IDA audit shows no clear taxpayer benefit

County Comptroller George Maragos Tuesday cited numerous deficiencies in the operation of the Nassau County Industrial Development Agency in 2009.

"In 2009, it had 119 active projects totaling approximately $2.3 billion in investments," Maragos said. "Unfortunately, ... records did not clearly describe the benefits to the taxpayers for the financial assistance given on most projects."

IDAs are independent public benefit corporations that promote jobs and commerce. They provide incentives that include tax breaks, and businesses often make payments in lieu of taxes, or PILOTS, that are far less than the taxes would have been. Maragos said the Nassau IDA lacked detailed written guidelines for evaluating and granting PILOTS.

The comptroller's report said that such PILOTS were often not based on any relationship to the expected county benefit. The audit cited a 20-year PILOT agreement with Neptune Regional Transmission System Llc based in Fairfield, Conn. The company, a LIPA subcontractor that transmits power to Nassau from New Jersey via an undersea cable, paid a PILOT of $200,000 in 2009 when its normal taxes were estimated at $8.9 million annually, the report said.

Chris Hocker, a spokesman for Neptune, said he could not comment on the report without more information.

Maragos said the report, which looks at projects going back to 1997 and at finances in 2009, was sought by the current IDA board. GOP County Executive Edward Mangano named three of the five IDA members in 2010. Democrats controlled the county administration from 2002 through 2009. The IDA has been operating since 1975.

Leonard Steinman, the last chairman of the IDA board under the Democrats and now a member of the Nassau Interim Finance Authority, a state watchdog that controls Nassau County finances, was unavailable for comment. Maragos' office said Steinman had been sent a copy of the report.