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IDA favors tax breaks to develop Nesconset small business hub 

This is an artist rendering from Developer O'Shea

This is an artist rendering from Developer O'Shea Properties proposing to construct three buildings on Lake Avenue South in Nesconset for use by 27 small industrial and service firms. Credit: O’Shea Properties

Nearly 30 small industrial and service companies would have room to grow in a $8.4 million project being proposed for Nesconset — but only if Suffolk County provides tax breaks, the developer said.

O’Shea Properties wants to construct three one-story buildings on a wooded lot at 104 Lake Avenue South. Each building would have space for about nine small businesses.

The 27 tenants, as a group, would employ 135 people, according to the developer. The rental units would range in size from 1,961 square feet to 2,738 and would come with a storefront office and garage door opening onto production and warehouse space.

"There is a clear void in the marketplace for this type of space," said Katie O. Rivas, director of leasing and development at family-owned O’Shea Properties. "When we opened Windsor Place, which is similar to [the Nesconset project] it took just three months to lease the 31 units — and we were in the middle of the pandemic."

The Windsor Place project is in Central Islip and was awarded 10 years of tax breaks by the Islip Town Industrial Development Agency in 2019. Windsor Place is expected to create 33 jobs, state records show.

Last week, Rivas told the Suffolk County IDA that O’Shea Properties has a list of 50 small businesses wanting to rent some of the 1 million square feet that it owns in the county.

The IDA board voted unanimously to grant preliminary approval for $910,610 in tax breaks for the Nesconset project, though two board members expressed skepticism.

Board member Brian Beedenbender, a businessman and former county legislator, questioned whether the tax aid is needed. "You’ve already bought the land … I think this gets built," he said. "I’m not sure who we are helping."

Board member Joshua Slaughter, an official with Local 66 of the Laborers’ union, agreed, adding, "If we don’t help, [the developer] would still be able to fill up the space."

IDA chairwoman Natalie Wright said the beneficiary of $512,520 in property-tax savings over 15 years will be the buildings’ tenants because they receive the tax bills, not Ronkonkoma-based O’Shea Properties.

Wright, who serves as Suffolk County Executive Steve Bellone's economic development commissioner, said the county wants to keep growing businesses but without sufficient space they could move to less expensive regions.

She said development of the vacant land would increase property-tax collections from $3,100 per year to $121,000. "There is a very large net revenue gain here for the county, the school district and other local governments," she said.

Rivas, the development company executive, said it would construct one large building on the site for use by a nationwide business if the tax breaks don’t receive final IDA approval.

"Due to high land, raw material and labor costs in New York State, the Suffolk County IDA’s assistance is necessary to make this project economically viable," she said.

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