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Judge sides with Green Acres Mall over IDA tax breaks lawsuit

The Green Acres Mall where the Hempstead Town

The Green Acres Mall where the Hempstead Town IDA decides to revoke the tax deal on Thursday, April 27, 2017 in Valley Stream. Credit: Howard Schnapp

A Nassau County judge has ruled in favor of the owner of Green Acres Mall in Valley Stream, saying that the Hempstead Town Industrial Development Agency unlawfully revoked the mall’s tax breaks last spring.

Following a public outcry, the IDA board voted in April to revoke tax breaks granted to the mall and an adjacent shopping center, Green Acres Commons, in Valley Stream. The board alleged that the mall’s owner, California-based Macerich, had “grossly misstated” its job creation numbers.

Macerich sued the IDA in June. The lawsuit was heard by Nassau Supreme Court Justice Timothy Driscoll, who temporarily stopped the IDA’s attempts to undo the tax breaks as the case played out in court.

Macerich had claimed that the IDA’s efforts to revoke the tax breaks were “a blatant violation” of the company’s rights and the vote was politically motivated after Valley Stream taxpayers and elected officials had blamed Macerich’s tax breaks — including an agreement called payments in lieu of taxes, or PILOTs — for hikes in their 2016 school taxes and vilified the IDA for the deal. But an audit by the state comptroller’s office, released in December, found that the school tax hikes were largely the fault of budgeting practices by two Valley Stream school districts and absolved the IDA.

A letter from the IDA’s staff in response to the audit stated that Macerich hit its job benchmarks — contradicting the IDA board’s vote.

Driscoll pointed to the staff’s letter in his decision, dated Feb. 15, and declared that the IDA acted “in a manner that is arbitrary, capricious, an abuse of discretion and in violation of the law.”

Driscoll’s decision annulled the IDA board’s April votes and prohibits the agency from trying to revoke the deal again based on job creation figures.

“In sum, it may well be that the IDA desires to terminate the PILOTs agreements,” Driscoll wrote. “It may be well that such a desire reflects the will of the IDA’s constituency. And it may be well that the IDA has a proper basis to take such action. The present record before the Court, however, demonstrates that the IDA did not have a properly articulated basis” for its April votes to revoke the tax breaks.

Macerich declined to comment Friday, and the IDA could not be reached for comment.

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