Nassau County recaptures $170G in Aceto tax breaks
Aceto, seen on March 8, is liquidating its business. Credit: Newsday/J. Conrad Williams Jr.
Aceto Corp. has repaid $170,740 in tax breaks given it by Nassau County for a new headquarters in Port Washington, officials said.
The chemicals seller and generic drugs maker sent a check recently to the county’s Industrial Development Agency after selling its two divisions in bankruptcy court.
IDA chairman Richard Kessel said it got the funds through the U.S. Bankruptcy Court in Newark. “We have already received the money,” he said.
Aceto repaid $70,364 in property tax savings and $8,288 in mortgage-recording tax savings that it won from the IDA in 2010. The agency granted the incentives to keep the company from moving its Lake Success headquarters to Pennsylvania. Aceto instead relocated to 2 Tri Harbor Court in Port Washington.
Aceto also had to pay $92,088 in sales tax on the purchase of construction materials, equipment and furnishings for the office, which it didn’t pay initially under the IDA tax-breaks deal. And Kessel said Wednesday night the company claimed $71,388 more in sales-tax exemptions than it was granted, which happens rarely.
The headquarters project cost $7.8 million, according to Empire State Development, the state’s primary business-aid agency, which awarded a $489,000 grant to Aceto.
Kessel said the recaptured funds will be distributed to the affected school district, local governments and the state.
“You are always sorry to see a bankruptcy with a company that employs Long Islanders.” he said. “Having said that, it’s the IDA’s responsibility to recapture funds in instances like a bankruptcy, where benefits were paid and should go back to the people.”
In February, Aceto, which was founded 72 years ago, filed for Chapter 11 bankruptcy protection from its creditors, citing massive debt and mounting losses from its Rising Pharmaceuticals Inc. division in New Jersey. Recently, Rising was sold for $15 million to an India-based drugmaker and Aceto’s chemicals unit was sold for $422 million to the private equity firm New Mountain Capital in Manhattan.
On Tuesday Aceto announced plans to liquidate.
The company’s tax-break deal wasn’t due to expire until 2022. The IDA held title to Aceto’s 48,000-square-foot headquarters, a common practice to make sure companies receiving tax incentives keep their employment and investment promises. The company broke its pledges to the IDA by filing for bankruptcy.
Aceto’s property-tax savings totaled $146,617 over the four years ended Dec. 31, 2016, according to IDA reports filed with the state.
In return for the tax breaks, the public company promised to preserve 80 jobs in Port Washington with an average salary of $93,214 a year. The payroll peaked at 91 people in 2015 and fell to 80 in 2017, the reports show.
“We have made it clear in the bankruptcy proceeding that we would like to work with the successor company to see what we can do to keep them going and to keep those people employed,” Kessel said, referring to New Mountain Capital.
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.
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