The Village of East Hills has approved a new zoning district to allow Bethpage-based Steel Equities to move forward with plans to develop offices at the former Pall Corp. headquarters site.

The village board voted last month to rezone the property at 2200 Northern Blvd. from light industrial to a new "business park district."

Steel Equities intends to renovate and rent the 315,000 square feet of space to tenants including St. Francis Hospital, insurance giant MetLife Inc. and retail services provider Kliger-Weiss.

Steel Equities last month also received tax breaks for the project, including a 20-year property tax abatement from the Nassau County Industrial Development Agency.

But village officials and the Roslyn school district objected to the terms of the property tax abatement deal and the developer then agreed to make higher payments in lieu of taxes, said East Hills Mayor Michael Koblenz.

"They were looking for tax incentives and rebates and we weren't agreeing to any of that," Koblenz said Thursday. He said Steel Equities agreed to make $7.2 million more in payments -- 4 percent more each year for the first 17 years, compounded, then 5 percent more for the last three years.

"Considering there's a 2-percent cap" statewide, "it's a win-win for the village and the school district," Koblenz said.

Meryl Waxman Ben-Levy, president of the Roslyn schools Board of Education, said the district was "very pleased with the outcome and the resolution of this issue. We were able to protect our taxpayers while encouraging development and job creation in the county."

Joseph Kearney, executive director of the development agency, said the agency accepted Steel Equities' request to change the payment schedule. "If you want to pay more, that's fine with us," he said. The developer also received exemptions on the mortgage recording and sales tax.

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Home-building retailer Lowe's Inc. had paid about $40 million for the property, but could not overcome community opposition to a store at the site.