Hempstead Village officials and dozens of residents attended a Hempstead Town agency hearing to protest a proposed 20-year tax break for a company seeking to buy and renovate a 337-unit apartment complex.
The partial tax exemption, sought for two rent-regulated buildings at 590-600 Fulton Ave., would cut tax payments by 38 percent the first year, from $1.25 million to $775,100, according to the Hempstead Town Industrial Development Agency documents.
Dan Deegan, a Uniondale attorney for the company, 590-600 Realty Corp., said the buildings need almost $6 million in repairs and security upgrades. He said the company could not afford to buy and do the work without the tax incentive, called a payment in lieu of taxes, or PILOT. "Without IDA assistance, the project is not economically feasible and the blight will only worsen," Deegan said at Monday's hearing.
The price tag on the property is $22.9 million. Under the proposal, the company would spend $5.9 million to fix a leaky roof, install a new security system, and remake kitchens and bathrooms, among other improvements. And it would pay $4.6 million in outstanding debt. "The worse conditions get, the less rent that can be collected. And the less rent collected, the worse conditions get," Deegan said.
Village Mayor Wayne Hall Sr. countered that the village's tax base was already strained, with close to one-third of the assessed value off the tax rolls and 16 PILOT agreements in effect. Last year, Hall supported a 30-year PILOT for a low-income housing developer that bought 26 buildings along a depressed stretch of Terrace Avenue.
But, he said, the recession has made him reconsider PILOTs. "The times have completely, dramatically changed," said Hall, who opposed the PILOT at the hearing along with three village trustees. "We just can't continue giving out tax breaks to people, because that has an adverse effect on our residents."
At the hearing, some tenants said that while the buildings could use some repairs, they were not so substantial as to warrant a 20-year tax break.
Sey Edwards, former president of the complex's tenant association, said the current owner has made some repairs and the problem of security can be addressed without a PILOT.
The Hempstead Town Industrial Development Agency is scheduled to meet Wednesday but does not plan on voting on the matter, executive director Fred Parola said.Parola said the agency's board members, who were not at the hearing because they typically don't attend such meetings,, would review transcripts and consider the community's opposition before taking a vote.