A Manhattan developer planning the Superblock beachfront apartment project in Long Beach said it cannot move forward without a 25-year tax exemption from Nassau County.
The Nassau County Industrial Development Agency gave preliminary approval Wednesday to conduct an economic analysis and review of iStar Financial's plans to build two 15-story towers, including 522 luxury apartments, underground parking and 11,000 square feet of retail space on the boardwalk between Long Beach and Riverside boulevards.
Karl Frey, iStar vice president, said if the IDA approves the requested 25-year PILOT, or payment in lieu of taxes, work on the project could begin this summer. The first tower could be completed by the end of 2017, when Long Beach would start to receive a $4 million infrastructure payment from iStar.
The proposed tax credit would require iStar to pay at least the $500,000 annual property taxes for the life of the PILOT. The company estimates the taxes could increase to $9 million by the 26th year.
The developer and its partner, AvalonBay Communities, are planning to invest about $300 million in the project, Frey said. He said the proposed PILOT is in line with other tax exemptions granted in Nassau County
"It's impossible to bring it out of the ground without the county's financial assistance. It's basic math," Frey said.
Long Beach officials and the city's Zoning Board of Appeals approved the project last year.
The city also is giving iStar a mortgage recording tax exemption while iStar asks for the PILOT and a sales tax exemption from the IDA.
Plans for the two 110-foot towers are poised to move forward after about 40 years of failed proposals and litigation from other developers left the 6-acre blighted property vacant, Frey said. The developers, known as Long Beach Wayfarer LLC, plan to spend $220 million during the next three years.
"There's no question the Superblock is an unpolished gem in Long Beach," Frey said.
About 2,220 construction jobs and 450 permanent jobs would be created by the project, with a total payroll of about $109 million, Frey said.
The developers estimate it would create $119 million of new economic activity for Long Beach and $4.8 million in sales tax for Nassau County.
The developers are required to hold a public hearing in Long Beach, tentatively set for May 27, before the PILOT is approved.