The Partnership recently hosted a virtual Alliance for Balanced Growth (ABG) meeting which was well attended by our members and many guests. The Alliance for Balanced Growth (ABG) is a standing committee of the Orange County Partnership with the mission to create a unified voice for responsible industrial and office development while respecting and preserving our quality of life in Orange County. We work with local, county and state government, as well as our business community to provide factual information on the value of projects, the taxes they generate and the multiplier-of-millions of dollars they contribute to the community.
At this time Orange County has many quality development projects before various boards seeking final approvals and permits so they can start construction. Each project signifies a quantifiable dollar value that can be calculated and counted on. There are fees paid to various boards and permitting agencies in each municipality. When construction begins, hundreds of contractors, consultants and vendors are hired and working at the site. They spend money in the local community. When the construction is complete and the project opens, companies begin to hire local people, and the multiplier grows with permanent employment.
We started this year with confidence in a strong market, and just like that, everything stopped. Sound municipalities (like financially sound businesses) run their budgets just like we do in our own personal lives. We bring in money, we spend money and we keep some to protect and insure financial security. So, let’s take a look at municipal spending --
Municipalities spend on such things as:
- Public safety
- Parks and recreation
- Infrastructure and utilities
- Transportation
- Education
- Insurance / trust expenditures
- And waste management just to name a few.
A municipality’s money largely is generated through property and sales tax. During the COVID shut-down, stores closed and sales tax revenue dried up. There is much uncertainty about how soon consumers will feel safe and financially able to shop again, therefore the sales tax generation cannot be counted on when compared to an average year. In addition, many municipalities have lost a percentage of small businesses that simply couldn’t hold on.
But, we have hope. Orange County is a highly desirable location for certain industry clusters that will be the most active post-COVID-19. Advanced manufacturing, transportation and logistics, software & IT and Food/Beverage processing are among the top contenders to follow. Here’s where good economic development, site preparedness and corporate attraction efforts come in.
We conducted a research study on several company attraction/expansions that occurred in Orange County, NY over the past 5 years. The list of projects clearly reflected a strong economy and industry diversity. The numbers posted are projected and reported as accurate. Here are some highlights:
Medline: at 1.3 million s/f, in the next 11 years will pay $26,161,311 in taxes.
Bluewater/ Amazon: at 1+Million s/f, over the next 16 years will pay $25,299,536 in taxes.
McKesson: at 340,000 s/f over 16 years they will pay $11,969,130 in taxes.
LEGOLAND: at 470,000 s/f, over the 22 years following construction, will pay $46,753,712.19 in taxes.
Amy’s Kitchen: at 369,000 s/f, over a 16 year period, will pay $15,212,974.54 in taxes.
King Zak/Gam Products: their 70,000 s/f expansion, in just 11 years, with will pay $952,334.62 in taxes.
Kraftify: their 15,000 s/f expansion will pay $402,118.33 in taxes over the next 11 years.
We’ve only highlighted a few diverse projects here for illustration purposes. The fact is that if these companies did NOT come, one can only calculate an even larger deficit in municipal budgets. Municipalities need to take a hard look at what they have in the pipeline, and maximize their efforts to get those projects through approvals and start generating revenue for their town.
It’s a matter of dollars and sense.
