Montgomery project under fire
Just a few short months ago, a large crowd gathered in Montgomery to celebrate the groundbreaking of a multi-million dollar facility on Neelytown Road. Now, another group has come together to protest the natural food distribution company and the agreements that brought it to the town.
The new 505,000 square foot facility for United Natural Foods, Inc. is rapidly rising in Montgomery, where construction workers have been on the job even in December. Their completion goal is around June of 2014 and they have already begun to hire workers for the new facility.
Meanwhile, various groups and organizations have lodged a complaint against the company and the tax incentives granted by the Town of Montgomery IDA. That agreement, referred to as “payment in lieu of taxes” or a PILOT agreement-states that the company will pay the full taxes on the land and for the first five years, pay 50 percent of the value of the improvements on the land. Thereafter, over the next ten years, that discount will gradually decrease until the company is paying the full assessed value on both the land and the new facility. All of the special districts, such as the fire department, will be paid at full value throughout the agreement.
“UNFI expects nearly $18 million in public subsidies, yet has refused to deal fairly with the community or follow a truly accountable public process for awarding subsidies,” said Tomas Garduno, political director at Alliance for a Greater New York (ALIGN). “They get three strikes—for dodging taxes, dodging questions about the environmental impact of this project, and dodging their record on workers’ rights.”
Activists with ALIGN, the Hudson Valley Labor Federation, Teamsters Local 445, Community Voices Heard, Organic Consumer’s Association, Getting Our Money’s Worth Coalition and local parents and teachers traveled to Rhode Island on Dec. 18 to attend an annual meeting of UNFI shareholders, where they protested, spoke out at the meeting and held a mock ceremony to induct UNFI and Whole Foods into the “Corporate Tax Dodgers Hall of Shame.”
Some of those who spoke at the meeting included the Organic Consumers Association (OCA), which aired concerns about the impact of the Montgomery site on the environment.
“Along with Riverkeeper, we have serious concerns that this project was approved without weighing the impacts of storm water pollution on surrounding communities, without a climate change risk assessment and without looking into the many available brownfield redevelopment alternatives in the area,” said Alexis Baden-Mayer, political director of OCA.
The Town of Montgomery Planning Board did conduct an environmental review prior to approving the project earlier this year. The building itself will also be LEED Gold Certified and the company has committed to conducting a noise study post-construction, in consideration of neighbor’s concerns.
“It’s not enough to build a LEEDs building to make a project sustainable – the building’s impact on community, land, air and water matters as well. UNFI and Whole Foods claim to care about the environment, but UNFI is disrupting ecologically-sensitive wetlands, while turning farmland into a giant parking lot,” said Baden-Mayer.
Others upset by the project were concerned about the financial impacts of the agreement with the IDA.
Tim Brown, President of the Valley Central Teacher’s Association, pointed out at the shareholders’ meeting that the school district is in a financial crisis and questioned the priorities of the IDA members that gave the company the tax breaks. He noted that in the last five years 107 teaching positions have been cut, the Maybrook Elementary School has been closed, art, music and library have been eliminated for elementary children this year and kindergarten has been reduced to a half day program. JROTC and sports were cut from the budget, but salvaged due to community actions and fundraising efforts.
“Waiting until the year 2029 for UNFI to be an equal participant in supporting the local community and its schools is an unsustainable and inherently unfair expectation,” said Brown. “I ask that UNFI demonstrate its sincerity with regard to its stated Core Value of Community by reevaluating what it considers to be its fair share of taxes owed to our children.”
Brown explained that with the tax cap, the school district can’t increase taxes as needed and subsequently has lost $24 million in state aid over the last five years “because they’re not charging enough in taxes.”
“We’re being squeezed between two contradictory laws. You can’t have both laws at the same time,” said Brown.
Looking at the agreement made with the Town of Montgomery IDA, Brown said more consideration should have been shown for its impact on the school district. He is hoping for some level of IDA reform to include more input from the school districts impacted by their agreements.
“In the current financial crisis, consider the school districts,” said Brown. “None of these deals should be made without input from the schools. There is a loss of potential taxes based on their decisions, but the schools have no say.”
It is noted however, that Dr. Richard Hooley, Superintendent of Schools for the district, spoke in favor of the project during a public hearing for the Planning Board in June, stating that the project would help the tax base and therefore the school district.
