67° Good Afternoon
67° Good Afternoon
Hello, we've upgraded our systems.

Please log back in to enjoy your subscription. Thank you for being part of the Newsday family.

Forgot your password? We can help go here.

Log in
Long IslandColumnistsJoye Brown

Nassau IDA sets bad precedent with breaks for retailers

Recently, the IDA -- in one of a

Recently, the IDA -- in one of a series of generous incentives granted to retail establishments -- managed to mine gold by using monthly locker rentals as justification for helping out a national chain of family-oriented health clubs.

Psst, health club owners. This column is for you.

Know those banged up, sometimes nasty lockers? You know, the ones where sometimes you end up breaking out the bolt cutters for locks left behind by customers who are long gone? Well, Nassau's industrial development agency has something that maybe could help.

Recently, the IDA -- in one of a series of generous incentives granted to retail establishments -- managed to mine gold by using monthly locker rentals as justification for helping out a national chain of family oriented health clubs.

The chain, Life Time Fitness, which has a facility in Syosset, has received help from Nassau's IDA before: That was back in 2011, during a period when a state law barring IDAs from helping retail establishments had lapsed.

Gov. Andrew M. Cuomo pushed to renew the prohibition against helping retailers. Backers of the legislation said such businesses generally create only low-paying jobs and likely could be built without government help.

The law went back on the books in 2013 -- which left Nassau's IDA the task of finding a way around it. And the IDA did, by citing -- health club members, pay attention please -- how the facility uses its lockers.

According to Joseph J. Kearney, the IDA's executive director, health club members pay rent for their lockers "which is similar to a landlord-tenant relationship and allowed under state law."

In an interview last week, Kearney said the chain's second Long Island facility -- which would go up in a distressed retail area near Roosevelt Field in Garden City -- also qualified for an exemption because 2,000 of its members are expected to come from outside Nassau. That, he said, meets the bar for the establishment to be a "tourist destination" -- one of the law's exemptions.

To be fair, Nassau has precious little room for development, and needs to grow, keep or remake as many commercial parcels as it can to boost sales-tax revenue and jobs.

The health club is promising to add 181 jobs in its first year. But the chain -- which last month was given a $2 million sales tax exemption and a deal that freezes property taxes for five years, and then allows them to increase by 2 percent annually over the next 15 years -- isn't the first retail establishment to benefit from the IDA's search for exemptions.

And incentives -- such as reductions for homeowners under Nassau's assessment appeals system -- leaves Nassau property owners who don't win incentives covering the cost for those who do.

Kearney last week said there was nothing to say about an application filed in June by another national chain, Costco. The company was seeking to save $900,000 in sales tax on construction supplies and store furnishings, $162,000 on a mortgage recording tax and an undetermined amount on property taxes over several years for a new store in Oceanside.

"We do not anticipate taking any action," Kearney said of the application, which generated public criticism before being mothballed.

But wait, the IDA also has helped two auto dealers by providing incentives that allowed them to rebuild showrooms. According to Kearney, the "tourist exemption" applied because the dealers were located on or near the Nassau-Queens border, enabling them to attract customers from elsewhere.

While other Nassau dealerships are funding their manufacturer-mandated showroom expansions with lines of credit or some other means, Garden City Jeep got an IDA sales tax exemption of as much as $150,000 on construction materials, furniture and other supplies, and $25,000 off the mortgage recording tax.

At a minimum, the IDA's tortured justifications risk opening the floodgates for projects that ought to be paying for themselves. That's a dangerous precedent.

Latest Long Island News