GOSHEN — The Orange County Partnership has filed a lawsuit accusing a state regulator of public agencies of exceeding its power and bullying the nonprofit.

The Partnership, which promotes economic development in Orange County, filed the lawsuit against the state Authorities Budget Office Wednesday in state Supreme Court in Orange County. The suit seeks to force regulators to reverse their position that the Partnership has long been a quasi-Orange County government department.

With a $1 million annual budget, the Partnership has grown into a local powerhouse since its 1985 founding. The Goshen 501(c)6 markets the county, helps firms find land, steers them through state and local project approval processes and shows companies how to get grants and tax breaks.

Due to not suing the ABO before the Partnership's window to do so closed, the nonprofit has been losing court battles with the ABO since 2011. Being deemed an “authority” means the Partnership is subject to the state’s transparency and public meeting requirements.

Public authorities are nonprofit corporations affiliated with, sponsored or created by a county or municipal government, according to the ABO. Authorities commonly handle functions like running housing and sewer systems.

Partnership President and CEO Maureen Halahan argues the Partnership was never a county arm, and her organization needs confidentiality to protect often-delicate negotiations to convince businesses to relocate or expand.

The ABO “is being a governmental bully, and it needs to be stopped” from over-regulation, said Richard Golden, the Partnership’s special counsel for the case. ABO Director Jeffrey Pearlman “wants to expand his power. He’s trying to use state power to bludgeon organizations that aren’t authorities,” said Golden

The Partnership follows an investor-member model, with funding from businesses paying to join, but the county has been a funder. In the past year, Partnership leaders have taken several measures to ensure the organization isn’t mistaken for a government agency.

They include removing Orange County leaders from the nonprofit's board; no longer accepting county funding ranging from 17 percent to more than half the Partnership's budget in years past; changing promotional materials billing the organization as the county's external marketing agency; and shedding its former parent company name, the Orange County Economic Development Corporation.

Pearlman acknowledged the Partnership has made structural changes via bylaw reforms. But its leaders can easily change their bylaws again, so they must dissolve and reincorporate the organization with a new charter to lock in the changes, he said.

The Partnership has no assets, real property, debt, mortgages or leases, other than a vehicle, and most of its budget goes to events promoting local economic development — and fighting the ABO in court, Pearlman said.

“So what’s the big deal here?” Pearlman said. “I’m not following the logic of them fighting what would be a simple reincorporation.”

“This has become more about someone’s ego in Orange County, and trying to prove that they’re right rather than following the law because bold print and another pleading doesn’t change the facts of the case,” he added.

daxelrod@th-record.com