“It’s only a win, never a loss, when these companies build,” said Maureen Halahan, president and CEO of the Orange County Partnership, and supporter of the UNFI project.
Halahan explained that the PILOT agreement was offered to the company as an incentive to bring their business to the town. The terms were driven by the fact that not only was UNFI being wooed by other local towns like Newburgh with similar agreements, but by other states as well, including Pennsylvania and New Jersey.
“Almost all offered some sort of incentive,” said Halahan. “Pennsylvania and New Jersey were begging them to go there.”
Halahan stated that the town and the school district will only benefit from the project, noting that the company will be employing local workers who will then spend their money in the community. In addition, the town and the school will soon begin to see an increase in tax revenue from the property, which has sat vacant on the market for more than a decade.
Montgomery Town Supervisor Mike Hayes, who is also a member of the town’s IDA, said the IDA sends letters to every taxing jurisdiction when they have an application in front of them—which includes the school district.
Brown said he believed that UNFI and the IDA had operated within the rules in reaching their agreement, but said the reality remained that kids entering kindergarten this year will graduate from the Valley Central School District before UNFI ever pays the full measure of taxes on their property.
Brown concluded by asking UNFI to “re-evaluate” their current agreement with the IDA or open direct communication with the Valley Central School District to find a way for UNFI to demonstrate their commitment to the community.
“UNFI is not responsible for the Valley Central School District’s current fiscal crisis,” Brown said to the shareholders. “However, it is hoped that you will choose to be a part of the solution.”
Another major complaint lodged against the project is that the company should be hiring more local people for the construction jobs generated by the new facility in Montgomery.
“I can understand giving some incentives, but make sure our local people work,” said Adrian M. Huff, of Teamsters Local 445. “That isn’t happening.”
“This project could have been built entirely with local union construction workers, but instead, UNFI brought in an out-of-state contractor and plenty of out of state materials, which could also have been easily sourced right here in New York,” said L. Todd Diorio, president of the Hudson Valley Building and Construction Trades Council. “Not only are qualified and unemployed local people losing out on these jobs, but less money will be circulated in the local economy, making the larger community lose out on the economic benefits of new construction.”
Halahan explained that when large national corporations like UNFI build in different locations across the country, they use one general contracting agency that understands their needs. They then put out the subcontracting work for bids from the local community.
According to figures provided by the Orange County Partnership and verified by UNFI, 55 percent of the building cost, or $22.2 million dollars, has gone to local contractors from Montgomery, Walden, Pine Bush, Newburgh, Middletown, Chester, Campbell Hall, Goshen, Poughkeepsie, Wappingers Falls and other towns in New York. Only seven contractors out of the more than three dozen listed were located out of state.
“This is only a win,” said Halahan, noting that the town could not mandate that the company hire only local companies. “Nothing would make me happier than if every single person on that site was local.”
The other concern for employment is whether the company will create as many permanent jobs as it has promised, which is about 350 to start.
Kristi Barnes, a spokesperson for ALIGN, said their organization had examined the state’s economic development programs to determine if they were succeeding in creating the jobs New Yorkers need. Their report indicates that over a two year period “67 percent of mid-Hudson Valley IDA projects lost jobs, failed to create the promised jobs, or failed to set any job creation goals.”
According to ALIGN, UNFI did not make a commitment to create that projected 300 or more jobs in their financial agreement with the IDA, meaning they could create fewer jobs and not be held accountable.
“Right now, the Montgomery IDA is letting UNFI just take the money and run,” said Elizabeth Soto, executive director of the Hudson Valley Area Labor Federation. “Companies that accept public money must be held to a higher standard.”
“I’d like to see the IDA do more homework when they bring companies like this in,” said Huff, citing the local school district’s financial difficulties. “If [UNFI] wants to be a good neighbor, they should show it by helping the schools out-show it by hiring more local people.”
Barnes stated that they are filing a complaint against UNFI and the town IDA with the NYS Authorities Budget Office, the agency charged with overseeing public authorities. In that complaint, they cite inadequate public notice, problems with the agreement, an incomplete application for financial assistance, failure to respond to a FOIL request in a timely manner and a potential conflict of interest for an IDA board member.
Representatives of UNFI did not respond for comment prior to deadline.
By RACHEL COLEMAN