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A nearly 40-year stalemate on Long Beach development ends

Construction is expected to begin later this year

Construction is expected to begin later this year on apartments and condos near the Long Beach boardwalk.  Credit: Engel Burman

The Nassau County Industrial Development Agency unanimously approved $49 million in tax breaks for developers to build 438 oceanfront apartments and condos in Long Beach on the Superblock property, ending a nearly 40-year stalemate to develop the site.

The vacant property off the boardwalk between Riverside and Long Beach boulevards has been mired in litigation and disputes between past developers and the city since at least 1984.

IDA members on Tuesday granted Garden City developer Engel Burman property tax breaks for the next 25 years. The company was also given a $13 million sales tax exemption on construction materials and $1.8 million in savings on mortgage recording taxes.

Engel Burman officials said they expect to pay $130 million in taxes for the life of the PILOT, or payment in lieu of taxes, which freezes taxes for the first 10 years, before gradually increasing them for the next 15 years.

“This is one of the most important projects the IDA has ever done,” IDA chairman Richard Kessel said. “This is historic for the city of Long Beach. I understand it’s not perfect, but sometimes you have to move forward. This has gone through fits and starts for decades and it’s our turn to give Long Beach a shot in the arm.”

IDA officials said they would not complete the tax breaks until previous developer iStar Financial agreed to dismiss a $100 million lawsuit against the city, which is expected to occur at the closing of the property sale to Engel Burman.

IDA officials also said they would form a committee of IDA members, developers, union workers and city officials to follow the progress of the project to completion, which is expected within four years.

Developers plan to spend $369 million to build three buildings on the vacant parcel, including 200 condos and 238 apartments. The first two levels of the building will include more than 1,100 parking spaces, a boardwalk-level plaza and 6,500-square-foot restaurant.

The project is expected to generate 1,000 construction jobs, primarily using union labor. While developers will save taxes on the apartments, the condos will be assessed in full, generating up to $3.5 million in tax revenue annually once they are built.

Long Beach City Council president John Bendo said the city will receive $32 million in new tax revenue after expenses. The city is subsidizing the apartments for the first 10 years, but the $11.8 million in revenue from condos is expected to offset any losses. The Long Beach school district will receive $75 million over the life of the project, and Nassau County is expected to gain $13 million.

Developers said they could not build the project without county tax breaks because of construction costs, including the use of hurricane-proof building materials, and meeting federal storm protection standards.

The IDA’s approval clears the way for developers to apply for building permits and get the signoff from the city’s architectural review board to start construction later this year.

“After a nearly forty-year hiatus from the economy of the City of Long Beach and Nassau County, the Superblock is finally about to enter a new and exciting chapter and we are honored to be allowed the opportunity to be its agent of positive and strategic change,” Engel Burman officials said in a statement.

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