Hampton Inn proposed for downtown Huntington wins more tax breaks
The Huntington Town Hall will be replaced by Hampton Inn & Suites, which will now save 48% off its property taxes over 15 years. Credit: Newsday/Steve Pfost
The Hampton Inn & Suites proposed for the Old Huntington Town Hall would save an additional $1.2 million in property taxes over 15 years under a deal approved Thursday.
The Suffolk County Industrial Development Agency agreed unanimously to increase the property-tax savings to $2.3 million over the period for Huntington Village Hotel Partners LLC. The agency’s board was responding to the developer’s request for more help because banks are reluctant to lend to hotels and other tourism businesses hit by the coronavirus pandemic.
Records show the 80-room hotel would now save 48% off its property taxes over 15 years instead of 33%.
About half the savings, $610,000, would come from a change in the property’s assessment. The other half would derive from significantly smaller payments-in-lieu of taxes, or PILOT payments, in the first five years of the IDA tax deal, records show.
The IDA board gave preliminary approval for the $24 million hotel in February, but a required public hearing had to be canceled due to the virus.
IDA executive director Anthony J. Catapano said Thursday a virtual public hearing about the tax incentive package will be held soon, and the IDA board could grant final approval next month.
Without the additional tax breaks, the hotel project likely would be stalled until the coronavirus-induced recession ends because “financing isn’t available today in the way it was before the pandemic. Banks are only willing to finance a lower percentage of the construction costs,” he said after the IDA meeting.
Rendering of the Huntington Village Hotel Credit: Courtesy of Huntington Village Hotel Partners LLC.
Developer George Tsunis agreed, saying, “I’m a very proud individual and it’s quite difficult, if not embarrassing, to come to ask for additional assistance. The reality is there is zero new hotel-construction financing available today. The [hotel] industry has been more decimated than any other industry due to COVID," he said.
Tsunis, who runs nine hotels as CEO of Chartwell Hotels, said it would take time for hotel vacancy rates to decline but there’s still a vibrant market for a hotel in Huntington village that serves business travels and tourists.
The Hampton Inn will encompass the 1910 town hall at 227 Main St. and adjacent property. The town hall building will be converted to the hotel’s lobby, breakfast room and gym. A 53,636-square-foot addition will house the guest rooms.
Tsunis on Tuesday reaffirmed his and his partners’ commitment to create 14 jobs with an average salary of $39,700 per year.
Besides the property tax reduction, the IDA granted the hotel project a sales-tax exemption of up to $825,814 on the purchase of construction materials and furnishings, and up to $90,881 off the mortgage recording tax.
IDA chair Natalie Wright, who also serves as Suffolk's economic development commissioner, said the tourism industry is a key driver of Long Island’s economy.
“It is imperative that the Huntington hotel project remains viable as it will not only renovate a historic, yet blighted, part of Huntington's downtown, but will play a key role in attracting visitors to the area,” she said.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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