State auditors were at Hempstead Town’s Industrial Development Agency reviewing documents and talking to staffers Wednesday as Comptroller Thomas P. DiNapoli’s review of tax breaks granted to the Green Acres Mall in Valley Stream continued.
“We are cooperating,” said John Ryan, the IDA’s lawyer. He said an audit could help clear the air on the IDA’s decision to grant the mall owner tax breaks — which left residents to cover the rest of the tab.
Jennifer Freeman, a spokeswoman for DiNapoli, called the visit to the IDA “standard protocol when an audit is underway.”
What a difference a few news cycles make.
On Monday, in an annual report on IDAs around the state, DiNapoli’s office said a $20.l million tax break granted to the mall in 2015 represented the second-largest IDA benefit in New York State that year.
Ryan challenged the report, saying Green Acres’ owner received no tax break that year. As of Wednesday, however, neither the comptroller’s office nor the state Authority Budget Office had received a request from Hempstead’s IDA to change anything in the report, Freeman said.
On May 29, 2015, the mall — the second-largest source of property tax revenue in the county — and a related parcel slated for development were removed from the tax rolls. Instead of paying property taxes, the owners were obligated to hand over payments in lieu of taxes, or PILOTS.
That first payment was made last year.
But here’s the rub for angry village, town, county and state elected officials: That PILOT was significantly lower than what the mall had been paying in taxes.
Many town residents said they were stunned to learn that property owners, particularly in Valley Stream School District 30, would left to pick up the slack. Taxes for some jumped by almost $1,000.
Ryan said that, to his recollection, the IDA board was approached in 2014 by the mall’s owners who wanted to keep the property — which had fallen on hard times with an increase in crime, especially at a since-demolished movie theater — a going concern. But there was no threat to shut it down.
Ryan said the IDA set out to help the mall’s California-based owner, Macerich, which had come to the IDA for relief, renovate the mall, and develop a nearby parcel. Part of that help was to effectively circumvent the county by reducing the assessment on the property — which the owners had challenged.
In paperwork approving the deal, the IDA made no mention of a hoped-for renaissance at the mall. It did, however, justify the decision in part by calling the mall a “tourist destination.”
In addition to auditing the Green Acres Mall and the adjacent development DiNapoli’s office is auditing School District 30. Some local districts, including District 30, it turns out, had incorrectly calculated their expected PILOT payments.
“A number of people raised concerns with us,” about the IDA deal, Freeman said.
Freeman noted that the audit was just beginning, and that the inquiries typically take from six months to a year to complete. So residents will keep waiting. Why did taxes go up so much, so fast and — they complain — with so little notice?
Maybe DiNapoli can shed light on such questions — unless, of course, his findings raise even more.