$43.6 million hotel project proposed for Jericho seeks IDA tax breaks

A hotel and conference center are being proposed for a parking lot off the Long Island Expressway in Jericho to help lure tenants to the adjacent Jericho Plaza and Jericho Quadrangle office complexes, officials said last week.

The $43.6 million project still must win approval from Oyster Bay Town but could reduce the office buildings’ vacancy rate, said Daniel P. Deegan, a real estate attorney for the hotel’s developers. He said there are 300,000 square feet of vacant space at Jericho Quadrangle and 100,000 at Jericho Plaza.

The hotel project, which includes a spa and restaurant along with meeting rooms, “would become an amenity that hopefully is an attraction for tenants to locate in the vacancies in the surrounding office buildings,” he told a meeting of the Nassau County Industrial Development Agency.

The seven-member IDA board voted unanimously on Dec. 12 to negotiate a tax-break deal with the developers. However, three members expressed concern about the projected salaries of hotel employees, saying they were low.

The 147,500-square-foot hotel would be built on six acres south of the two Jericho Plaza buildings, near the LIE. “It will be a high-end hotel unlike any other hotel that’s currently in Nassau County,” Deegan said, adding the hotel franchise is still being negotiated.

The hotel would have 150 to 180 rooms, a 10,000-square-foot conference center, a spa and a restaurant.

About 90 people would work at the hotel. Annual salaries would range from $65,000 for managers and $34,000 for housekeepers to $27,900 for bellmen, according to the developers' application for IDA aid.

IDA board member Anthony Simon, leader of the largest union representing Long Island Rail Road employees, called for the hotel employees to be paid union wages.

“I don’t know how he’s going to live in Nassau County making that number,” Simon said, referring to maintenance workers’ annual pay of $29,000.

Deegan replied that the salaries in the application “were industry averages,” not employee salaries for the proposed hotel.

IDA chairman Richard Kessel said there is a need for upscale hotels with meeting rooms.

He said the agency can only provide tax breaks if it uses a tourism exception to the state prohibition against tax incentives for retailers. “We need to make sure we have a study done about the tourism advantages of this particular project,” he said.

The developers are requesting a sales-tax exemption of up to $1.6 million on the purchase of construction materials and furnishings and up to $214,050 off the mortgage recording tax. They want a 20-year reduction on property taxes, according to the application.

The project is the brainchild of local hotel developer Paul Amoruso and Jericho Plaza’s owners. It comes after Oyster Bay approved construction of a third office building on the property in 2009. That building didn’t happen because of weak demand for office space.

Amoruso called the hotel plan “so preliminary” and subject to the approval of Oyster Bay officials.

Amoruso’s project is less than one mile from a proposed Marriott Residence Inn near the historic Milleridge Inn, also in Jericho. Developers of the Marriott hotel  have faced vocal opposition from some homeowners.

By James T. Madore

james.madore@newsday.comJamesTMadore

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.