Nassau County and Hempstead Village trustees may have an escape plan from a $10 million loan on a foreclosed downtown megablock.
Hempstead Village board members passed an intermunicipal agreement this past week that will write off outstanding taxes and debt once the county sells the property at 100 Main St.
Officials from both the village and county are looking to clear the burden of the former bus terminal that now houses a McDonald's, retail shops and largely vacant office space. The building also hosts the Hempstead school district's transition school for 150 students.
Nassau County has opened its second request for bid proposals for the purchase of the 117,648-square-foot building on a 1.5-acre property after the county turned down multiple bids last year without elaborating. It will solely decide any buyer.
Village officials said Nassau County reopened the RFP for new bidders about a month ago and has received two bids on the property, which are confidential.
Nassau County chief real estate negotiator and special counsel Kevin Walsh said he could not discuss the bidding process because no buyer has been awarded.
The defaulted property has cost Nassau County about $5.5 million in interest since 2002. It has cost the village Community Development Agency $6.4 million in annual payments of $580,000 since 2005.
Village officials are counting on the building to sell for at least $4 million to cover the remaining principal payments on a $10 million loan village officials and the CDA signed in 2001, guaranteed by Nassau County. Current village officials say it was a bad deal that strapped the CDA budget.
"We've been paying many years just enough to cover the mortgage. It's in everyone's best interest for this building to sell," Hempstead Deputy Mayor Luis Figueroa said. "Someone might purchase this building and relieve us of the burden and get a business there to start generating taxes."
The mutual agreement would pay off the loan with proceeds of the sale and write off remaining debts and taxes with Nassau County. Any additional profits from a sale would be split, with 57 percent going to the county and 43 percent to the village.
A federal $10 million loan was taken from the Department of Housing and Urban Development in 2001 when the county sold the building to Hempstead-based 100 Black Men LLC for public programs. The county and the Hempstead CDA co-signed the loan.
Nassau County started making interest payments in 2002 for $600,000 semiannually, but 100 Black Men failed to make any payments after 2005. Nassau County foreclosed on the property in December 2006.
The last estimate by a 2009 state audit showed 100 Black Men owing $4.2 million in delinquent real estate taxes. Representatives of the group could not be reached for comment.