New York State's first business incubator dedicated to craft beer could be built on Long Island thanks to a $12 million project proposed by the Babylon Industrial Development Agency.

The agency plans to transform a derelict former missile-component test facility in Copiague into a multitenant production facility and tasting room for brewers, said Matthew T. McDonough, chief executive of the IDA.

The town IDA is "uniquely situated to acquire this property, renovate it and equip it to make a brewery incubator," said McDonough, 26, who came up with the idea last year after reading about a local brewer struggling to find space. "This project is saying that Long Island's craft beer industry is something to reckon with."

The industry has grown dramatically on Long Island and across New York State in recent years.

State production grew by 54 percent from 2011 to 2013, and the number of brewers more than doubled since 2012, hitting 207 in January, according to a report released by Gov. Andrew M. Cuomo's office in April. Long Island has at least 27 breweries, according to the New York State Brewers Association website.

Space for 10 brewers

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The IDA plans to buy the property at 1305 S. Strong Ave., demolish the existing 25,000-square-foot industrial building and construct a similar sized structure with individual working space for up to 10 brewers. In exchange for paying rent, brewers would have access to a tasting room for customer visits, and a shared production space with equipment for small to midsized operations.

"It would be a really great thing for the breweries trying to get started here on Long Island," said Paul Dlugokencky, owner of Blind Bat Brewery, who still operates out of his Centerport home. He has been looking for commercial space, but deals on possible locations have fallen through twice in the past two years, he said, making it difficult to ramp up production beyond the 60 barrels he makes annually.

"I'm very limited to how much beer I can actually produce," he said, adding that landlords are often uneasy about housing makers of alcoholic drinks.

Part of the reason the IDA is well suited to take on the project, McDonough said, has to do with the site's troubled physical condition and tax status. It has about $1 million in unpaid property taxes and penalties going back to the 1990s, a town spokesman said.

Deer Park-based developer Crescent Group Realty LLC, the current owner, purchased the property in 2005 and has been working with government officials to get it back on the tax rolls, resolve environmental issues and find a buyer, said Dominick Mavellia, president of Crescent.

The property is a state-listed Superfund site. A $750,000 New York State Department of Environmental Conservation cleanup bill for treating minor groundwater contamination -- the result of aged cesspools used by previous operations there -- is also attached to the building, which was constructed more than 60 years ago. The DEC reported in 2013 that the site was not a danger to residents because the area is serviced by public water now and not wells. The incubator will also access public water rather than wells.

Funding help sought

Town officials say they're impressed with the proposal, which has been presented to nearby residents over the past three weeks.

"We're excited about the potential," Babylon Town Supervisor Rich Schaffer said. "They've done a lot of community outreach. So far we've heard very positive comments."

To fund the project, the IDA is seeking state and federal funds, including $3 million from Empire State Development, $3.5 million from the New York State Energy Research and Development Authority, and $1 million from the U.S. Economic Development Administration.

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The IDA plans to turn to county legislators in hopes of having a portion of the $1 million in back taxes forgiven through a resolution. The agency is also seeking $250,000 in brownfield grant funding toward the cleanup bill, though Mavellia said his company has an agreement with the DEC that would absolve future owners of the cost.

McDonough said if funding comes through, the IDA wants to give the neighborhood "something we hope is aesthetically pleasing to the area that's had this blight for so long."