Skoufis blasts $32m tax break for Royal Wine site in Goshen
GOSHEN — Workers had been blasting and prepping a construction site off Route 17M for weeks when an Orange County council last week approved $32 million in tax cuts for the giant winery and warehouse that Royal Wine Corp. is about to build there.
The scale and timing of the benefits – after the project began – outraged Senator James Skoufis, a Cornwall Democrat and frequent criticism of the tax breaks companies receive as incentives build or expand. He released a statement on Thursday denouncing the Orange County Industrial Development Agency for what he says amounts to a taxpayer subsidy of $582,000 for each of the 55 new jobs Royal Wine plans to create on its new Goshen website.
He called it “perhaps the most egregious tax relief ever given in Orange County.”
“It’s the height of irresponsibility,” Skoufis wrote, “and a reflection of one of two sets of facts: either they are the worst negotiators on the surface of the planet, or, worse, they don’t just don’t care about taxpayers getting ripped off left and right.”
The award and criticism have fueled a recurring dispute over the use of tax breaks to spur economic development. Proponents see them as a much-needed way to attract jobs and other economic activity that would otherwise go elsewhere, especially those where taxes and labor costs are lower. Critics leap when the beneficiaries are big companies or the relief is significant, arguing that the tax cuts were unnecessary rewards for companies that would have come anyway.
Orange County IDA CEO Bill Fioravanti responded Friday that Skoufis’ dollar-per-job slam was short-sighted and overlooked other county benefits: several hundred construction jobs, mostly for local workers; a new employer for the region’s food and beverage industry; and the addition of an eighth generation family business with a loyal workforce.
“Above all, we make sure that this project arrivedand it’s happening here in Orange County,” he said via email.
Fioravanti argued that Royal Wine could have canceled his project if the IDA had denied him the tax benefits because construction on his building had not started. That would mean GFI Partners, the Boston company managing the development, “could then put the property back on the market for another (potentially less attractive) user,” he wrote.
In an interview on Friday, Mordy Herzog, CEO of Royal Wine, promised that his company – maker of Kedem wine and grape juice and global distributor of kosher wines and spirits – would be a “great addition to Orange County” and there. would probably stick around for decades. to come, just as it has operated in Ulster County for 40 years. The company has outgrown its Kedem manufacturing facility in Marlboro and plans to merge it with its Bayonne, NJ, operation in a 627,000 square foot winery and warehouse in Goshen.
“We’re really excited about this project,” he said. “This is the biggest project the family has done, by far.”
Royal Wine’s tax breaks were determined by rules and formulas in IDA’s Uniform Tax Exemption Policy. Most significant was a $28 million reduction in the total property taxes he is expected to owe over 15 years to the Goshen School District, the Town of Goshen, the Village of Goshen, and Orange County. With its annual tax bill initially reduced and then gradually increased to the full amount, the company is expected to pay nearly $31 million in property taxes during this period.
The company will also save $3.8 million in expected sales taxes and $517,000 in mortgage taxes thanks to the IDA.
Royal Wine estimates the Goshen factory will employ 100 full-time workers, plus 20 part-time during the busy harvest season from August to October. This workforce would be made up of 65 employees who already work at the company’s Marlboro and Bayonne sites and 55 new positions, including 45 full-time.
IDA’s rules for granting tax relief, last amended in 2019, do not take into account the number of jobs created. Fioravanti, who took over the agency after a scandal that led to an almost complete replacement of its staff and the appointment of a supervisory board, said the overhaul agency will likely review and revise those rules again and could add job numbers as a factor.
Skoufis argued on Friday that the board was free to deviate from its rules, which he said are “essentially guidelines”, and that it should have done so in the case of Royal Wine to make match the breaks to the number of jobs. He called the amounts awarded “highway theft”.
He also scoffed at the idea that Royal Wine might have sought another site outside of Orange if it had been denied tax breaks. He said incentives like these are only needed to spur the redevelopment of long-abandoned properties and former industrial properties known as brownfields.
“This is prime real estate along the highway,” Skoufis said of the Royal Wine site. “He doesn’t need to be induced, at least not to this level.”
Chris McKenna covers government and politics for the Times Herald-Record and USA Today Network. Join it at [email protected].