The town of Hempstead’s Industrial Development Agency, by unanimous vote on Wednesday, hired an economic development firm to study the impact of tax breaks given to Green Acres Mall developers in 2014.
It’s a move, however, that does zero to shield Valley Stream residents — who already are receiving their tax bills — from school tax hikes of up to $1,000 as a result of breaks given to mall developers.
The IDA’s move also does nothing to answer two key questions: Why didn’t the authority retain a specialty firm for analysis two years ago — before granting the tax breaks? And why was there no warning to school districts and residents that the agency’s 2014 action would send taxes sky high?
There’s no move the IDA can make now to eliminate the harm to residents now trying to figure how to cover their high tax bills.
In 2014, the board moved quickly, and unusually so, in deciding to grant the massive tax break. And as documents posted online by the IDA itself show, the authority decided to go against its own Uniform Tax Exemption Policy by lowering the mall’s taxes by millions of dollars below the current rate.
Lowering tax rates? That authority usually rests with Nassau County. And here’s how that process works: The property owner grieves the commercial tax assessment, leaving the county to determine whether the request has merit.
Should the assessment — which is used to determine property tax rates — be deemed too high, the rate, along with taxes, would go down. But here’s what’s key: Property owners within the same taxing jurisdiction — in this case, Valley Stream’s school districts, which are seeing the highest increases — would be forced to make up that difference.
Why did Hempstead’s IDA take the unusual route of lowering the mall’s taxes.? “Because the facility will provide jobs for the residents of the Town of Hempstead,” according to IDA documents. Residents at the meeting Wednesday challenged the assertion, pointing out that the mall serves many Queens residents, who also hold many of the retail jobs.
The IDA, in the documents, also noted that the mall “project would not be economically viable” if the agency didn’t break with policy.
Usually, IDAs help businesses by providing benefits, including breaks from sales and mortgage recording taxes. As for property taxes, most Long Island IDA’s slow the rate of increases — over, say 15 years, with options to add five more.
But reducing Green Acres’ property taxes? Three other IDAs — Babylon, Islip and Suffolk County — allow such reductions. But the policy of Hempstead’s IDA, which is headed by former Nassau County Comptroller Fred Parola, does not.
The Town of Hempstead — which appoints the board of the independent IDA — has threatened to sue the agency. And George Maragos, Nassau’s comptroller, has launched a review of the deal.
What does that do for residents now liable for making up the mall’s tax breaks? Nothing.
And what is the solution for that?