An economic analysis of the proposed Long Beach Superblock development has concluded that it would create $4.7 million in new revenue for Nassau County and $35 million in tax payments over the next 20 years.
The cost-benefit analysis was commissioned by the Nassau County Industrial Development Agency ahead of its May 25 vote on an application by Manhattan-based iStar Financial, which estimated $109 million in tax exemptions would be needed for the firm to build two 15-floor apartment towers overlooking the Long Beach boardwalk.
The IDA paid Saratoga Springs-based Camoin Associates $25,500 to study the costs and benefits from the project to Nassau County, Long Beach and the Long Beach school district.
The report offers no recommendation to the IDA, but may provide a road map if IDA board members decide to approve the exemptions at its May 25 meeting in Mineola.
Last year, the IDA rejected an application by iStar seeking a 25-year, $129 million tax break known as a PILOT — payment in lieu of taxes.
Developers plan to spend $336 million to construct 522 luxury apartments, two floors of below-ground parking and 11,500 square feet of retail space on the ground level adjacent to the boardwalk.
Officials with IStar have said the project cannot be built without Nassau County assistance and a PILOT.
Developers have negotiated to pay a total of $35.5 million to all the county, city and schools over 20 years if the tax break is approved..
The 45-page cost-benefit analysis states that the project would generate $17.9 million more in property taxes with the tax break than the $17.5 million the property would generate if it remains vacant.
“In other words, the PILOT represents a property tax benefit to the affected tax jurisdictions averaging $896,062 per year,” the report states.
Nassau County’s benefits would include $2.2 million in property tax payments, $2.9 million in sales tax revenue and $2.5 in other revenues and assessments from the development, offset by $2.9 million in expenses.
Nassau County Executive Edward Mangano opposed the exemption ahead of a February public hearing. County spokesman Brian Nevin said his administration was still reviewing the economic report.
The Long Beach City Council has endorsed building the project, but has remained neutral regarding specific tax breaks.
“I look forward to reviewing the completed economic analysis that the City administration demanded from the Nassau County IDA,” City Councilman Anthony Eramo said.
The project would generate $8.1 million in new revenue for Long Beach schools and $244,785 for the city of Long Beach, according to the study. Long Beach stands to gain a $3.7 million community benefit payment starting when the first tower is finished.
Not including the community benefit payment, Long Beach would begin gaining revenue in the final two years of the project, when the city is projected to gain $2.6 million. The school district would begin gaining revenue starting in the sixth year after construction has begun.
Analysts estimate the project would create 680 new construction jobs and 571 other jobs in Nassau County while the towers are built, estimated to pay workers $118.5 million during that time.
The tax exemptions include about $7.5 million in sales tax exemptions, but the report estimated a greater cost to residents if the complex isn’t built “since no future revenue stream would exist without the exemptions. ”