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Tax breaks sought on Grumman Studios and its planned sister facility

Grumman Studios wants more tax breaks so it

Grumman Studios wants more tax breaks so it can continue offering rates to film companies that beat those offered in New York City. The company is also seeking breaks for a planned Port Washington studio.  Credit: John Dunn

Grumman Studios in Bethpage, where movies such as “The Amazing Spider-Man 2” and “The Avengers” were filmed, is seeking to increase the number of years that it receives property-tax breaks from Nassau County, officials said.

Studios owner Parviz Farahzad wants to extend through 2035, or eight years, the tax incentives that are set to expire in 2027. The county’s Industrial Development Agency agreed last week to consider the request. 

Farahzad was first awarded property-tax breaks in 2007 to rehabilitate the former Grumman Corp. building where the Lunar Module was built in the 1960s and 1970s. In 2009, he decided to construct seven soundstages for film and television production in about 400,000 square feet of space.

The existing incentives are for 20 years and represent a substantial tax savings, according to IDA records.

The full property taxes on the Bethpage studios totaled nearly $4 million between 2012 and 2016. With tax breaks, the studios paid only $596,340 over the five-year period, saving about $3 million, or 85 percent, the records show. IDA records are incomplete for 2017 and last year.

Daniel P. Deegan, the studios’ real estate attorney, said Wednesday its payments in lieu of taxes, or PILOTs, were more than the county, town and school district had received in decades because 500 Grumman Rd. W. was off the tax rolls from 1947 to 2007. The property, which was environmentally contaminated, was owned by the U.S. Navy and then the county.

Grumman Studios needs the additional tax breaks “to continue offering rental rates to film and production companies that are significantly less than the rates at competing film studios in New York City,” he said. Production companies “would prefer to stay in the city. There has to be an incentive for them to come out to Long Island.”

Deegan said Grumman Studios’ owner “is constantly putting money into the building” even though he hasn’t committed to more improvements in return for additional tax breaks, according to his application for IDA aid.

However, the owner has proposed to spend $15 million on transforming the former Publishers Clearing House headquarters in Port Washington North into a sister facility to Grumman Studios. He is seeking tax breaks for that facility as well.

The project involves raising the roof on a 100,000-square-foot building to 65 feet for six soundstages and conversion of a 60,000-square-foot building to offices and storage. Both are located at 101 Channel Dr. in Port Washington North, which he purchased for $7.3 million in 2014.

Publishers Clearing House moved to Jericho.

Grumman Studios wants a 15-year property-tax break for the Port Washington North studios. That incentive package would end at the same time as the proposed extension of incentives for the Bethpage studios.

“The film studio business, economically, is very advantageous to Nassau County,” Deegan told an IDA meeting last week. “The economic activity in terms of building sets, in terms of food purchases and lodging is tremendous. Many of the film workers live here on Long Island,” he said.

Deegan also said Grumman Studios is seeking permission to use the Bethpage facility for events and exhibitions when film crews aren’t there.

IDA chairman Richard Kessel said he and County Executive Laura Curran have lobbied for a state grant for the Port Washington North studios. The Long Island Regional Economic Development Council, a state panel, made a funding recommendation to Albany, though the amount wasn’t disclosed.

IDA board member John Coumatos, who lives in Bethpage and owns a restaurant there, said Grumman Studios has been a boon to the village. He said Bethpage had been “decimated” by the downsizing of Northrop Grumman Corp. in the mid-1990s. “The studio is great,” he said.

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