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Baldwin downtown revitalization developer pulls out of project

Developer Engel Burman Group cited rising construction costs and not getting tax breaks as its reasons.

The corner of Grand Avenue and Merrick Road

The corner of Grand Avenue and Merrick Road looking south from the northwest corner in Baldwin. Photo Credit: Newsday/J. Conrad Williams

The master developer behind the downtown Baldwin redevelopment backed out of the project, saying it would no longer be profitable.

Garden City-based developer Engel Burman Group canceled a contract with the Town of Hempstead because of rising construction costs and tax incentives not being available, officials said last week.

The project has been in limbo for more than 15 years as the town has struggled to find developers to renovate the struggling downtown area off Grand Avenue.

The town designated Engel Burman and Woodmere-based Basser-Kaufman as the master developers to acquire vacant downtown properties planned for mixed use development of apartments, restaurants and shopping.

Financially, the deal began to fray because it didn’t make sense, said Gary Lewi, a spokesman for Engle Burman. “The current structure of this deal could no longer eke out a profit. If you’re not making a profit, you’re no longer in business anymore.”

Hempstead Town Supervisor Laura Gillen said the contract fell apart when the town’s Industrial Development Agency could not support developers' request for tax breaks over 30 years.

“It [the IDA] made it clear this wasn’t going to happen,” Gillen said of tax breaks.

The town board selected Engel Burman as the master developer in April 2016 to redevelop the corridor along Grand Avenue near Merrick Road in downtown Baldwin. The town signed a contract in May 2017 under then-Supervisor Anthony Santino. Gillen said the project stalled until developers filed an application for tax breaks in February.

The contract included a public funding mechanism, counting on tax-exempt bonds, which town officials said the project didn’t qualify for. Developers later rescinded their tax break application with the town’s IDA.

“There were high-level discussions on how to make the financing work,”  Town Councilwoman Erin King Sweeney said. “There wasn’t enough money available to work with them.”

King Sweeney has proposed a new Baldwin Grand Avenue Overlay Zone to set parameters for development and cut through the process of specific zoning and variances in Baldwin’s commercial district.

 “We want to create a viable downtown," King Sweeney said. "We have to do it in Baldwin and across the South Shore. There are empty streets and empty storefronts, and we have to bring back these downtowns.”

Gillen said the town should no longer attempt to acquire large swaths of the downtown, which would have cost $15 million, but instead work on individual properties with multiple developers to revitalize the downtown.

“We want to send message to the development community that we want you here and want to make it easier to see how this community can develop,” Gillen said.

Hempstead Town officials have received $1.5 million in state grants for the project from the Empire State Development’s Restore New York Communities Initiative. Gillen and State Sen. Todd Kaminsky (D-Long Beach) said they were working to secure the money and seek additional funding to continue downtown development.

“I will work hard to make sure the state funds already allocated to Baldwin can be applied to a re-imagined project,” Kaminsky said.

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