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An $80 Million Benefits Package Awarded To Amazon To Build A 3.2 Million Square Foot Warehouse Hangs On Validity Of State-Appointed Monitor’s Veto
The Orange County Industrial Development Agency (OCIDA), believing that a veto of a benefits package it awarded Amazon in October to locate a 3.2 million square foot logistics/distribution center in the county is invalid, has filed a lawsuit in Orange County Supreme Court, asking the court to invalidate the veto.
The OCIDA says that veto was both untimely and the product of improper influence. It filed suit against the New York State Inspector General’s Office (NYSIGO), which oversees the state-appointed monitor, and against OCIDA monitor Brian Sanvidge.
On the issue of timeliness, the OCIDA argues that November 25 veto of the October 23 resolution granting the benefits package was late – that an agreement giving the monitor until November 10 lapsed without the monitor taking action.
Under the law, Sanvidge has 72 hours after a resolution awarding benefits is passed to issue a veto. There is no mechanism to appeal a veto other than challenge its validity.
Although neither the NYSIGO nor Sanvidge has answered the petition, based on the court filing, the OCIDA is anticipating the monitor relying on a verbal agreement to extend the deadline that the OCIDA says never occurred.
On the improper influence claims the OCIDA claims that State Senator James Skoufis (D-Cornwall), a long-time critic of the IDA, improperly influenced Sanvidge to issue the veto.
In a five-count complaint, the OCIDA seeks to nullify the veto, effectively allowing it to go ahead and grant Amazon more than $80 million in sales tax exemptions, recording exemptions, and property tax breaks.
Back in 2023, Scannell (an Indianapolis-based industrial development company) and Amazon secured approvals for construction of a warehouse at the 22 McBride Road, and at the time sought tax exemptions in excess of $8.5 million to build a 925,000-square-foot warehouse in Slate Hill, according to a joint application for incentives filed by the developer and Amazon to the Orange County Industrial Development Agency. The application valued the project at $204 million.
In 2024, Scannell and Amazon submitted a much larger proposal. The 100-acre property is currently an active quarry, and the new plan call for a 3.2 million square foot warehouse. In October, the OCIDA granted Amazon in excess of $80 million in tax incentives.
According to the petition, filed December 23, the Amazon project, which is estimated to cost up to $600 million to develop, will support up to 2,400 local construction jobs and the creation of 750 jobs within three years of completion. The Amazon project will also generate substantial sales and property tax revenue on an annual basis. All told, OCIDA projects the direct and indirect economic benefit of the project to exceed $900 million.
In October, Skoufis asked the state-appointed monitor to veto a 15-year, $80.2 million property tax break, characterizing the Orange County IDA’s approval as “a massive, unwarranted giveaway by any objective standard.”
In a letter dated October 24, Skoufis urged Sanvidge to veto the approval, which if vetoed would return the proposal back to the IDA for reconsideration. Skoufis wrote that the action by the IDA Board of Directors was a violation of the Agency’s Uniform Tax Exemption Policy. Skoufis said the IDA Board failed to consider the quality and salary of jobs projected to be created, onsite childcare requirements, public support or opposition, impacts on the environment, and the need for additional municipal services to support the project.
Skoufis said that the warehouse project does not require public subsidies to move forward.
In response to Skoufis’s letter, Sanvidge sought additional time to review the benefits package and secured an extension of time from the 72-hour statutory review window. Fact-finding by the court may be necessary to determine exactly how much additional time was secured and what agreements were made between Amazon, Scannell, the OCIDA and Sanvidge on when Sanvidge’s veto was due.
If the veto stands, the OCIDA can still reconsider an award of benefits at a future public hearing.
In a letter to the NYSIGO, Lino Sciarretta, Esq. of Bleakley Platt & Schmidt, the Orange County IDA’s general counsel, said that the monitor had no objections to the incentive package until Skoufis began publicly mounting his objections. Sciarretta requested the Inspector General replace Sanvidge and “appoint a qualified, independent successor to serve through the statute’s sunset of May 3, 2026.”
Sciarretta also said the Monitor’s actions “threaten to chase away a monumental economic opportunity from Orange County and its residents—and potentially others in the future—but he has also eroded the public’s trust, the agency’s trust, and that of every applicant and professional who participates in OCIDA’s process in good faith.”
Sanvidge told CONSTRUCTION NEWS, “I think it is really unfortunate that the (IDA) executive director (Bill Fioravanti) would choose to look to have the monitor replaced, keeping in mind that the monitor was put here by state legislation because of the prior criminal activity of the previous IDA and the oversight that is needed of the IDA. For the IDA to be spending hundreds of thousands of dollars of taxpayer money to avoid oversight is unconscionable.”
Skoufis has been calling for legislative and budgetary reforms concerning IDAs. He is pushing to mandate IDAs within Orange County submit proposed tax breaks for a given project to each impacted taxing jurisdiction, and that IDAs cannot proceed with awarding tax breaks unless the governing bodies of these jurisdictions approve them. Such safeguards to protect taxing jurisdictions and their taxpayers are already being successfully and voluntarily applied by the Rockland County IDA, where the IDA can authorize, but not impose a PILOT agreement on a taxing jurisdiction.
