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Life Storage gets OK to cut job promise without losing tax break

The Life Storage Inc. facility in Hicksville, seen

The Life Storage Inc. facility in Hicksville, seen on Monday. The change agreed to by the IDA represents fewer employees than were working at the self-storage location when it was purchased by Buffalo-based Life Storage in 2013 and won tax breaks, records show.  Credit: Randee Daddona

A self-storage company has received permission to reduce its job commitment in Hicksville without a reduction in its tax breaks from Nassau County.

Life Storage Inc. had requested a change in its 15-year incentive agreement with the county’s Industrial Development Agency to cut promised employment to three full-time equivalent positions from 3.5 through 2028, when the agreement ends.

The workers earn, on average, $33,836 per year, and as recently as 2016 the public company’s property-tax savings totaled $90,436, according to records obtained under the Freedom of Information Act.

Life Storage, which is based in Buffalo, reported a profit of $208 million in 2018 on revenue of $551 million.

The change agreed to by the IDA represents fewer employees than were working in the self-storage facility at 65 West John St. when it was purchased by Life Storage in 2013 and won tax breaks, the records show.

The company sought to reduce its Hicksville payroll “based on changing business operations,” its senior vice president of human resources Kate White said Tuesday. “We appreciate the support of the Nassau IDA and look forward to continuing to do business in the Hicksville community.”

The IDA board in November unanimously approved lowering the company’s job commitment, though some members expressed their disappointment.

IDAs’ practice of granting tax breaks to self-storage facilities, as the Nassau IDA did under then-County Executive Edward Mangano, has been criticized by homeowners and good-government groups. They have said that such awards violate the state law prohibiting retailers from receiving IDA aid, and that self-storage locations employ too few people.

Nassau IDA chairman Richard Kessel acknowledged on Tuesday the unpopularity of tax incentives for self-storage businesses, saying the agency no longer considers such deals.

“This was not approved by the current board,” he said, referring to the Life Storage project. “We do have a policy that we adopted against doing self-storage facilities because they don’t produce enough jobs.”

Asked if the IDA considered reducing Life Storage's tax breaks, Kessel said: “We didn’t discuss that. We would have been quibbling over a half job and I was concerned about setting a precedent of altering the prior [Mangano] IDA’s projects. We don’t want to blow up those projects,” he said.

Life Storage, in seeking permission to employ less people, said the four-story Hicksville facility isn’t busy enough to justify a workforce of 3.5 full-time equivalents.

Melissa R. Zizzo, the company’s legal real estate manager, said its Hicksville location averages about one move-in per day and one move-out, “equating to [a] maximum of 20 minutes of staff time, which includes refreshing the space for re-rental.”

She said in a September letter to the IDA that most of Life Storage’s 850 facilities in 29 states have two employees and aren’t open for as many hours as Hicksville.

Records show the Hicksville self-storage operation increased its workforce from 3.5 people in 2013 to four in 2014 and six in 2016 and 2017. There were two employees in 2015 and three in 2018, which were violations of the tax-break deal and led the company to request the amendment, according to an IDA attorney.

IDA board member Timothy Williams, who was chairman when many of the self-storage deals were approved, said Life Storage should have known when it applied for help seven years ago that it only needed three employees in Hicksville. He also said the IDA should charge a fee for the amendment.

The IDA attorney said the usual $1,000 amendment fee was paid by the company, which used to be called Sovran.

Life Storage also receives tax breaks for its facilities in Amityville, Deer Park and Lindenhurst from the Babylon Town IDA. The company has committed to having one employee in each of those locations, records show.

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