Glen Cove IDA failed to collect $250G in late fees, properly monitor projects, state audit says

The Glen Cove Industrial Development agency failed to collect more than $250,000 in late fees and incorrectly allocated almost $400,000 in payments in lieu of taxes from projects in the city in 2017 and 2018, according to an audit by the state comptroller’s office.

"The [IDA] Board and officials did not properly approve and monitor projects or take action when goals were not met," the audit said.

The audit, issued July 16, said that 52 of 115 payments in lieu of taxes, or PILOTs, from nine projects were paid as much as nine months late. The IDA did not bill or collect late fees and accrued interest totaling $259,303 were not billed or collected. PILOTs are a form of tax breaks typically used as an incentive for a company to develop property. Glen Cove properties with PILOT agreements include affordable housing, mixed-used residential and commercial development, an office space, a storage facility, a movie theater, a memory care facility and apartment complexes.

The audit also found that the IDA improperly allocated $375,914 of PILOTs to Nassau County that should have gone to the city, school district and library.

The audit covered a two-year period during which Mayor Timothy Tenke, a Democrat, took office in 2018 after defeating incumbent Reginald Spinello, an Independence party member who ran on the Republican line.

In its written response to the audit, the IDA said some of the problems were created by staff turnover and that a former city controller had used incorrect due dates for payments and hadn’t properly updated information used to allocate the PILOTs to different taxing jurisdictions.

"New invoicing and verification procedures have been put in place between Finance and the IDA, under the oversight of the current Controller who took office at the beginning of 2020," the IDA’s response said. The IDA wrote in its response that new procedures include PILOT invoices being emailed 30 days in advance of due dates, greater level of review by city and IDA officials and annual updates of tax information to insure that PILOTs are properly distributed to the county, city, school district and library.

Nassau County is reviewing the audit.

"The County is committed to reviewing the finding and working with the Glen Cove IDA to help them remedy any potential overpayment issues," spokesman Michael Fricchone said in a text message.

City Councilwoman Marsha Silverman, a longtime critic of the IDA, said the audit showed the mistakes hurt taxpayers.

"We’re giving away too much and other taxpayers are subsidizing these developers and corporations," Silverman said in an interview. "To add insult to injury we’re not even collecting what’s due and we’re adding more burdens to taxpayers."