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Long IslandColumnistsJoye Brown

Development agencies’ questionable moves

Fred Parola, head of the Hempstead IDA ,

Fred Parola, head of the Hempstead IDA , listens during a meeting to approve a tax exemption for developers to build apartment buildings in the Hempstead Downtown revitalization on Thursday, May 12, 2016 in Hempstead. Photo Credit: Howard Schnapp

A recent spate of deals by Nassau’s Industrial Development Agency — along with the handling of a separate arrangement by Hempstead’s — are causing dust-ups that undermine the good such agencies can do.

Last week came word that Nassau’s IDA had given tax breaks for a proposed self-storage facility on two parcels in Valley Stream, the latest in a series of breaks the IDA has given to such businesses.

First up, a storage facility is a retail operation. That is, it sells something — in this case, storage — to customers.

Granting deals to retail operations is supposed to be a no-no under state law. The county IDA, whose mission is to facilitate economic development, justified the deal by citing a need for storage facilities, especially for older Long Islanders swapping their one-family homes for smaller quarters.

The IDA also notes that the deal will create jobs.

How many?

Well, that would be two.

Which would pay, on average, $45,000 a year each, excluding medical and retirement benefits.

What will the company, Atlanta-based Safeguard, receive in return?

The IDA agreed to a sales-tax exemption of as much as $418,528 for the purchase of construction materials, fixtures and equipment. And the agency granted a deal that freezes the company’s property tax rate for five years — and follows that up with increases of 1.66 percent in each in the next five years; and 2 percent increases in the final five years.

But what’s happening with storage facilities in Valley Stream pales in comparison with a decision by the Hempstead Town IDA two years ago to remove Green Acres Mall from the tax rolls.

Under the deal, meant to boost redevelopment of the mall and adjacent property in Valley Stream, the mall’s owners are paying reduced taxes, in the form of payments in lieu of taxes, commonly known as PILOTS.

Sounds like the kind of economic stimulus IDAs — which, by the way, are agencies that operate independently of government — should be backing, yes? But, as tax bills mailed to Nassau residents beginning last week show, the mall’s reduction is raising taxes for everyone else, especially in Valley Stream school districts.

Under terms the Santa Monica-based Macerich company reached with Hempstead’s IDA, the firm received a $6 million sales tax exemption, an exemption from paying mortgage-receiving taxes and an agreement for a PILOT on the company’s planned $79 million renovation.

The mall qualified as a tourist destination — because at least 51 percent of its business comes from Queens — which allowed it to receive help from the IDA.

But, for taxpayers, that help comes at a cost, which is why in the Town of Hempstead and Valley Stream School District 30 officials now are crying foul.

Hempstead Town also has asked the IDA to reconsider the tax breaks.

And as for taxpayers? They are stunned at the unexpectedly high boost in taxes — which will cost District 30 homeowners as much as $1,000 more.

Hempstead IDA head Fred Parola couldn’t be reached for his take on the brouhaha on Friday.

But he, like Nassau IDA executive director Joseph Kearney, will find themselves on the hook for defending decisions that, on balance, sorely test the IDAs’ assertion that they are beneficial to the public.


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