The Town of Hempstead Industrial Development Agency Wednesday postponed a decision on a tax benefit for a real estate company planning to buy a 337-unit apartment complex in Hempstead Village.
The agency deferred action on the proposal at a meeting where two elected officials and several residents interrupted the proceedings to urge the board to delay a vote.
Representatives of the prospective buyer said they would not complete the $22.9-million purchase of 590-600 Fulton Ave. unless the board granted the tax break because the tax structure was "untenable."
The company, whose principal owner is Karan Singh, plans to invest $5.9 million on upgrades such as new kitchens and bathrooms, said Dan Deegan, a Uniondale lawyer for 590-600 Realty Corp. But tenants of the rent-regulated building say such extensive repairs are unnecessary and would lead to higher rents.
If the company does not close the sale by March 23, it would forfeit $300,000 of the down payment, Deegan said.
The company's proposal calls for a 20-year tax break. Wednesday the board agreed to consider an abatement that would last only 15 years.
After conferring privately, the board moved to table action on the proposal and reconvene after the company determines if the closing can be delayed. Hours later, Deegan said the current owner of the building had declined to extend the deadline.
Hempstead Village Mayor Wayne Hall Sr. has opposed the tax break, called a payment in lieu of taxes, or PILOT, saying a third of the village's assessed value is off the tax rolls and taxpayers are crushed by the property tax burden. "We can't sustain these PILOTs anymore," he said.
The proposal seeks a 38 percent cut in property tax payments the first year, to $775,100 from $1.25 million. The tax break would then diminish each year.
In an interview, Hall raised questions about the management of two low-income apartment buildings in Hempstead owned by Singh, saying they are "a total disaster."
In response, Deegan cited a letter from the head of the county's Office of Housing and Homeless Services describing Singh as "an asset" to the village and saying the two buildings were up to county housing quality standards.
One of the properties, an 81-unit building on Jackson Street, has a history of overcrowding violations, village Building Department Superintendent Arthur Chenault said. No violations are pending, he said.