The Babylon Industrial Development Agency has approved a request from a Deer Park outlet center for a tax abatement extension that local school officials said will financially burden the district in coming years.
The seven-member IDA board, chaired by former Suffolk County Executive Patrick Halpin, unanimously approved the request last week. Deer Park Enterprise Llc, owner of Tanger Outlets at the Arches, had asked the IDA to extend a 15-year tax abatement deal by another eight years.
The original agreement called for an initial 60 percent cut in taxes, with an annual 6 percent increase until full taxation was reached. The extension will slow down the increase to 2 percent per year.
David Blumenfeld of Syosset-based Blumenfeld Development Group Ltd., a partner in Deer Park Enterprise, said the slowdown was needed because the center is only 78 percent full, and 20 of its 100 businesses will soon renegotiate leases. He said the original abatement deal, which is actually an annual increase of the center's assessed value, resulted in the company paying nearly 20 percent in taxes this year.
IDA head Robert Stricoff stressed that the abatement modification is "not an additional tax break" and that "all taxing jurisdictions will not see a decrease" in next year's tax revenue. "This modification will allow for an additional $26 million capital investment into the center and the hiring of some 300 new employees to add to the already 900 full-time employees, many of which are town residents," he said.
The extension also means less money than originally projected for Deer Park's school district -- a total of $482,000 less over the next two years, and more in ensuing years.
In a statement, Superintendent Eva Demyen wrote that she understood the necessity of the modification and is grateful for the "scholarships, contributions toward school improvements and community service" Tanger has provided. However, she wrote, "the timing of reduction . . . is a burden considering the uncertainty of our state aid and the mandated tax levy cap."
Blumenfeld said the reduction shouldn't hurt the district because "their operating budgets are not going to increase at the rate the taxes were increasing."
But Demyen stated the district planned on that money. She wrote, "We have used the original abatement percentages for our financial projections over the next few years and with our budget season upon us, adjustments will need to be made in order to make up for the reduction."
The district has not decided how to do that, Demyen stated.
Stricoff did not respond to a request for comment on the school district.