The Nassau County Industrial Development Agency will consider a 25-year tax exemption for a pair of 15-story towers planned for the long-disputed vacant Superblock property on the Long Beach Boardwalk.
The IDA will hear the proposal from Manhattan-based iStar Financial for a 25-year PILOT, or payment in lieu of taxes, while the firm finances a project with AvalonBay Communities, also based in Manhattan, to build 522 luxury apartments on the long-derelict property.
The IDA will get the first presentation of the project Wednesday evening as iStar seeks the tax relief from the county. Taxes on the property now are about $500,000 annually. What would be paid if the exemption is granted could not be learned Tuesday.
IDA Executive Director Joseph Kearney said iStar has indicated it needs the PILOT to move forward. The IDA will consider the application and could order an economic analysis of the exemption at Wednesday's meeting. The board of directors could vote on the tax exemption after the analysis is completed.
"They will say unless they get financial relief, they will not build a project," Kearney said. "They have to establish that, unless this relief is granted, it doesn't make it financially worthwhile."
Officials at iStar could not be reached for comment.
The development proposal is moving forward more than a year after Long Beach settled a 2011 lawsuit with $5.25 million paid to the city from iStar. The property was turned over to iStar after previous property owner and former lead developer Philip Pilevsky defaulted on loans.
The city has attempted to develop the 6-acre blighted property between Long Beach and Riverside boulevards for the past 40 years, but has been hindered by litigation and failed proposals.
The Long Beach zoning board approved the high-rise towers last year, each 110 feet tall. The plans also call for a 11,000-square-foot retail promenade. Another condition of the settlement of the lawsuit was that Pilevsky, who owns a Long Beach movie theater on Long Beach Road, must reopen it. The theater has been closed for three years since flood damage from superstorm Sandy.
Long Beach passed a separate resolution last month as part of an agreement to receive $4 million in infrastructure and community benefit payments from iStar once the first of the two towers is built. Under that resolution, the city will receive $1 million placed in escrow and then receive an additional eight annual payments of $500,000 each to cover additional costs, including sewage treatment at the site.
Some residents and Nassau County Legis. Denise Ford spoke against the proposed PILOT during a Long Beach city council meeting last month.
Ford said the city would lose out on tax benefits under a PILOT while the value of the property is poised to appreciate. She said the project has been delayed and a PILOT was not proposed when it was approved by the city's zoning board last year.
"I'm not against PILOTs per se, but in this instance when you look at the property value now, you realize how much more the city can get in taxes immediately than 25 years from now," Ford said Monday.
The city has no control over the PILOT proposal before the IDA, Long Beach Corporation Counsel Rob Agostisi said.
"Under the IDA rules, there's nothing that requires city support or nonsupport to move forward," Agostisi said at a council meeting last month. "If iStar wants to apply for a tax abatement, that's their legal right. If iStar wants to offer public improvements, that's very difficult for the city to turn down."
The IDA will meet at 5 p.m. at the Nassau County Legislative Building, 1550 Franklin Ave., Suite 235, in Mineola.