During 18 years at NYCDCAS, Debbra McAllister completed more than $200 million in real property acquisition transactions.
Five Questions With Orange County Executive Steven Neuhaus
To say that there has been a lot on the plate for Orange County Executive Steve Neuhaus would be an understatement. In his second term of office he had to deal with the death and devastation caused by the coronavirus pandemic beginning in March 2020.
In an exclusive interview with Real Estate In-Depth, Neuhaus discusses how he used his experience in the military to spearhead county operations in the tumultuous and tragic early days of the pandemic. He also talked frankly about the scandal at the Orange County Industrial Development Agency, the changes he feels are necessary at the IDA and whether the plea bargain reached by three IDA officials with prosecutors that required reimbursement of well over $1 million, but no jail time, was appropriate. Neuhaus also discusses the Orange County economy post COVID and how important a possible expansion of Route 17 would be for Orange County and New York State.
A life-long Orange County resident, Neuhaus and his two sisters were raised on a working farm in Southern Orange County that is still operational today. He attended Monroe-Woodbury High School and took courses at SUNY Orange during his senior year. Neuhaus went on to receive a Bachelor Degree in History/Political Science from Mount Saint Mary College as well as a Master Degree in Public Administration from Marist College. He is also a graduate of Orange County’s Leadership Orange program.
Neuhaus is a Lieutenant Commander in the U.S. Navy Reserves, currently assigned to a Naval Special Warfare team. He has earned two warfare designations: Seabee Combat Warfare (SCW) Officer and Navy Expeditionary Supply Corps Officer (NESCO) and holds certifications from the Naval War College and the Joint Special Operations University. He also received his Joint Professional Military Education I degree in National Securities Studies in May 2019. Neuhaus returned in June 2019 from a six-month deployment to Iraq after serving with the Combined Joint Special Operations Task Force.
Neuhaus, a Republican, was sworn into office on Jan. 1, 2014 after having served as the Town of Chester’s Supervisor for six years. At deadline, he is running unopposed for a third term of office this November.
Real Estate In-Depth: With COVID infection rates and deaths down in Orange County and elsewhere throughout the state, do you believe the worst of the pandemic is behind us? And if that is true, how has Orange County emerged from the COVID pandemic?
Neuhaus: I think the worst is behind us. I think we have come out strong out of it, although it was damaging. So, about a month-and-a-half ago (after) I got assigned to the Pacific Fleet in March as a commanding officer of a new unit—my first command assignment, I was out in Hawaii and Hawaii is really strict. They are just loosening up now as you are interviewing me… But to put it in perspective, Hawaii has 1.7 million people, Orange County has 400,000 people. We have significantly more deaths (861 in Orange County from COVID-19 as of July 6, 2021) than they did and even a lot more than some of the other counties in New York State. There were a couple of factors: we felt the brunt of the pandemic early. It hit the Northeast, in particular, New York and New Jersey, the hardest. Some of these other states had the ability to play “Monday Morning Quarterback” to see what was going to happen to them. We have definitely emerged stronger, but we did have some significant damage done. Some of the damage that we are still reeling from today is the massive amount of people that are still unemployed, which has gone down, but employers still have to pay unemployment, while at the same time they need to fill employment positions. There are many cases where I have employers that are paying for 20 people who are on unemployment, their jobs are available for those 20 individuals to come back to work, they (the workers) are protected from not coming back and the employer is forced to hire another 20 people to make up for that gap.
So, that seems to be the legacy problem that I am dealing with now, as well as some problems with landlords, because of protections not being able to evict and not having tenants pay, they have recurring bills but they don’t have that income coming in. I believe this will all be fixed by September if the federal government doesn’t keep extending it… I think the worst is behind us.
Editor’s Note: County Executive Neuhaus said he was still keeping a watchful eye on the Delta variant and its possible impact on the county, but noted that due to the high number of vaccinations, the county’s worst days are behind it in terms of the pandemic. He added that sales tax collections are up 24% from last year. Approximately 70% of that increase was collected right after the economy first opened back up in May and June of this year.
