FAQ's about IDAs and the OCIDA
Industrial development is the practice of actively influencing the business environment to foster economic growth, expansion and innovation. The intended goals are to increase high-quality, higher-paying jobs at stable, successful businesses and, ultimately, a stronger, more prosperous county for all.
Since 1969, New York State has allowed its counties and other local governments to establish Industrial Development Agencies (IDAs). These exist to encourage local economic development projects by offering financial incentives to private companies and not-for-profits, with the goal of increasing job opportunities, expanding the local tax base, and improving overall economic welfare in the area.
The Orange County Industrial Development Agency (OCIDA) is a public benefit corporation of the State of New York, established in 1972 with the mission to attract and promote commercial, industrial, warehousing, manufacturing and industrial development, consistent with the overall goal to advance job opportunities in Orange County.
IDA’s assist business primarily in two ways: IDA’s can provide tax exemptions or abatements to promote, develop and assist in acquiring constructing, equipping and furnishing of qualified projects and facilities. They can also act as a conduit for tax- exempt bonds, which are used to finance business location or expansion projects. These bonds can be at rates that are more favorable than conventional financing tools.
The OCIDA is 100% funded by transaction fees paid by the organizations receiving assistance. We receive ZERO revenue via taxpayer dollars and in no way do we negatively impact local school district or municipal budgets.
In fact, our incentive packages actually help secure new tax revenue from businesses for our schools, towns and villages, for years to come.
Day-to-day operations of the OCIDA are run by a chief executive officer and a small professional staff. The CEO is overseen by a Board of Directors comprised of seven volunteer Orange County residents. The Board also sets all OCIDA policies, and they make every single decision to award, terminate or recapture incentive offerings, following the agency’s Uniform Tax Exemption Policy (UTEP).
OCIDA members are appointed and removed by the Orange County Legislature.
- OCIDA is subject to oversight by several institutions including:
An independent, volunteer, non-compensated seven-member board of
directors appointed by the Orange County Legislature, - OC Legislature’s Education & Economic Development Committee (E&E) to whom
OCIDA reports regularly, - New York State Authorities Budget Office (ABO) where the mission is to make
public authorities more accountable and transparent, and to act in the public
interest consistent with their intended purpose, - Public Authorities Reporting Information System (PARIS) to which all IDAs report
to the ABO on a routine basis throughout the year, - Federal, State and local elected officials who actively engage in economic
development matters important to their constituents, - An independent Orange County-based CPA firm who serves as OCIDA’s external
Chief Financial Officer, - The New York State Comptroller’s Office,
- Local press and media which cover the OCIDA.
We support various industries that create employment opportunities in Orange County, specifically focusing on food and beverage, health and life sciences, advanced manufacturing, clean power generation and destination tourism. Generally, we tend to work with projects that involve costs of $1 million or greater to ensure there is an adequate cost-benefit ratio for the business who will incur the associated fees.
The OCIDA has been a key driver of job growth and economic prosperity in Orange County over the past 30 years. Click here for our latest impact report.
Our website is the ultimate resource for information on IDA projects, meetings and even key documents. For the very latest updates, you can follow us here or on our social media channels (see the bottom of this page). Our regular Board and committee meetings are always open to the public and are livestreamed on our YouTube channel. Please check our events calendar for future meeting notifications.
FAQ’s about OCIDA Incentives
Without new investment, towns and cities are condemned to a slow and steady economic decline. NYS IDAs encourage businesses out of state to move to New York to invest. Site selectors, professional business relocation experts, advise businesses on the best options for business investment. Site selection is very competitive with states competing for this investment and the resulting jobs. It is no secret that the Hudson Valley is a very expensive place to live. Without the help of an IDA, a business could not afford to move to or even stay within the County. IDAs require businesses to prove that “but for” the help of the IDA, a company will not locate here.
An applicant’s project may qualify for sales and use tax exemption, mortgage recording tax exemption, and/or a real property tax abatement in the form of a Payment In Lieu of Taxes (PILOT). See our Incentives page for more information.
