unexpected places.” The couple’s newest undertaking will be in their most unexpected location yet: downtown Newburgh, N.Y.

Since 2019, the Fosters have been wading carefully through the financing, permitting, and rubble that came with their acquisition of three distinctive early 1900s buildings on Newburgh’s Grand Street, a block from the riverfront.

Their plan is to convert a former American Legion post and a defunct YMCA complex into an expansive 74-room boutique hotel with a retail component. The four-story Masonic Temple next door will house multiple restaurants plus conference and events space. In what was until recently a hidden corridor lined with lockers for Freemasons’ ceremonial accouterment, Mr. Foster envisions a martini bar looking out over the Hudson. The $45.9 million project broke ground in December and is expected to open as soon as late 2027.

Foster Supply Hospitality is only drawn to projects that “make a positive difference” in the community, said Ms. Foster, who previously worked in microlending programs in developing countries. The company’s James Beard-recognized restaurants and design-forward fly-fishing lodges have seeded new tourism economies for rural communities, including Livingston Manor, the Sullivan County hamlet that five generations of Mr. Foster’s family have called home. The economic boom has become known, as The Times-Union first put it, as the “Foster Supply effect.”