As the first CEO appointed to the Orange County Industrial Development Agency (IDA) following a major corruption scandal, Bill Fioravanti said his top job is to refocus the agency on its core duty and restore public trust.
Over the past year or so, he reorganized the team with new service providers, chipped away at stale or money-losing projects, and launched a new site program to stimulate growth in the years to come.
Since he took the helm, the number of businesses requesting IDA tax incentives has steadily climbed to eight after remaining at zero for more than a year.
IDA is a public benefit corporation empowered by state law to spur economic growth and job creation with tax incentives.
The most common benefits are reduced or exempted sales, property, and mortgage recording taxes.
At the heart of the work is identifying the right industries to incentivize, he told The Epoch Times.
Having grown up in a former industrial city in upstate New York, which crumbled as low-skilled manufacturing went offshore, Fioravanti said his vision is to attract industries of the future.
IDA Upheaval and Reshuffle
Two years ago, Orange County District Attorney David Hoovler opened an investigation into IDA over alleged financial wrongdoings in multiple complaints.The investigation soon became a joint effort with the New York State Comptroller’s Office.
In March 2021, the Orange County Legislature replaced all seven IDA board members.
Three months later, three former top IDA officials pleaded guilty to corruption charges, including hiding self-dealing and concealing conflicts of interest, and were ordered to pay more than $1 million in restitution.
They were former CEO Laurie Villasuso, former Managing Director Vincent Cozzolino, and former board member Edward Diana.
James O’Donnell, the county legislator credited with blowing the lid off the corruption case, told The Epoch Times that it’s the largest white-collar crime the county has ever known.
Immediately following the investigation launch, Fioravanti was assigned to monitor IDA in his then-role as county economic development director; he later became the interim head at IDA.
In October 2022, he was voted by the county Legislature to be the new CEO at IDA.
Since then, Fioravanti has worked with the board to retain a new general counsel, bond counsel, financial services company, and auditing firm.
Meanwhile, the number of tax incentive applications began to pick up.
Accelerator Program
Since he came in, Fioravanti has been scaling down IDA’s Accelerator program, which was at the center of the corruption scandals.A legacy program with a rich history, Accelerator was designed to boost small and start-up companies through financial support, such as subsidized rents.
For a time, priorities were given to localized companies in niche industries, such as fashion design, apparel making, and artisan food.
“I call it a Robin Hood program,” Fioravanti said. “It is basically taking money received from larger businesses in return for incentives to give back to help small businesses.”
The county IDA operates entirely on fees paid by business applicants, with its largest revenue source being payments in lieu of taxes.
However, many Accelerator program partners failed to grow on the scale they had promised and became reliant on the below-market rent subsidized with IDA money, he said.
An Accelerator building in Middletown, New York, was originally intended for start-ups in the field of medical devices but instead was occupied by unrelated tenants, such as a candle maker and a personal care company, Fioravanti noted.
Three-quarters of the Middletown space was empty when he first took over IDA.
So Fioravanti began to get IDA out of the Accelerator deal as subsidized leases expired, except for a few successful cases, such as a former prison site in Warwick, New York.
In 2022, his administration cut more than $2 million in expenses in the IDA budget compared to the previous year, partly through shedding stale Accelerator projects.
Fioravanti said he wasn’t against the Accelerator concept but rather the kind of industries it was used in.
New Initiative
When Fioravanti first entered the arena of economic development—he was hired by Orange County Partnership in 2014—there was a repertoire of sites ready for economic development in the county.Over time, as unoccupied industrial park spaces were filled and suitable lots built up, the county was left with few of what he calls primary and secondary sites—those equipped with water, sewer, utilities, or some form of planning board approvals.
To spur future economic growth, Fioravanti jumpstarted a new IDA program called the Shovel Ready Initiative to identify parcels countywide primed for development with the help of a professional firm.
“We are looking at: Where are water and sewer? Where is natural gas? Where is adequate power?” he said.
Ultimately, all the parcel information will be made public through an interactive map-like database for use by potential developers, economic development organizations, and local governments.
Fioravanti hopes to draw more high-tech businesses to the county with the initiative.
Another new area he’s considering venturing into is housing, which former administrations shunned because they believed that it had nothing to do with economic development.
“We bring in companies and create new jobs, but a lot of people that work here can’t afford to live here,” Fioravanti said. “There is clearly a housing crisis, and IDA can utilize some of its tools to provide some relief.”
He hopes to get more discussions about housing with the board and public members.
In the coming months, the agency will update its Uniform Tax Exemption Policy (UTEP), which lays out directives and rules governing the tax incentives’ approval, including the type of preferred industries and allowed abatement schedules.
The policy was last updated in June 2019.
Controversy
In February, New York state Sen. James Skoufis, a Democrat, opened an investigation into the county IDA over the $3 million tax incentives granted to a longtime Goshen-based food manufacturer.He called it the “worst deal” ever by the agency at a press conference, given that the applicant said the project would happen regardless of the incentives, although at a slower pace.
Skoufis represents New York’s 42nd District, which covers most of Orange County, and chairs the state Senate’s Committee on Investigations and Government Operations.
Last month, the IDA board approved retaining a law firm to represent the agency in the investigation by Skoufis and any potential litigation.
Skoufis has been vocal about what he calls years of bad deals out of the development agency, which he often equates to corporate welfare at the cost of local tax dollars.
He has also proposed multiple IDA reform ideas to the state Legislature, including adding a new state monitor with the power to reject IDA deals deemed without merits.
Fioravanti told The Epoch Times in previous interviews that under his helm, the IDA operates within the boundaries of state law and in accordance with its own policies.
He also said IDA incentives shouldn’t be viewed in isolation but against the backdrop of the unfavorable business environment in New York.
“We are looking for Senator Skoufis and the state government to make New York more competitive for businesses,” Fioravanti said. “If he can bring those conditions about, we’d gladly close up shop and focus our energies elsewhere.”
Fioravanti invites Skoufis to participate in the upcoming UTEP discussion.
