41° Good Afternoon
41° Good Afternoon

Long Beach developers seek $109M in tax breaks

The proposed site of the Long Beach Superblock

The proposed site of the Long Beach Superblock between Long Beach and Riverside boulevards on Jan. 1, 2016. Photo Credit: Barry Sloan

Developers behind the Long Beach Superblock have submitted a new proposal seeking $109 million in tax breaks for 20 years to build two luxury boardwalk apartment buildings.

Manhattan developer IStar Financial, with Plainview-based contractor E.W. Howell, are planning to invest $336.1 million to build a pair of 17-story towers along the Long Beach boardwalk between Long Beach and Riverside boulevards.

Developers said they cannot build the project without a tax exemption by the Nassau County Industrial Development Agency. A new proposal was submitted last month after their initial proposal for $129 million in tax breaks over 25 years was rejected by the IDA board.

The new proposal will be presented during an IDA public hearing at 6:30 p.m. Feb. 24 at Long Beach City Hall. The new application asks for $99.58 million in property tax exemptions, $2.5 million in mortgage recording tax exemptions and $7.48 million in sales tax relief.

Long Beach and Nassau County residents packed a June hearing to criticize the initial proposal as too much of a tax break for developers. Nassau County IDA officials said they considered the unprecedented public response to the project and economic value in denying the project.

“This was one of the most thoroughly reviewed and intensely vetted applications we’ve undertaken,” IDA Executive Director Joseph J. Kearney said. “We are now awaiting for it to be submitted for the community’s input.”

IStar purchased the vacant six-acre parcel for $53.99 million in 2009. If approved, the developer will use about $235 million in bank financing and about $100 million in equity for the construction.

The proposal would add 522 luxury waterfront apartments in the pair of 110-foot towers. The bottom two stories would include underground parking and 11,000 square-feet of retail space off the boardwalk.

Developers said they would spend $110 million on labor with 2,200 construction jobs and 450 permanent jobs with average wages of $30,000 to $45,000.

Developers project the completed site could create $119 million in new economic activity for Long Beach and $4.8 million in new sales tax for Nassau County. If the project is approved, work could begin by April and be completed by April 2019.

“There will be people who feel this is a large compromise made by the client and there will be people opposed to anything at anytime,” said IStar’s Uniondale-based attorney Peter Curry. “This is a significant change in response to the last public hearing and meets the needs of the applicant and the community. It’s a great benefit effectively taking a property essentially abandoned for 30 years and everyone knows the economic effect is enormous.”

The property has remained vacant and tied to litigation for decades until a legal settlement with the City of Long Beach in 2014. As part of the settlement, the Long Beach City Council endorsed a development with a PILOT, or payment in lieu of taxes, but did not offer any input on the specifications.

The City Council has remained neutral out of concern the city could face liability if the project fails, City Council members said. The city would receive the first portion of a $4 million community development payment from IStar once the first tower is built.

More news