Suffolk County Thursday approved tax breaks of close to $6 million for the planned $50 million purchase and renovation of a Forest Laboratories building in Commack.
Bethpage-based commercial developer Steel Equities applied to the county's Industrial Development Agency in November seeking aid for its conversion of Forest Labs' 420,000-square-foot former packaging facility into multi-tenant office space. Steel is buying the building at 500 Commack Rd. for $25 million and plans to spend another $25 million to renovate it.
After reviewing the developer's initial request, the IDA responded Thursday with a counteroffer.
Steel had asked the county for a 20-year payment in lieu of taxes (PILOT) agreement that would keep payments frozen at a reduced tax rate of $630,000 per year, or $1.50 per square foot, for the first five years, contingent on the project's ability to attract tenants with a total of 500 net new jobs. Payments would increase 2 percent each year following the first five.
The county voted instead to approve the project with a PILOT rate frozen at $803,620 per year, or $1.91 per square foot -- the property's current tax rate -- for the first five years, before increasing by 2 percent for the subsequent years.
"The board tried to provide a balance, recognizing all the various factors in their decision," said Anthony Catapano, executive director of the IDA.
In total, the IDA will provide the developer with about $2.2 million in a sales tax exemption, a mortgage recording tax exemption of $472,500 and the 20-year property tax abatement valued at about $3.3 million in savings.
"The building is going to be a challenge, but with the IDA's assistance we think we can make it a success," said Daniel Deegan, Steel's attorney with the Uniondale-based law firm Forchelli, Curto, Deegan, Schwartz, Mineo & Terrana.