Real Estate In-Depth: In looking back on the past 16 months of the pandemic, is there any event or moment that affected you personally the most and has there been anything positive to come out of this that you can point to?
Neuhaus: At the beginning of the pandemic it was mitigating the deaths and exposures and also resupplying and providing supplies for hospitals, nursing homes and even towns, villages and cities and for their police departments. That was our beginning mode. We had to buy 18 ventilators. The county was suppling a majority of the PPEs for nursing homes and a good chunk of the supplies for the hospitals and then buying refrigerated trucks to store the (human) remains in. The team during that stage was phenomenal. We had hospital staff embedded in our 911 Center. As much as it was a burden and difficult to get through, from a military perspective it was my sweet spot. I felt at home. I think the people did a phenomenal job. I think most Americans don’t want to be spectators. They want to be part of the action—part of the solution and they did that. Then we moved into kind of a pause last summer. The (COVID infection) numbers went down, some things opened up, however most things were canceled… Then all of a sudden, we get into the fall and right after Thanksgiving things skyrocketed and we were in the next phase of this. Right before Christmas, the vaccines came out and we had to assemble a team of a few hundred people, a third of which were volunteers, to run these mass vaccination clinics. So, that was another proud moment for me as an American to see people from all walks of life coming together. I had people that were wealthy, that were poor, people that were in other professions that just took a leave of absence to volunteer to be part of something bigger than them. So, those are some things that I will never forget…
Real Estate In-Depth: In 2021 has the commercial/industrial sector demand continued to be strong in Orange County and if so, are there any major users mulling investments in the county? Also, tourism and the TV film production sectors appear to be emerging industries in the county. Do you agree?
Neuhaus: The commercial and residential sectors have been off the charts. Just for an example in residential, we had 10,000 new people register to vote six weeks before Election Day last November. Most of those people left the five boroughs, they were fleeing from what happened with COVID and I think from some of the civil unrest, to get to a better lifestyle and that has fueled the housing market. You talk to people from around the county and the housing market is hot—Florida, Colorado, all these places are seeing surges.
You are also seeing a surge in Orange County’s commercial market. A lot of distribution still, which has some positives and negatives depending on how people read it. I think it is good, but you have to pick the right ones for you and you don’t have to give away the store for each one. I see (demand) off the chart. On a regular basis I am meeting with people, including in Manhattan where I have been going back about every two weeks now, meeting with big executives that are kicking the tires to come up here (mainly for back office).
If you look at some of these companies that are down in New York City, some of them are telling me they are never going back to a physical footprint. They have been working from home for so long, that their new model will be to rent a massive amount of hotel rooms quarterly and use their conference rooms to meet with their clients if they need to physically meet. They have gotten so accustomed to Zoom, it has really accelerated the transformation of our society probably by 25 years just because of COVID…
I see a lot of activity in commercial and still heavy in distribution. We are still getting demand for 500,000-square-foot to 1 million-square-foot big distribution centers with some manufacturing aspects to it. We have this big company called “Royal Wine,” they are the biggest kosher wine manufacturers in the world, they are in New Jersey and they have bought the old Kikkerfrosch (now Tri-State Logistics) site in Goshen and they are moving full speed on it. They are going through the approval process right now. We also have a lot of companies, such as Top Golf, Bass Pro, things of that nature that have a recreational and tourism, aspect to them (that are looking at investing in Orange County).
Tourism is off the charts. You are going to see the county do a number of things. Our Concert series is booming at Orange County Speedway. If you are a local guy like me, 20 years ago (concerts) were hot here with all sorts of major acts. Kind of died down for a bit, but now it is emerging strong. Toby Keith, Cheap Trick, George Thorogood are headlining this year’s acts, but there are many, many more. I am getting calls regularly to not only have concerts at the Fairgrounds, but also at the county parks. All of those festivals that were canceled in the Hudson Valley are almost all now (taking place) in Orange County… Editor’s Note: County Executive said it will be doing 10 drive-thru festivals in 2021. He added that the German Festival usually held at Hunter Mountain, will be held in Orange County at county parks in September and October. He also noted that television/film production has increased significantly in the county to the point that demand for more production space has put some strain on the distribution sector of the commercial market since the production firms are also seeking warehouse and distribution type facilities in the county.
