Proposed Hicksville storage facility for small businesses wins $1.6 million in tax breaks

A divided Nassau County Industrial Development Agency board has voted to grant $1.6 million in tax breaks to a proposed self-storage warehouse in Hicksville for use by contractors and other small businesses.

In a 5-0 vote with one abstention earlier this month, the board backed the $19.2 million project from real estate developer Vault Equities. The proposal involves the construction of three-story, 108,000-square-foot building on a lot that's been vacant for more than 30 years.

But even with the tax relief, Huntington-based Vault will pay more to the school district and other local governments than the $144,405 that they now receive annually, according to the application for IDA assistance. Agency records, though, show the developer will save about $1 million in property taxes over 15 years.

IDA board member Reginald Spinello, a former Glen Cove mayor, said warehouse projects, like the one proposed for Hicksville, don't deserve many years of property tax savings because they create just a few jobs.

"This is taxpayer money that we're giving you. ... Taxpayer money demands community benefit and I don't see a real community benefit here," Spinello said at the March 12 board meeting before abstaining on the approving resolution vote.

"I want to see some businesses opening up and some jobs and some real [economic] stimulus — then we're doing something with the taxpayer money," he said.

The warehouse will have one full-time employee, earning $90,000 per year, and two part-time employees, each earning $11,100 per year, the application states.

The other IDA board members didn't respond to Spinello's comments during the meeting.

Afterward, agency chairman William Rockensies told Newsday, "The small businesses that rent space in this warehouse to store their equipment and supplies will grow and will hire more people."

It's been rare since 2019 for Nassau IDA board members to abstain from voting on tax-break deals.

Notable examples include additional help for the bankrupt Harborside retirement community in Port Washington and a distribution facility in Syosset for Nestlé Waters North America Inc. Records show the abstentions weren't enough to stop the incentives from being approved for the projects.

Dan Baker, Vault's real estate attorney, said last week his client needs the tax savings to secure financing.

"Lenders want to make sure the numbers are sufficient to allow the project to be built and then to grow into itself, that they can catch up to all of the costs of development through relief in the real estate taxes," he said in an interview.

Baker and others noted the Hicksville warehouse at 350 South Broadway will increase the property's value because now it's only being used to store landscaping vehicles and equipment and heavy trucks.

The warehouse would be divided into climate-controlled storage units for rent, according to the IDA application.

Besides the property tax savings, Vault was granted a sales-tax exemption of up to $544,253 on the purchase of construction materials, equipment and furnishing, plus up to $90,000 off the mortgage-recording tax, IDA documents show.

By James T. Madore

james.madore@newsday.comJamesTMadore

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.