RXR Glen Isle Partners won’t build the Garvies Point waterfront project in Glen Cove without tax breaks and a bond, a top company official said.
The company already is projecting lower profits than is typical for such developments, and a reduction in financial assistance would make it financially unviable, said Scott Rechler, chairman and CEO of Uniondale-based RXR Realty, majority owner of the partnership.
Some residents, City Council members and Nassau County legislators have criticized RXR and the administration of Mayor Reginald Spinello for agreeing to a bond projected to cost $283 million over 30 years, along with hundreds of millions of dollars in tax breaks for the project.
In June, two quasi-city agencies approved the tax breaks and bond, which would pay for public amenities and infrastructure such as parks, an esplanade and a road.
Project critics say a land development agreement requires RXR to pay for infrastructure, but Rechler and Spinello argue the agreement allows Glen Cove Industrial Development Agency financial assistance for it.
The money from the bond is not coming from the city treasury but from future revenue that wouldn’t exist without the construction of Garvies Point, Rechler said.
A study commissioned by the city estimates that the city, schools, library and Nassau County would receive nearly $332 million in revenue over 40 years from the project, after the costs of the bond and tax breaks.
RXR will help pay for public amenities and infrastructure, which will be constructed first, so even if the entire project is not built, residents would have additional parks, Rechler said.
Former Mayor Don DeRiggi said the bond means the city, schools, library and Nassau County are losing out on revenue.
“The money that should be coming to us, the residents, is going to pay off the bonds,” DeRiggi said.
Rechler said Garvies Point is more risky than most developments, partly because of its size. The project would include 1,110 condominiums and apartments, parks, stores, offices, marinas and other amenities. Rechler said he’s confident demand exists for the housing, but it’s unclear what prices the residential units will command, and lower-than-expected condo sale prices and apartment rents could cause RXR to lose money.
RXR expects to invest $302 million of its own money in Garvies Point and borrow more than $560 million, according to documents filed with the IDA.
Without the extensive financial assistance, “not only can we not move forward, but we can’t get lenders that are willing to move forward,” Rechler said. “Every public-private partnership needs some commitment from the public.”