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Long Beach Superblock tax breaks need city support, developer says

Developers for the Long Beach Superblock property, seen

Developers for the Long Beach Superblock property, seen here on Friday, Jan. 1, 2016, told city officials last week that they needed to endorse their application for millions in tax breaks to build oceanfront apartments. Credit: Barry Sloan

Developers for the Long Beach Superblock property told city officials last week that they needed to endorse their request for $82 million in tax breaks to build oceanfront apartments.

But Nassau County Industrial Development Agency officials said Thursday they gave no such directive to developers, and the city’s support would not determine if tax breaks are granted.

“They can say whatever they want,” the IDA’s executive director, Joseph J. Kearny, said of the developers. “Obviously, if the local municipality is supportive, that may be helpful, but it is absolutely not a deciding factor.”

Matthew Parrott, an attorney for the developers, Manhattan-based iStar, sent a letter on Tuesday to Long Beach Corporation Counsel Rob Agostisi asking the city to expedite a letter of support to the IDA after Long Beach officials held a public meeting May 10 to discuss the project.

“We have been advised by the IDA that, unless the city provides us with the requested letter of support, the IDA will not approve the benefits application,” Parrott wrote. “It is urgent that the city provide the letter of support as soon as possible.”

Representatives with iStar did not respond to requests for comment.

The letters exchanged between the city and iStar asking for the city’s support were obtained by Newsday last week.

The developers are seeking 20 years of tax breaks to build two 15-floor buildings with 522 apartments along the Long Beach boardwalk between Long Beach and Riverside boulevards. The IDA rejected the developer’s two previous requests for tax breaks in the past two years, for $129 million and $109 million.

IStar also asked the city to support the project at the next IDA public hearing or proceedings, which have not been scheduled.

The developers have told city officials they would try for a third time to get tax breaks for the project, but no application has been submitted to the IDA, Kearny said. iStar officials have said they cannot build on the property without tax breaks.

Officials with iStar last week threatened to file a $105 million lawsuit against Long Beach if the city does not send a letter to the IDA supporting the project.

City officials have not taken a position on the most recent application and are weighing whether to send a letter of support to the IDA or to absorb the expense of fighting a lawsuit by iStar.

Agostisi replied to iStar’s letter Wednesday, noting the city never committed to sending a letter of support. He also questioned iStar’s assertion that the IDA would not approve the project without city support.

“The city cannot understand how the IDA can unilaterally institute a requirement with this specific application, which does not otherwise exist in any law, rule or regulation,” Agostisi wrote.

Agostisi said in the letter that the IDA had no standing rules requiring that a community support a project before the agency ruled on tax breaks. He said if a “newly minted rule” was imposed, it would be arbitrary to Long Beach and may not “withstand judicial scrutiny.”

He asked iStar’s attorney for the names of IDA officials who said the application would not be approved without the city’s letter.

“Perhaps a meeting with these individuals may facilitate a resolution that might help prevent this critical matter from careening out of control,” Agostisi wrote.

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