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Hempstead IDA eyes new tax break for Raymour & Flanigan

The Hempstead Town Industrial Development Agency is to vote Tuesday on tax breaks for a furniture warehouse in Lawrence after increasing the amount of payments Raymour & Flanigan would make based on 2017 taxes instead of last year’s lower levels.

The previous tax break, preliminarily approved on Dec. 21, allowed the company to make a payment to the taxing entities instead of paying taxes. Such “payment in lieu of taxes” agreements, known as PILOTs, are used as incentives to attract or keep businesses.

Under the previous PILOT proposal, the payment would have been equal to the warehouse property’s 2016 tax bill of $377,587. It would have stayed at that amount for three years and ended 10 years after the start date at roughly $427,000.

The IDA board was scheduled to vote on giving final approval on Thursday. But the issue was removed from the agenda after the 2017 tax figures were released by the county assessor’s office showing the property’s current taxes increased to $433,248, well above the original PILOT payments.

The IDA members, appointed by the town board in November, have come under scrutiny after a previous board granted tax breaks to the Green Acres Mall that have been blamed for steep residential tax increases in Valley Stream. IDA members have said the tax increases were related to several factors, including school budgeting practices.

New board members have noted the increased attention on their decisions because of the mall controversy. IDA executive director Fred Parola has said businesses can seek tax breaks from other IDAs on Long Island if the Hempstead IDA did not reduce taxes.

The Raymour & Flanigan PILOT was briefly discussed during Thursday’s IDA board meeting. Chairman Arthur Nastre said at the meeting that the board’s goal is to start payments at the current tax level.

The previous IDA board was scheduled to approve the original tax breaks using the 2016 tax figures at its November meeting, but the meeting was canceled when the IDA board resigned over the Green Acres controversy.

Raymour & Flanigan’s East Meadow-based attorney, Daniel Baker, said the changing tax levels weren’t the responsibility of the company and it shouldn’t be penalized for the change.

“It’s not like my client pulled a fast one,” Baker said during Thursday’s meeting.

The property at 55 Johnson Rd. in Lawrence is currently owned by freight forwarding company Ceva Logistics. The structure on the parcel is vacant. Raymour & Flanigan plans to use it as a warehouse and furniture distribution center.

The furniture company plans to employ 70 full-time workers at the location by the second year of the tax breaks, which also include a sales tax exemption and a mortgage recording tax abatement, according to IDA documents.

The property’s current market value is about $6.9 million, but Raymour & Flanigan could pay as much as $27 million for it, according to IDA documents. Valley Stream attorney Albert D’Agostino, representing the Lawrence school district, said school officials are concerned about that gap in pricing.

“The district intends to protect its taxpayers and its interests,” D’Agostino said Friday.

The IDA board does not base tax breaks on sale price, officials have said.

On Tuesday, the IDA board is expected to vote on a new PILOT agreement that would start at the 2017 taxes and finish 10 years later at approximately $475,000, IDA officials said.

Nastre declined to comment through a representative on Friday.


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