The New York State Industrial Development Agency Act defines projects eligible for IDA benefits as: manufacturing, warehousing, research, commercial or industrial facilities, industrial pollution control, recreation, educational, cultural, horse racing and transportation facilities. In addition, certain health care, college dormitory and housing facilities can be assisted. Due to the laws and regulations establishing IDAs, we are unable to provide financial incentives to retail businesses, unless specific conditions are met.
We tend to work with projects that involve total costs of $1 million or greater to ensure
an adequate cost-benefit ratio for the company who will incur OCIDA and attorney fees.
Our fee structure can be found here.
An IDA applicant must be able to demonstrate to the Agency’s satisfaction that either the project is not likely to be undertaken without the requested financial assistance (the so-called "but for" test) or, alternatively, meet specific conditions. The grant, denial and/or conditioning of any financial assistance by the Agency is entirely within its discretion.
Please review OCIDA’s Uniform Tax Exemption Policy (UTEP) here for information on our priority industry sectors, corresponding PILOT schedules, etc.
Under federal tax law, IDAs can issue tax-exempt bonds to cover manufacturing facilities, governmental projects and exempt facilities (airports, solid waste facilities). Eligible projects can enjoy as much as a 2% reduction in interest versus conventional financing.
Industrial revenue bond (IRB) financing can allow 100% financing of an entire project,
including capitalized interest and soft costs, thereby reducing burdensome up-front
costs. For projects that don’t qualify for tax-exempt financing, IDAs can issue taxable
IRBs. The interest rates would be comparable to conventional financing, while all other
IDA benefits would be available to the recipient.
New York State law exempts governmental agencies, such as IDAs, from paying taxes. Therefore, in an IDA transaction, the agency takes nominal ownership of a property and leases it back to the applicant company. The project then avoids paying mortgage recording tax, as well as sales and use taxes on materials, equipment, furniture and fixtures purchased within the scope of the approved construction project.
Awarded to encourage economic development and create quality jobs, a Payments-In- Lieu-Of-Taxes agreement, or PILOT, enables a business to make graduated payments based on a negotiated agreement in lieu of, or instead of, simply paying standard property taxes based on the assessed value of the property after the improvements made by a construction project are completed. Once the PILOT expires – most commonly after 10- or 15-year period – the property will be assessed by the municipality and taxed as normal going forward. Those property taxes can never be abated, or discounted, again.
It is important to note that this agreement is only to abate property taxes on improvements to the property made by the OCIDA-approved project, so pre-existing property taxes do not change and are never lowered. Also, special district taxes such as for fire or ambulance services, can never be abated.
Generally, a company working under a PILOT agreement with the OCIDA is making a significant financial investment in the acquisition of land, construction of one or more buildings, and purchasing and/or moving sizable equipment to locate or expand their business in Orange County. Like any other investment, the company ownership, and their lenders, are seeking a return on their investment (ROI). These companies will weigh making that investment here against doing so in other counties, states and, in some cases, countries.
If making the same investment in another location yields a stronger ROI – all other factors being equal – then that investment, along with the resulting jobs, will simply go elsewhere. It is no secret that the northeast region and, specifically, the Hudson Valley is a high-cost area in which to locate a business. PILOTs establish a structured property tax payment schedule which typically provides an overall discount, and certainty that there will not be a reassessment of the property, likely increasing taxes, during the term of the agreement.
In addition to staff expertise and a review by attorneys with a specialty in economic development and public finance, the OCIDA conducts objective cost-benefit analyses and, as the size or impact of a project impacts, we will enlist independent, third-party tools and specialists to calculate the economic impact of a proposed PILOT agreement to make sure that a company is not unduly enriched.
The company receiving the benefit of a PILOT agreement makes a contracted covenant to create and/or maintain a specified number of jobs at various levels and salaries for each year of the agreement term, in addition to other potential community benefits. Also, OCIDA’s Local Construction Labor Policy ensures that any project we support is built by local men and women.
The OCIDA has a specific Recapture Policy in place that enables us to “claw back” incentives awarded to projects that fail to bring about the community benefits they pledged to in their original application (construction jobs, permanent jobs, total investment, etc). See the OCIDA’s Recapture Policy here.
The best way to find out if we can provide assistance to your growing business or answer any other questions, please Contact Us through our website, email us at business@ocnyida.com, or call us at (845) 234-4192.
