A soon-to-be-built winery in Goshen rekindled a local discussion on the very agency that had waived almost $32 million in taxes for the new project.
Orange County Industrial Development Agency, or IDA, is a public benefit corporation under New York state law with unique authority to attract new businesses into the county with tax incentives.
IDA in August approved nearly $32 million in property taxes, sales taxes, and mortgage recording taxes for Royal Wine Corporation, which sought to build a kosher wine manufacturer off Route 17M over the next two years.
State senator James Skoufis told The Epoch Times, “This may be the most egregious, worst tax break ever issued by the Orange County IDA, and the reason for that is one of math. It is very simple.”
Skoufis said he arrived at a per-job subsidy of almost $500,000 after dividing the total tax break of $32 million by 55 new jobs at the future winery.
The winery also creates 470 temporary construction jobs, which Skoufis did not include in his math because the tax break was granted over a period of 15 years, way beyond the construction period, he said.
Skoufis added that the location being sought by Royal Wine is a prime piece of real estate, adjacent to major highways and in a ready-to-built condition, which sells itself even without incentives of this magnitude.
Skoufis, whose 39th senate district covers part of Orange County, has engaged in IDA reform within the state legislature for years, having helped pass several IDA bills in the Senate.
Orange County IDA executive director Bill Fioravanti told The Epoch Times that the agency follows a standard cost-and-benefit analysis on each project and will not greenlight any project unless it sees a benefit several times bigger than the cost.
For a company that gets a 15-year IDA tax exemption, it only pays 5 percent of full taxes in year one, gradually increasing to 50 percent in year 10 and then to a full 100 percent in year 16.
“Everybody always looks at the economics during that 15 years when we are providing incentives to an employer, but they disregard the fact that after the 15 years, the company will be paying full market rate taxes for perpetuity,” Fioravanti said.
The IDA board has the discretion to act outside of the policy on a case-by-case basis.
IDA’s board has seven volunteer members, each appointed by the county legislature. All agency operating expenses are covered by fees collected from applicants.
Neuhaus told The Epoch Times that he’d like to reform the process by which Orange County IDA board members are selected.
He also thinks IDA benefits should not be allowed for projects already underway.
Middletown’s Mayor Joe DeStefasno, who signed off on the letter, told The Epoch Times, “I think the best part of the letter is that it opens a dialogue. It is a legitimate discussion, and I support senator Skoufis on it.”
DeStefasno said that he believes Orange County IDA is for economic development in the state and that IDA tax breaks are best used in areas that truly need them.
“Some projects are going to happen no matter what benefits are given to them. I don’t think it’s the best use of IDA tax breaks when a project is going to come here anyway,” he said.
Fioravanti told The Epoch Times that local leaders can voice their opinions in public hearing sessions, but he is not so sure about including them in IDA decisions.
“It is unusual for local municipal leaders to have a final say on IDA benefits—and that is intentional. That is really to ensure there is impartiality on the part of IDA.”
Fioravanti was appointed by the IDA board shortly after three former IDA officials pleaded guilty to corruption charges in September 2021.
