Woodbury Common Premium Outlet wins $4.4 million sales tax break

18 Jul 2013 | 03:58

— The company behind a massive upgrade to the Woodbury Common Premium Outlet has won a $4.4 million tax break from the Orange County Industrial Development Agency.

Simon Properties, which owns the outlet, planned the $170 million renovation now underway.

Once complete, the company expects a $90 million increase in annual sales.

Tourist destination
Simon Property's Senior Project Manager John Villapiano appeared before at a public hearing this week to explain why the company's development arm should be allowed to skip paying up to $4.4 million in local sales taxes on materials and equipment purchased over the course of the two-year construction.

“Woodbury Common is one of the primary tourist attractions in Orange County,” Villapiano said. “This renovation will greatly improve the overall shopping experience.”

The company holds a 99 percent share in CPG Partners, L.P., the developer in charge of construction and the entity applying for the tax break.

Included in the application was the possibility of further property tax breaks, which would grant property tax abatements and limit the school, municipal and county taxes collected as a result of the new construction, said Robert Armistead, chairman of the Industrial Development Agency.

“The agency contemplates that it will provide financial assistance to the Company in the form of … if necessary, a real property tax abatement, all consistent with the policies of the Agency,” according to the application.

Armistead said the agency took it upon itself to extend the possibility of a property tax break, even though Simon Properties hadn't asked for it.

Being treated fairly
Local representatives and members of the public criticized the IDA for combining the application for the sales tax relief with the “possible” application for property tax abatements.

Residents did not dispute the merits of the project, including the creation of roughly 500 construction jobs, improved traffic flows and better site design.

But they did question why the profitable firm should be exempt from local, regional and state sales tax on goods purchased locally.

Jennifer Carillo and her family have run the Harriman Army and Navy, a small local retailer, for more than 40 years. She said that attempts by her family to renovate their business property haven't qualified for tax breaks or incentives like those offered to Simon Properties and CPG Partners.

“One of the things that I do object to is that you are consolidating very, very important topics into one to convenience a very large and very important corporation,” she said. “Meanwhile, little people like us who try very hard to make a go of it, to bring character to our community are not being represented and they are not being treated fairly.”

Woodbury 'will benefit the least'

Woodbury Village Mayor Michael Queenan said he was against offering a property tax break to the Common.

"If you take traffic violations away, over 90 percent of the people appearing here in our courts are from Woodbury Common," Queenan said. "One of the things that I always thought was good about the Woodbury Common was the sales tax that's generated by the Common and the property tax.

"With this property tax abatement, this is not an advantage to Woodbury," the mayor added. "To be honest with you, there will be a lot of people who will benefit from the Woodbury Common renovation, but the Town and Village of Woodbury will benefit the least."

The question of extending property tax abatements for the project is likely to remain on the table until September, Armistead said.

After calls from the audience, Armistead promised a second public hearing if the developers chose to apply for property tax relief.

“The bottom line is that this is a great project,” he said.