Doing business on Long Island isn't cheap. Often, to attract out-of-state companies or retain those thinking of heading to less costly locales, government entities will provide tax breaks that drastically bring down the cost of doing business. These benefits are typically tied to the firm remaining on Long Island and creating jobs. While these tax breaks often help stimulate the local company, even the promise of a reduced tax bill and better bottom line isn't enough to keep some companies in Nassau or Suffolk. Here are seven times companies received government aid and left anyway.
First Data Corp.
Despite receiving $3.28 million in tax breaks from the Suffolk County Industrial Development Agency over a 10-year period in 2003, credit-card processing company First Data Corp. in May 2015 announced it would be closing its Melville office and opening "a large, new office east of Manhattan." Company officials said hundreds of jobs located in Melville would be relocated to Long Island City, Queens, as a result of the move.
Goya Foods Inc. received $9.5 million in bond financing from the Nassau County Industrial Development Agency in 1998 and $200,000 in loans and grants from New York state for its major distribution center in Bethpage. The Secaucus, N.J.-based company announced in April 2015, however, that it would be moving its Long Island operations closer to home in Jersey City, N.J. Fifty-seven workers were affected by the decision.
In June 2012, the Babylon Industrial Development Agency agreed to reduce the property tax bill of NBTY Inc.'s Amityville manufacturing operation by 60 percent for 15 years. In exchange, the Ronkonkoma-based vitamin and food supplement maker promised to create 200 new jobs, which it made good on. Three years later, however, in May 2015, NBTY announced it would be shuttering its Amityville location and eliminating 214 jobs. It was also approved for a $750,000 grant from New York state's Empire State Development, although that aid was never delivered.
After cutting its workforce by more than 90 percent over three decades, Northrop Grumman Corp. announced on March 4, 2013, that it would be moving 850 jobs off Long Island, leaving just 550 workers at its Bethpage facility. That same manufacturing plant was slated to receive $3 million in grants and tax breaks over a 10-year period from New York state in 2011 in exchange for pledging to maintain its 1,500 employees on Long Island, although the company cut its staff before those benefits could be delivered.
At one time, OSI Pharmaceuticals was seen as a golden vision of what Long Island's biotech landscape could become. That all came to an end on May 13, 2013, when OSI's Japanese parent company Astellas Pharma Inc. announced it would be pulling up all local stakes and eliminating 115 jobs in the process. OSI had received $750,222 in sales tax breaks from the Suffolk County Industrial Development Agency to facilitate the company's growth at Farmingdale's Broad Hollow Bioscience Park. All of the tax breaks were repaid.
Economic development officials touted a big win for Long Island when Brooklyn-based Reiko Wireless agreed in 2014 to move from Brooklyn to Central Islip, bringing with it the promise to create 68 new jobs in exchange for $36,750 in mortgage recording tax abatements and a 14-year property tax break. The firm never came, however, and the Islip Industrial Development Agency was forced to take measures to recoup the money it had given to Reiko Wireless.
Spellman High Voltage Electronics
Spellman High Voltage Electronics, a maker of printed circuits, was offered $32,345 in sales tax breaks by the Suffolk County Industrial Development Agency to boost jobs at its Hauppauge and Bohemia locations in 2012. Instead of creating jobs, Spellman announced in November 2013 that it would be laying off 47 workers and moving the jobs to Mexico. Spellman subsequently closed its entire Bohemia operation, moving the work to Mexico as well.