Developers, Town of Hempstead officials and labor leaders celebrated a ceremonial building demolition Monday on a site that has sat vacant for more than a decade in the center of a prime retail corridor.

"Since the economy tanked, this is by far the most significant development we've had," Hempstead Town Supervisor Kate Murray said moments before demolition equipment tore into the brick wall of a building. "This is really the retail industry coming roaring back."

Equity One Inc., the property's new owner and a Manhattan-based shopping-center real estate investment trust, has begun transforming the former Avis Rent-a-Car headquarters in Garden City into a 330,000- square-foot retail, banking and restaurant center. It's expected to generate about 600 permanent jobs and, during construction, an average of 500 construction jobs a year and $160 million in direct investment and economic activity, town officials and developers said. The hope is for completion by 2012.

"We know how important it is to bring jobs to this area," said Councilwoman Dorothy Goosby, in whose district the new retail project is located.

Equity One Inc., which owns 175 shopping centers around the country, will invest about $100 million to build the Gallery at Westbury Plaza, the name of the new development. The firm purchased that property in 2009 as well as the Westbury Plaza, the adjacent shopping center where a Walmart store is a tenant.

That Equity One will be designing the shopping center from scratch in a prime and very developed retail area makes the project attractive, said Equity One chief executive officer Jeffrey Olson. The firm will also be able to offer shoppers another 400,000 square feet of easily accessible shops in the plaza next door, he said.

"Westbury is one of the strongest retail markets in the country," Olson said. "There are very few new centers in this market, and it is a proven retail destination."

Equity One will receive a sales tax exemption during the construction phase and pay a set property tax of $1.7 million annually for the first five years and $1.8 million for the next five years, in return for generating jobs and other economic goals, according to an agreement that has not yet been finalized, said Frederick Parola, executive director of the town's Industrial Development Agency.

In the meantime, the project will provide a much-needed boost to the construction industry, which is experiencing about a 30 percent unemployment rate, said John Durso, president of the Long Island Federation of Labor. "It's fabulous because 500 construction jobs are assured, and they're going to be union jobs," he said.

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