A controversial tax break deal granted to the owner of...

A controversial tax break deal granted to the owner of Green Acres Mall was scrutinized by a State Senate committee. Credit: Jeff Bachner

A State Senate committee is recommending industrial development agencies give greater scrutiny to applications for tax breaks based on the controversy surrounding incentives awarded to Green Acres Mall by the Hempstead Town IDA.

The Committee on Investigations and Government Operations, in a 137-page report released Monday, said “too often projects fall significantly short of their benefit promises, distressing the economic welfare of local communities as was alleged” in the Green Acres Mall deal.

Green Acres was one of two IDA projects that the committee examined in depth; the other was a warehouse in upstate Orange County.

Green Acres' owner, Macerich, won tax breaks in 2014-15 for improvements to the shopping mall and construction of the adjacent strip plaza, Green Acres Commons. Homeowners’ property tax bills spiked for one year because one school district miscalculated the impact of the tax breaks. The problem was remedied the following year after loud protests.

The Senate committee endorsed the conclusion of State Comptroller Thomas DiNapoli that the Hempstead Town IDA wasn’t to blame for the inflated tax bills. The committee also praised the IDA’s unsuccessful attempt in 2017-18 to revoke the incentives after Macerich didn’t meet its employment commitments for construction jobs and retail jobs.

Still, the committee said the Hempstead Town IDA “neglected to properly investigate the proposed project” and approved the aid deal before a cost-benefit analysis had been completed. 

The committee, which is led by State Sen. James Skoufis (D-Newburgh), said the Green Acres case “demonstrates the need for all IDAs to properly and systematically track verifiable employment data on its own — and not be subject to the whims of an applicant’s, or it’s vendors’ reporting.” 

Public notification of pending IDA projects is necessary because no members of the public attended two public hearings about Green Acres prior to controversy erupting, the committee said.

A Hempstead IDA official said Monday, "We were vindicated by the state comptroller," which is one of two state regulators of IDAs.

State Sen. Todd Kaminsky (D-Long Beach), the sole Long Islander on the committee, said its nine-month investigation "shines light on the shadowy, backroom nature of some of these deals and sets forth a clear road map to ensure that this unique economic development tool is used to truly uplift our communities." 

Based on the Green Acres case, Kaminsky successfully sponsored legislation with Assemb. Michaelle Solages (D-Elmont), to require IDAs to livestream over the internet their board meetings and public hearings. Gov. Andrew M. Cuomo signed the bill into law and it goes into effect Jan. 1.

IDA supporters, such as the developers' group Association for a Better Long Island, said IDA tax incentives make economic development possible.

Kyle Strober, the association's executive director, said state lawmakers should apply the same rigor to school districts, which have "many more billions of dollars in annual spending compared to IDAs."

Ryan Silva, executive director of the New York State Economic Development Council, which represents IDAs in Albany, said they're already "among the most transparent and regulated public authorities" in the state.

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