FOR IMMEDIATE RELEASE: Wednesday, December 18
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Local Activists Move to Take Back Tax Breaks, Take Their Fight from the Hudson Valley to the State and Nation
Newburgh, NY—Dozens of community, labor and environmental activists gathered today to protest a new publicly-subsidized development in the town of Montgomery. They inducted organic food distributor United Natural Foods, Inc. (UNFI) and its retail partner Whole Foods Markets into a virtual Corporate Tax Dodgers Hall of Shame (http://www.gettingourmoneysworth.org).
UNFI is coming to Orange County to service Whole Foods’ expansion in New York’s metro market.
“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 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 gathered with signs, banners and the dubious Tax Dodger award, before boarding a bus to raise their concerns at UNFI’s annual shareholder meeting in Rhode Island. There they joined shareholders and stakeholders highlighting unsustainable practices across UNFI and Whole Foods’ supply chain, and demanded restitution of the unsustainable subsidies in the Hudson Valley.
In return for the subsidies, UNFI expects to create over 300 jobs, but they did not make that commitment in their financial agreement with the Town of Montgomery, meaning they could create far fewer jobs and not be held accountable. The jobs are expected to pay less than average for the county. Labor advocates emphasized UNFI’s track record of violating workers’ rights and questioned the hiring at the job site so far.
“New York taxpayers should know that they’re financing a company that has a history of threatening, intimidating and firing warehouse workers at other locations around the country,” said Adrian Huff Secretary-Treasurer of Teamsters Local 445. “Unfortunately, the public never had the opportunity to ask if this is the kind of company we want to welcome into our community and invest in. If you come to New York you should show respect for its working families, pay good wages, pay your taxes: then you’d be received with open arms.”
“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.”
Local activists emphasized they want to take their fight from the Hudson Valley to the company nationally. UNFI and Whole Foods have a reputation for valuing sustainability, but activists challenged that.
“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 Alexis Baden-Mayer, Political Director of Organic Consumers Association. “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.” EPA estimates that water runoff is 40 – 60% lower for brownfields than greenfield developments.
Community advocates cited numerous problems in the public process for awarding subsidies to UNFI earlier this year. The company was originally considering another site in Orange County, but failed to show up at a public hearing in Newburgh to answer questions about the project. Instead, UNFI applied for approximately $14 million in tax breaks from the Town of Montgomery Industrial Development Agency (IDA). As the public began raising questions about the proposed project, the Montgomery IDA cancelled a public hearing at the last minute and rescheduled a “special meeting” without giving the proper notice. The IDA didn’t provide a routine Financial Assistance Agreement to the public, making it impossible to know how much the cost, scope and size of the project. The agency also failed to answer a Freedom of Information Law request to get this public information until 80 days after the subsidy agreement was finalized and only a few days before the project broke ground.
“This subsidy deal makes a mockery of public participation and community-focused economic development,” said Rae Leiner, Organizer with Community Voices Heard. “Playing neighboring towns against each other like UNFI did is unethical. We need greater transparency and corporate accountability in all subsidy deals so local communities can be sure they get their money’s worth from expensive corporate subsidies, ensuring hiring from all surrounding areas, and meeting the need for good-paying local jobs.”
The Valley Central School District alone stands to lose millions over the next 15 years because of UNFI’s subsidy. The District is already in such a severe budget crisis that it has eliminated elementary school libraries and arts and music programs, and the newly-approved budget cuts kindergarten to a half-day program, and cuts math, science, special education and foreign language teacher positions. And the town of Montgomery recently approved a nearly 17% property tax increase on homeowners, partially due to lost revenues from corporate subsidies.
Tim Brown, President of the Valley Central Teacher’s Association, questioned the priorities of IDA members for promoting big tax breaks to profitable multinational corporations, while town taxes on homeowners are increasing by 16.58% and severe cuts to local schools have eliminated or reduced programs for kids such as elementary library, music and art, along with a reduction in kindergarten from full to half day.
“Waiting until the year 2029 for UNFI to be an equal participant is 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.”
The advocates are filing a complaint against UNFI and the Montgomery IDA with the Authorities Budget Office (ABO), the agency charged with overseeing public authorities. The complaint details problems with the subsidy deal, including inadequate public notice, an incomplete application for financial assistance, failure to respond to a FOIL in a timely manner, and a potential conflict of interest for an IDA Board Member. Remedies could include terminating the tax exemptions and launching a full investigation, among others.
“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.”
Emphasizing that the problem with subsidies extends beyond just a handful of bad deals like UNFI and Whole Foods, advocates highlighted findings from a new report from ALIGN that examines how New York’s economic development programs perform regionally, and whether they are succeeding in creating the jobs New Yorkers need. The report showed that IDA net tax exemption spending rose dramatically in the Hudson Valley region, with a 57% increase from 2009 to 2011. Sixty-seven percent of Mid-Hudson Valley IDA projects lost jobs, failed to create the promised jobs, or failed to set any job creation goals.
ALIGN: The Alliance for a Greater New York’s mission is to create good jobs, vibrant communities and an accountable democracy for all New Yorkers. Our work unites worker, community, and other allies to build a more just and sustainable New York. ALIGN was formed in April 2011 through the merger of New York Jobs and Justice and Urban Agenda. Visit www.ALIGNny.org for more information.
The Getting Our Money’s Worth Coalition is a broad coalition of public policy experts, government watchdogs, labor unions, community and religious organizations, and concerned small business owners, workers and taxpayers. The statewide coalition is anchored by ALIGN: The Alliance for a Greater New York, the Buffalo-based Coalition for Economic Justice and Long Island Jobs with Justice.