The Suffolk County Industrial Development Agency is mulling tax exemption requests by a California-based developer that wants to purchase and renovate a low-income senior apartment complex in Smithtown as part of an estimated $90 million project.
Suffolk IDA members plan to discuss a potential mortgage recording tax exemption and property tax abatements for Siena Village at a public meeting Thursday at the H. Lee Dennison Building in Hauppauge.
Siena Investors LLC, an affiliate of Sherman Oaks-based GHC Housing Partners, plans to purchase the Section 8 housing facility for $62 million from Catholic Health Services of Long Island. The 39.5-acre complex at 2000 Bishops Rd. consists of 20 buildings with 299 apartment units.dataSearch Suffolk County salaries
GHC is asking the IDA for $62.1 million in tax-exempt bonds, with the project's balance funded through tax credits and developer equity, said R.J. Miller, GHC's senior vice president of acquisitions and development. The company expects to spend another $9.25 million to renovate the site.
GHC Housing Partners owns more than 20,000 units of HUD-subsidized housing in 24 states, according to the application.
In March, the IDA granted preliminary approval of $487,313 in sales tax exemptions for project renovations and equipment purchases, said Anthony Catapano, Suffolk IDA executive director.
"The project is preserving the Section 8 affordable housing complex, so our board feels that is important," he said. "IDAs are able to provide assistance to rental and affordable housing projects. We do have the objective of promoting quality of life for residents, and economic welfare and employment opportunities. This is doing it in a different way."
But Suffolk County Legis. Robert Trotta (R-Fort Salonga) lambasted the IDA's consideration of real estate tax exemptions for the project, since the sale marks a change in ownership from a nonprofit company to a for-profit business. He also said the proposal does not create additional permanent jobs beyond the approximately 10 workers employed there.
"Why are we giving this multimillion-dollar company a tax break on the backs of the taxpayers?" Trotta said. "It's not the taxpayers' obligation to subsidize a private company and, in turn, artificially inflate the value of the property."
But Miller said the tax credit is not taking anything away from local residents. "It's actually bringing federal subsidy to the community for the benefit of the project and for the creation of construction jobs during the renovation period," he said. "If these credits and bonds are not used . . . it would go back to the state and it would go to support other projects."
Chris Hendriks, spokeswoman for Catholic Health Services, declined to comment on the tax exemption application, but confirmed the potential sale.
"Great care has been taken to ensure that the new owners will protect the nature and character of the Section 8, low-income senior housing facility status," she said in a statement. "Most important, St. Catherine of Siena has worked to ensure a seamless transition with no impact on the residents."
The deal may also be a boon to Smithtown's coffers. Supervisor Patrick Vecchio said the town has received $30,000 per year in payment in lieu of taxes (PILOT) since 1979 from the complex's owners -- first St. John's Episcopal Health Services, then in 2000, Catholic Health Services. Vecchio said he negotiated with GHC to increase Smithtown's PILOT to $75,000.