Sullivan County Democrat
Callicoon, New York
March 10, 2009 Issue
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Contributed Graphic

AN ARCHITECT'S RENDERING of the elevation of the Yukiguni Maitake mushroom plant in Wurtsboro.

Empire Zone board has issues with Yukiguni Maitake

By Dan Hust
MONTICELLO — Empire Zone Administrative Board (ZAB) members are hoping that out of confusion will come clarity.
And there’s plenty of confusion to go ‘round.
Sullivan County’s Empire Zone program – which gives tax, wage and investment incentives to 138 companies at present – is still recovering from years of inadequate recordkeeping and oversight.
Under new leadership, that’s largely changed, but last week’s regular ZAB meeting featured one of the remaining bones of contention: Yukiguni Maitake Manufacturing Corporation of America’s proposal to build a mushroom processing facility near Wurtsboro.
County Manager and ZAB Chair David Fanslau distributed copies of a letter Zone Certifying Officer Josh Potosek had sent to Empire Zone State Director Randal Coburn in July and Coburn’s August 15 response.
Following up on concerns aired at previous ZAB meetings, Potosek wrote Coburn that Yukiguni has “failed to meet their stated goals as outlined in their application.
“The company has not proceeded with their original plan reportedly as a result of their involvement in ongoing litigation,” he added.
And since Yukiguni is now proposing a facility of reduced size, Potosek wondered if either issue would create the need for a decertification or recertification process in the Empire Zone.
Coburn replied that downsizing “would not trigger a new approval process.
“The company remains certified until its certification is revoked,” Coburn wrote.
He pointed Potosek to Section 959 of the state’s General Municipal Law and Part 11.9 of Empire Zone regulations to “carefully evaluate with your counsel all of the facts related to this matter against the criteria set forth in the law.”
Fanslau told ZAB members Thursday that Assistant County Attorney Tom Cawley had reviewed the rules and determined that Yukiguni’s case did not warrant decertification measures.
“I don’t think you went back far enough,” replied ZAB member Eileen Haworth Weil, a Summitville resident who has been lobbying for a review of Yukiguni’s Empire Zone status since before she was on the board.
“This company was actually in non-compliance in March 2004 [with their EZ application] ... and they still haven’t met the conditions for that approval,” she remarked, expressing frustration with the lack of clear records from that period.
She made a motion to have the ZAB look into decertifying Yukiguni, but Fanslau cautioned her that such a motion was likely out of order, since only Potosek can initiate that process.
Weil protested, saying the ZAB was supposed to have a decertification committee, but Fanslau replied that the yet-to-exist committee is intended to look into the decertification process overall, not for individual companies.
He reiterated Cawley’s opinion that Yukiguni’s litigation – recently settled in the company’s favor – had pushed the clock back on the five-year window an EZ-approved company has to begin meeting its goals. (In addition, Yukiguni’s benefits will automatically expire in 2014 if neither side takes action between now and then.)
Fanslau also castigated the state for shirking its responsibilities with the Empire Zone program, saying Coburn’s reply was weak, “half-baked” and “not worth the paper it’s written on.
“This letter ... basically tells us nothing,” he remarked in frustration.
But, reminded Weil, the state depends on local ZABs and EZ officials to recommend looking into particular issues, so she again pushed for a resolution on Yukiguni.
Sullivan County Partnership for Economic Development President Tim McCausland – who is not a ZAB member but attended the meeting last Thursday – felt such a review should encompass all the businesses that were approved during the time for which the local EZ has little to no records.
“The Partnership would resist looking at one application,” he remarked.
“You have to start somewhere,” said Weil, though she acknowledged focusing on Yukiguni could sound discriminatory.
Nevertheless, she amended her motion to have Fanslau and/or Potosek ask Cawley to review General Municipal Law Section 969 as it applies to terminating the zone in which Yukiguni’s proposed factory would sit.
Fanslau expanded that motion to include a review of such laws as they pertain to all businesses in the Sullivan County program, and it passed 6-1.
Fanslau, Weil and fellow members James Goldfarb, Jim Bertholf, Larry Steiger and Ted Pilonero were in favor, while Steve Drobysh was the lone dissenter. Guy Jollie was not present, and Michael Weiner was temporarily out of the room at the time of the vote.
The discussion then began broadening beyond Yukiguni.
Fanslau pointed out that the state has the final say on decertification, and in an effort to avoid giving Yukiguni reason to sue the county (and giving a competitive advantage to other EZ-participating counties), he advocated for the ZAB to create recommendations for the County Legislature to forward to state officials to change the program, rather than initiating Sullivan County-only changes.
With the controversy over Ideal Snacks’ application still fresh in his mind, Pilonero had ideas ready, including looking at what a company pays its employees in wages and benefits, what kind of other government aid it receives, whether it is a new or expanding business, and how much green construction it plans to implement.
Weil added that increased oversight should be a consideration, too, and EZ Coordinator Susan Jaffe said the state may be including many of these matters in its coming development plan for the EZ program statewide.
Fanslau remarked of his frustration with Ideal Snacks over its attorney’s reluctance to agree to a local hiring preference in order to get EZ benefits, though Drobysh wondered how residency would be established in such situations.
Fanslau said he’d bypass that issue by simply asking businesses to work with the county’s Center for Workforce Development, which attempts to find employment for locals.
Yukiguni will litigate?
Yukiguni officials were not present at last week’s ZAB meeting.
When contacted this week, Yukiguni’s attorney, Charles Bazydlo, expressed concern that the county is investigating the company’s benefits without including Yukiguni.
“They’ve never asked us for comment,” he said.
“We believe we are 100 percent legal,” he related of the Empire Zone benefits, adding that Yukiguni will indeed sue should those benefits be withdrawn.
Bazydlo also accused Weil of participating in the lawsuits and public comments against Yukiguni, stating that as a result she should refrain from voting on any Yukiguni matters in front of the ZAB.
“I think that she has a very strong bias against the project,” he said.
* * *
The next meeting of the ZAB will be held at the Government Center in Monticello on September 25 at 4 p.m. It is open to the public.

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