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IDA may reassess tax breaks for Hempstead Village laundry

Employees of the FDR Services Corp., a commercial

Employees of the FDR Services Corp., a commercial laundry in Hempstead Village, protested on Feb. 20, 2018, alleged unfair labor practices. Credit: Howard Schnapp

A commercial laundry in Hempstead Village could lose hundreds of thousands of dollars in tax breaks that were preliminarily granted last month if the Hempstead Town Industrial Development Agency determines that the company inflated its employment, IDA officials said.

The tax incentives for FDR Services Corp. are in limbo as the IDA looks into how many people work for the laundry service following conflicting reports from the company and the union that represents some of its workers. The IDA has scheduled a special board meeting at 9 a.m. Tuesday at Hempstead Town Hall to investigate if the company has the 250 workers it has claimed.

“We don’t know how real anything was,” IDA board chairman Florestano Girardi said. “I think everybody was hoodwinked.”

FDR provides laundry services for hospitals and nursing homes. It has been in Hempstead — its corporate headquarters — for 27 years and has three other locations outside of Long Island.

Village Mayor Don Ryan called FDR’s operations a “major economic boon” and urged the agency to save the jobs.

The Laundry, Distribution and Food Service Joint Board union, which has filed complaints with the National Labor Relations Board against FDR, says the company employs about 160 union workers and roughly 20 managers.

FDR’s vice president, Jesse McCormack, affirmed the company’s 250-person employment figures and said a majority are in the union.

“We have north of 250 employees,” he said. “Everything you read from the union is not necessarily accurate.”

FDR said in its application for IDA assistance that it would move to Suffolk County if the agency didn’t approve tax breaks. In what IDA chief executive Fred Parola called an “extraordinary” move to save the jobs, the IDA agreed to lower the company’s taxes from $409,000 to $280,000 per year for the first three years of the 10-year deal. FDR’s payments would then increase incrementally.

FDR’s McCormack said the company sought IDA benefits “so that we can continue to operate and keep these jobs afloat.” The company also applied for IDA tax breaks in 2013 but the deal was never finalized.

Over the past year, the IDA has typically chosen to freeze a company’s current taxes for three years before steady increases over the next seven years. FDR’s exception was made, IDA officials said, to save the 250 jobs in the economically distressed village.

Parola and Girardi said the IDA was not aware of the labor board complaints and that the agencies are not required to investigate labor issues. McCormack said he believes the labor complaints will be resolved in favor of FDR.

“We’re going to go over every aspect of the case,” Girardi said.

On Feb. 14 — the day before the IDA’s unanimous vote for the tax breaks — more than 30 members of the employees’ union went on strike, union officials said.

The next day, nine of the strikers were laid off out of seniority, according to a complaint filed with the labor board.

“We were called into the office and we were told we didn’t have a job anymore,” said Adela Alberto, 59, of Hempstead Village, who has worked for the company for more than 25 years.

FDR’s McCormack also disputed the layoff allegations.

“Nobody was fired for going out on strike,” he said, noting that some workers who were “legally replaced” during the strike have already been rehired. “They have that right.”

IDA officials are also questioning the laundry’s statement that without IDA aid, it would move to Suffolk County.

McCormack said a potential Suffolk move is “100 percent real.”

With James T. Madore and Mark Morales

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