Long Island drugmaker loses $400G in tax breaks after failing job pledge
P&L Development in Westbury said it was forced to trim staff at its 200 Hicks St. factory because of weakening demand for some products combined with increased labor costs. Credit: Newsday/James T. Madore
A drug manufacturer in Westbury will lose about $400,000 in tax breaks over eight years because the company cannot employ the number of people it had promised in return for the savings.
P & L Development was awarded tax incentives in 2013 by the Nassau County Industrial Development Agency. The company committed to having 480 workers at three facilities in Westbury by the end of last year — but only had 320, according to documents and interviews.
As a result, P & L and the IDA have agreed that the company's property tax savings will be reduced by about $50,000 this year and each of the next seven years.
Clients of IDAs are required to submit employment information annually per state law. If they fall below the promised number of jobs, IDAs can recapture some of the past benefits, reduce future benefits or take no action and see if the client comes back into compliance the following year.
P&L was forced to issue pink slips last year. The company supplies medicine, including cough and cold remedies, digestive products and analgesics to CVS, Walmart, Target, Costco and other retail chains.
Charles Cain, P & L’s chief administrative officer and general counsel, said the company laid off employees at its 200 Hicks St. factory because of “softening consumer demand” for some products combined with increased labor costs.
“We were forced to seek ways to reduce our overall cost structure at our Westbury facility to remain competitive and enable us to sustain our significant local workforce,” he told Newsday.
Cain added that "the employment situation has now stabilized" and P & L is committed to remaining in Nassau.
P & L, through its real estate attorney Andrew Komaromi, told the IDA in November it was unlikely to meet its employment commitment for 2025 and going forward. In a letter, the company proposed to reduce the commitment to a minimum of 320 jobs for the next eight years, and to save less on property taxes if there was no recapture of the aid already received. Newsday obtained the letter via state Freedom of Information Law.
In January, the IDA board voted unanimously to accept P & L’s proposal.
An agency spokesman said Tuesday the “exact amount” of additional property taxes to be paid is still being calculated. But the P & L attorney said, “it will be approximately $50,000 a year [and] escalating over time.”
If the IDA had pursued recapture, P & L would’ve had to repay some of the $2.4 million it saved between 2013 and 2024, including $2 million off property taxes, according to state records.
The tax incentives, along with state aid, were awarded about 15 years ago after P & L decided to expand in Nassau instead of Florida, where it still has two facilities.
At the time, P & L agreed to purchase and renovate 609-2 Cantiague Rock Rd. in Hicksville for $13 million. Two years ago, the building was rented to Queens-based drugmaker Epic Pharma LLC, which now employs 15 people there, according to the P & L letter.
The IDA awarded tax breaks in return for P & L initially promising to add 100 jobs to its 2013 workforce of 606 employees. Records show the company only met that commitment in 2017.
Sheldon L. Shrenkel, the IDA’s chief executive and executive director, said of the agency's response to the recent job cuts, “We want to work with the company, we want them to succeed.”
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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