Orange County Partnership - News

Facing Massive COVID-Induced Shortfalls, Municipalities Can Seize Opportunity to Thrive Post Pandemic

By John Jordan


The Alliance for Balanced Growth and the Orange County Partnership staged an informative and well-attended webinar on Sept. 24 that covered the significant economic impacts of the coronavirus pandemic and the unique and perhaps plentiful opportunities that may exist for Orange County municipalities and school districts in the era of COVID-19.


Specifically, members of a panel discussion, which included business and real estate executives, related that a growing number of businesses and developers are considering Orange County for commercial projects in response to the pandemic. They stated that New York City-area businesses are looking to relocate to the suburbs to escape the city’s urban climate and crime.


The panelists at the “Municipal Solutions to Increase Tax Rateables & Recoup Lost Revenue”  included moderator ABG Co-chairman John Lavelle, a veteran commercial broker with Rand Commercial; ABG Co-Chair Andrew Fetherston, a principal of Maser Consulting; Tom Weddell, partner with accounting firm RBT CPAS, LLP; Scott Oling, a partner with PKF O'Connor Davies, LLP; Alan Seidman, executive director of the Construction Contractors Association and Maureen Halahan, president and chief executive officer of The Orange County Partnership. More than 100 municipal officers and business professionals participated in the Zoom webinar.


Orange County Executive Steve Neuhaus also provided his perspective on county budget operations and the current business climate in the region.


Lavelle began the panel discussion by pointedly describing the fiscal dilemma facing municipal and school district officials at the moment. “It’s no secret that we have a national crisis going on. That crisis is about to hit home locally because all of our municipalities are about to be faced with lost revenues, increasing bills and the need to balance their budgets.” He added that the intent of the program was to offer municipalities options and potential solutions to help communities survive the fiscal fallout from COVID-19.


Weddell and Oling discussed the fiscal squeeze facing county, local governments and school districts due to the economic fallout from COVID-19 and related that while commercial real estate only makes up 7% of all land parcels, this sector contributes 30% of all tax revenues in Orange County. At present, localities and school districts are operating under a dark cloud. Gov. Andrew Cuomo has threatened to cut state aid to local governments, school districts and hospitals if Congress fails to enact further COVID financial assistance.


Oling related that with today’s historically low interest rates, municipalities can take on needed infrastructure projects and can also save further by opting to extend the payment term on bond anticipation notes from five to seven years.


Weddell noted that commercial projects would provide municipalities significantly more revenue as compared to residential projects.


In order to attract new development, Weddell and Oling advised that municipalities should provide developers with a predictable review process.


To provide assistance for municipal planning officials, the ABG released three publications: The newly updated “Increasing Tax Rateables” Booklet,” “The 2019 SEQR Cookbook: A Step-by-Step Discussion of the Basic SEQR Process” and “The Understanding the Approval Process Flowchart.”


Panelists pointed to a number of successful commercial projects that are bringing in significant tax revenue, including the multi-tenanted Chester Industrial Park, which contributes $4.7 million in tax revenue each year. Also, the Medline project in Montgomery will contribute more than $26 million in taxes over the next 11 years as compared to a total of $499,500 in the same time frame if the property was left vacant.


The Amazon project in Montgomery will contribute $29 million over the next 15 years in taxes under a 15-year PILOT and in year 16 will pay nearly $3 million a year in taxes.


The CCA’s Seidman, who is spearheading the “Brighter Hudson Valley Together” media campaign, said that while the quality of life in the region is a definite draw, the high cost of business in Orange County is a significant impediment to economic growth.


Seidman, a former Orange County legislator, related that he understands that municipal approval agencies need to ensure that a project is done right and that traffic, noise, environmental and other issues are addressed.


“We are looking for good projects,” Seidman stressed. “We are not looking for any project. We are not looking to pave over the county. We want projects, diverse in nature that provide good jobs for our kids, our neighbors and the people that live here.”


Both Seidman and Orange County Executive Neuhaus noted that New York City residents and businesses are now looking to relocate to the suburbs. Neuhaus related that the county’s recent marketing campaign for the Camp LaGuardia property in the Wall Street Journal has produced a number of companies and developers that have expressed interest in investing in Orange County.


He added that NYC businesses that have employed work at home policies are also considering reducing their presence in the city and opening some operations in Orange County. Safety concerns are another driver of relocation demand from New York City.


“There are a ton of opportunities for every town, village and city in Orange County,” Neuhaus said. “I don’t look at this bad economy and this crisis of COVID as a way to hide under a rock until the whole thing (economy) is open and we get the green light to come out.”


He continued, “The real question is if you are a town, village or a city, where are you going to be when the next Medline comes? Where are you going to be when the next Mediacom comes? Where are you going to be when the next LEGOLAND comes?”


The Alliance for Balanced Growth is a cooperative effort between area developers, landowners, commercial real estate professionals, engineers, land-use attorneys, construction services and the Orange County Partnership. Their mission is straightforward—to present a strong, unified voice for responsible development in Orange County.