Developer Bruce Ratner is seeking nearly $6.2 million in tax breaks from the Nassau County Industrial Development Agency to build a retail and entertainment complex next to the Nassau Coliseum, according to documents obtained by Newsday.
Ratner, who expects to begin work on the 188,000-square-foot plaza next month, wants $4.92 million in sales tax exemptions during the construction period to help pay for materials, according to a June 13 application to the IDA. He received $4.4 million in tax breaks last year to renovate the arena.
Nassau Events Center LLC, the entity formed for the Coliseum project, still would be required to pay property taxes on the plaza after its scheduled opening in July 2018, according to IDA executive director Joseph Kearney.
The arena is tax-exempt because it is owned by Nassau County and used for public purposes.
Ratner also wants a $1.26 million reduction in mortgage recording taxes on the plaza. Nassau imposes a tax of 1.05 percent on the mortgage value on commercial properties.
In his application for IDA assistance, and in his 2013 lease agreement with the county, Ratner said he would not undertake the project without the agency’s involvement.
“Financial assistance on this project is necessary to help the applicant control the costs of construction and operating the project and attract the high-end entertainment uses that will transform the aging and obsolete site into Long Island’s premier entertainment destination,” the application states.
Kearney said the application review typically takes 45 to 60 days. “We look forward to doing our part to see that the Coliseum redevelopment comes to fruition,” he said.
The retail and entertainment project is forecast to generate nearly $64 million in annual sales tax revenue to the county, the application states. Ratner’s lease with Nassau also requires him to make annual payments to the county totaling at least $195 million over 34 years, with the $4.4 million annual minimum payment rising by 10 percent every five years.
Nassau County Executive Edward Mangano said the “Hub property is undergoing an exciting transformation with the Coliseum under construction, a planned Memorial Sloan Kettering Cancer Center, and potential bioelectronics center. This small portion of the project promises to provide additional destination amenities.”
Last July, the IDA approved $3.37 million in sales tax exemptions to renovate the arena and $1.1 million in mortgage tax relief. The $100 million Coliseum renovation began in November and the arena is expected to reopen in March 2017.
In October, Mikhail Prokhorov, owner of the Brooklyn Nets, purchased a controlling stake in Nassau Events Center. Ratner maintained a 15 percent ownership in NEC and remains the lead developer on the project.
The IDA application provides new details on the 11-acre retail plaza.
Among the prospective tenants would be an indoor skydiving facility, where visitors are elevated through the air in a vertical wind tunnel. A similar facility is open in Yonkers. The plaza also includes retail stores, restaurants, a movie theater, a live music theater and other entertainment options.
NEC is also considering an additional 200,000 square feet of retail to “complement the entertainment experience the Coliseum and plaza will bring to Nassau County,” according to the application.
The retail plaza would create more than 500 construction jobs, according to the application. Ratner agreed to use union labor to renovate the Coliseum and the construction of the exterior of the retail complex. But the contract does not mandate use of union labor for the interior construction, such as electrical and plumbing work.
Richard O’Kane, president of the Nassau-Suffolk Building and Construction Trades Council, said Ratner should use union labor for the entire project if he accepts IDA funds. “Otherwise, we would certainly have a problem,” O’Kane said.
Ratner spokeswoman Ashley Cotton said NEC would use union labor for the interior construction if Ratner performs the work. But if a third-party retailer takes over the construction, unions would need to bid on the work, she said.
In its first year of operations, the plaza would employ 189 people, earning average wages of $36,723, including benefits, according to the application. The plaza would have 252 employees by 2019.
Ratner said the cost to build the retail plaza would exceed $165 million, including $55.4 million for materials, $57 million for labor and $23.9 million in additional fees. The developer is seeking $120 million in mortgage loan financing to pay for the project while the remaining $45 million would come from equity, the application states.
Ratner told the IDA he has spent $8 million in predevelopment activities for the plaza.
The application comes as Ratner is engaged in a legal battle with Syosset-based Blumenfeld Development Group over control of the retail plaza.
Blumenfeld and Forest City Ratner Cos. were among four companies that bid on the redevelopment of the Coliseum and its surrounding property in 2013. After Nassau settled on Forest City and the Madison Square Garden Company as finalists, Blumenfeld signed onto Ratner’s proposal, agreeing to develop the retail and restaurant components.
But the developers clashed on the vision for the property, leading to dueling lawsuits.
Ratner charged that Blumenfeld attempted to make “unilateral changes to the site plan.” Blumenfeld said the firms were partners and accused Ratner of “misleading accusations.”
In February, a State Supreme Court justice denied Ratner’s request to dismiss the suit, allowing the case to proceed. Blumenfeld attorney Ron Rosenberg said the case does not prevent Ratner from beginning construction of the retail plaza.