The chief executive of the company planning a $1 billion redevelopment of Glen Cove’s waterfront said the project could not be built without using future tax revenues to help fund the construction of 28 acres of park land and a reconstructed road.
RXR Realty and two quasi-municipal agencies are negotiating over whether the agencies will issue $75 million to $80 million in tax increment financing bonds, which would use future tax revenue generated by the project to partially pay for the parks, an amphitheater, an esplanade, a reconstructed Garvies Point Road and other amenities.
The 56-acre project, called Garvies Point, also would include 1,110 condominiums and apartments, marinas, stores, restaurants and offices.
RXR Chairman and CEO Scott Rechler said the entire project would take 10 years to construct. The parks, which would be open to the public, would be built in the first two.
That timetable would quickly bring parks to area residents and, as features that make the residential units more appealing, help attract financing for the rest of the project, Rechler said.
Without the tax revenue, “it could not be built, because the amount of infrastructure that has to be built here -- it’s uneconomical to be able to build something commercial without having that infrastructure funded from some source,” Rechler said.”
Glen Cove resident Amy Peters, one of 105 plaintiffs in a lawsuit seeking to block the project, said the tax plan undermines what city officials say is a key benefit of Garvies Point: Increased tax revenue that would help stabilize city finances.
But Mayor Reginald Spinello said that without the development, the city would continue to receive no tax money from the formerly industrial land, which is undergoing tens of millions of dollars in environmental remediation.
With it, the city, schools, county and library could net more than $400 million over 40 years, even after the bonds and money for new city services are taken into account, Spinello said, citing tentative numbers.
RXR already has invested heavily in the project, he said.
“RXR has put $40 million into this, into some things we were probably responsible for, without having any gain or anything,” Spinello said. “They’ve put a lot of risk in and paid their fair share of things.”
Frank Haftel, director of the Garvies Point project for RXR, said the company also is buying private land for public use and will contribute at least $10 million to build public amenities.
Philip Pidot, a former financial fraud investigator who runs a Manhattan-based financial products startup, is skeptical of the $400 million figure. Pidot, who ran unsuccessfully for City Council last year, said it’s difficult to predict multi-decade tax revenue. They’re based on assumptions about property values, tax rates, construction timelines and other factors — assumptions that often aren’t borne out, he said. The $400 million estimate can’t be evaluated until the assumptions underlying them are released, he said.
Rechler said the benefit of the development to the city goes beyond tax revenue.
“You bring young professionals, people who otherwise would not be living here, and inject new buying power, new people shopping in the stores, a new sense of community on the waterfront, new energy,” Rechler said. “This is how you stimulate economies.”