Real Estate In-Depth: Recently, chief officials of the Orange County Industrial Development Agency pled guilty to corruption charges and agreed to reimbursements totaling well in excess of $1 million to the agency. Do you believe that major changes need to be made and if so, please explain? Also, do you feel that their plea deals with the District Attorney and State Comptroller should have included some jail time?
Neuhaus: First off, I think there should be major changes. The IDA historically has been a “Good Old Boys’ Club.” Its (Directors) are appointed solely by the Legislature with no input from the County Executive whereas we have a ton of other Boards—Orange County Community College, Soil & Water Boards, Agricultural Boards and Development Boards, where the County Executive makes recommendations and the Legislature confirms or denies them. I have never had any of my confirmations denied since I have been in office. They have all been historically unanimous votes. The IDA is its own animal. It has been appointed by the Legislature and to me everybody that has been on it for the most part is riddled with conflicts. Whether it is the industry they work for or the industry they represent, that inherently starts off with major conflicts. Many of the members of the IDA Boards have had their personal companies benefit from them being on the IDA. That should stop. They need to pick some people without conflicts. It can be done. I did it with Orange County Community College, which was sinking financially. I put on four Board members—retired bankers, retired accountants—that knew their way around both good and bad times and they straightened it out. So, I think that could help with the IDA. Those (conflict) rules are going to be coming down sooner or later, whether it is the Legislature that is proactive and makes some of those steps themselves or whether it comes down from a higher power like the state or somewhere else.
I think those who pled guilty, in particular the $1-million man, should have gotten jail. He was the kingpin of this and the whole thing stinks to the public of rich man’s justice—you pay your money back and you don’t have to go to jail. By the way, if you pay it back in a month or two, your felonies are going to be reduced to misdemeanors… When we saw this whole case portrayed to us on how blatantly they ripped off the taxpayers, because I consider it taxpayer money, some people don’t, but it is, you are defraying taxes. So, I am disappointed in the sentences (plea agreements). I think the punishment does not match the crime… I think this is just a chapter that is closed. I think you are going to see a few more chapters develop over the next few months if not years as they try to really fix what happened here…
Real Estate In-Depth: The New York State Department of Transportation recently held a webinar on its ongoing study of the possible expansion of Route 17. The DOT study, which is expected to be released at the end of October, pegs the cost of the expansion at anywhere from $245 million to as much as $1 billion, depending upon the scope of the project. Is this project critical to the region and is it feasible considering the high cost?
Neuhaus: This project is critical for the State of New York, not the region. There is no region in the State of New York that has the amount of tourism value that is being developed right now than Orange County—nobody. Dinosaur Park is being done (in the Town of Wallkill), LEGOLAND New York, the largest Legoland in the world until the Chinese get theirs online (just opened). This is a prime opportunity. The same thing with Woodbury Common, which is poised to do a massive expansion. All those will benefit from the expansion of Route 17. I think there has never been a better opportunity than today. Whether it’s $1 billion, $1.5 billion or $500 million, whatever that number is, there will never be a better opportunity in my lifetime. There is a massive federal infrastructure bill, you have the Senate Majority Leader Chuck Schumer from New York State, so this is an opportune time for us. Is it guaranteed to happen for us? No. But, if there was a loud chorus of people saying, “This is the project to do. Now is the time.” (If the federal infrastructure bill passes) it (the Route 17 expansion) should be the first one done in New York State. They could do what they want in New York City, they have a lot of infrastructure issues too, but this is a region that is growing. You see massive commercial and residential development. Residential development in Southern Orange County is off the charts. You are going to need to match that with a transportation system that actually works. Editor’s Note: When asked what the regional fallout might be if the Route 17 expansion project is not undertaken, the County Executive responded: “You are going to have Planning Boards that are going to say, ‘We love the project, but it is just not doable with the current infrastructure.’”