A judge on Tuesday temporarily halted the Hempstead Town Industrial Development Agency’s plan to revoke tax breaks for the owner of the Green Acres Mall in Valley Stream, as the monthslong controversy over the deal moved into the courtroom.
Nassau Supreme Court Justice Timothy Driscoll granted a request for a temporary restraining order by the mall’s owner, California-based Macerich. The company had requested the order as part of a lawsuit it filed Tuesday against the IDA that challenged the agency’s move to revoke its tax breaks.
Driscoll’s decision Tuesday effectively halts the IDA’s efforts to undo the tax breaks — including two payment-in-lieu-of-taxes agreements, or PILOTs — as the two sides try to hash out the matter.
The judge said he was persuaded that the “unraveling” of the agreements without the temporary order would be “deleterious” to Macerich, and recommended a “cooling-off” period with discussions between the attorneys for both parties.
Driscoll directed Macerich to continue filing its PILOT payments. The matter is due back in court July 27.
Attorneys for the IDA and Macerich declined to comment after Tuesday’s court appearance.
Macerich, owner of the mall and the adjacent Green Acres Commons, said in the Article 78 challenge that there was no “legal or factual basis” for the tax breaks’ revocation, and called the IDA’s plan to overturn them “solely in response to public and political pressure.”
The IDA “acted in an arbitrary, capricious and unlawful manner” when it voted in April to revoke the deals, Macerich said in court documents obtained by Newsday. “The owners are being cast as the scapegoat for what has become a politically unpopular agreement.”
Valley Stream taxpayers and elected officials have blamed increases in their school tax bills on the tax breaks granted to the mall and commons, but IDA officials maintain that school budgeting practices were to blame.
The IDA board cited alleged “grossly misstated” job creation as its reasoning for revoking the deal in April, but Macerich has called the move “a blatant violation” of its rights. The lawsuit states that Macerich is not required to fulfill its job requirements yet as part of the agreement and even so, the IDA failed to provide written notice of any potential noncompliance.
The lawsuit came two days before the IDA’s next meeting, when its board was scheduled to vote to terminate its agreements with Macerich. In order to return the mall and commons to the tax rolls, the IDA must give the titles back to Macerich — a process it planned to begin on Thursday. But the company was not expected to sign the necessary paperwork, and it was unclear if the IDA board still planned to meet on Thursday.
Bruce Ferguson, former executive director of the Suffolk County IDA, called both the revocation of the tax breaks and the subsequent lawsuit unusual.
“I’m sure there’s going to be some kind of a backlash on this,” he said. “There’s a lot of money on the table.”