Thank goodness for Nassau’s independent Office of Legislative Budget Review — which, in a report last week, offered the first cogent look at the impact of tax cuts for the Green Acres Mall.
This week, the Hempstead Town Board is slated to determine whether the town’s Industrial Development Agency’s board, which agreed to the tax breaks as part of an economic incentive agreement, will be dismissed — and then, presumably, replaced with members more willing to seek changes in the agreement.
The reality, however, is that forcing a change won’t come easy. In fact, such a move could expose the town and the IDA to legal action by the mall’s owner, California-based Macerich.
But given the outcry over significant tax increases this year for residential property owners in Valley Stream school districts, it’s no wonder that elected officials on the town, state and county level are seeking some solution.
Last week, the IDA began fighting back against assertions by the school district and residents that the break for the mall left a tax vacuum residents are being forced to fill.
That’s where the assessment from the budget review office, which analyzed the fiscal and economic impact of the IDA’s agreement with the mall’s owner at the request of Legis. Carriè Solages (D-Elmont), comes in.
The six-page report clarifies that there actually were two agreements between the IDA and the mall’s owner granting lower taxes — or in IDA-speak, Payments in Lieu of Taxes (PILOT). The agreements, dated May 2015, expire in December 2026, with an option to extend until December 2031, according to the report.
While the bulk of the public outcry has been over the steep increases in property taxes in two Valley Stream school districts, the report also covers the deal’s impact on other taxing entities — Hempstead, Green Acres/North Valley Stream library district, Nassau County, and Hempstead’s lighting, park and sanitary district No. 1.
In a comparison chart between what the mall paid in taxes in 2016 and under estimated PILOT payments for 2017, the legislative report shows Nassau getting almost $1 million less in property taxes from the mall; the town getting about a half-million dollars less; and the special districts, combined, getting $304,000 less — all of which would be made up by residents.
For schools — that is Valley Stream District 30 and the Central High School district, which also includes Valley Stream Districts 13 and 24 — the decrease between 2016 and 2017, when the PILOTS take effect, is $4.6 million.
Over the same period, according to the report, the mall saw a savings of $6.5 million because of the PILOT.
“A redistribution happened,” the report states, “ . . . based on the removal . . . [from the commercial property tax rolls] of the Green Acres Mall parcels, which is now shifted to . . . homeowners resulting in the residents’ tax bills increase.”
There’s also an impact on taxes paid by residents living in the other taxing districts: “It is important to understand,” the report states, “that the shift . . . will affect all taxes paid . . . to many different levels of government.”
The report does point out some benefits of the agreement. “Jobs were created and retained, which has a positive recurring economic impact,” said the report, although the jobs pay “lower than average county individual earnings.”
Bottom line? “The tax exemptions place a significant and volatile burden on . . . [residential] taxpayers,” the report concludes. “Nassau County wage growth has been relatively sluggish, making it especially hard for households to cover the significant swings in . . . property tax liability.”
The legislative budget office’s conclusion puts things quite plainly — a bonus, which, in itself, shows the value of independent eyes.