Orange County IDA grants Royal Wine Corp. $32 million in tax reductions for winery project

The Orange County IDA approved Royal Wine Corp.’s request for $32 million in tax breaks for its in-development wine manufacturing plant off Route 17M in Goshen during their August 17 board of directors meeting. That includes a $28 million property tax reduction.

Bill Fioravanti, CEO of Orange County IDA, affirmed that Royal Wine applied for a sales tax exemption, a mortgage recording tax exemption, and most significantly, a property tax abatement, dubbed PILOT, a payment in lieu of taxes. In particular, this PILOT is an eligible benefit of the IDA’s Uniform Tax Exemption Policy, known as UTEP.

“UTEP is a document that outlines what a particular IDA is incentivizing, what types of businesses or industry sectors you’re trying to attract. It spells out what incentives certain types of projects would be eligible for,” Fioravanti said, adding that the previous board amended its UTEP to favor manufacturing plants, especially those of food and beverages. “Some sectors are coming, some are going, but food is not going away...Our UTEP spells out that they get a 15-year PILOT.”

James Skoufis, senator from New York Senate District 39, opposes the decision. In a letter sent to the IDA on August 16, Skoufis claimed that these tax breaks were “astronomical figures” and unnecessary for a company like Royal Wine to prosper in the county.

“While I appreciate the current IDA board’s efforts to restructure its agency over the past year, moving forward with Royal Wine Corporation’s application would be a severe breach of the IDA’s responsibility to taxpayers,” Skoufis wrote. He also warned that this decision could have a ripple effect and lead to other local distribution projects requesting similar benefits.

Skoufis released a video statement on August 18 criticizing the IDA’s action, emphasizing that no members at the board of directors’ meeting questioned or brought up these tax breaks.

“Either they are the worst negotiators on the face of the planet or, worse, they simply do not care that taxpayers are getting ripped off left and right,” Skoufis said, adding that he and his office will investigate the board’s actions in the coming days.

While the board has received a mixed response to the project, Fioravanti asserts that the winery plant will yield substantial economic benefits for the county, bringing in revenue from wine sales, tourism from the plant’s tasting center, and 120 full-time jobs. Additionally, the plant will require 700 construction jobs for its development, and according to an IDA policy, 85% of those workers must be hired locally. Construction for the project will begin in a few months and likely finish in summer 2024.

“Using a reputable cost-benefit analysis tool developed specifically for IDAs, we estimated the Royal Wine project’s total economic impact locally at more than $210,000,000,” Fioravanti said.

Fioravanti also clarified that, while Royal Wine is receiving short-term tax reductions, the company will still be paying taxes throughout and after its 15-year PILOT. These will include over $26.5 million in property taxes, over $1.6 million in special district taxes, and over $4 million in property taxes each year post-PILOT.

“I have heard some comments suggesting that IDA tax incentives will require Goshen residents to ‘shoulder the load’ for Royal Wine, suggesting that somehow residents will collectively pay additional taxes for the company. That is a complete fabrication,” Fioravanti said.