Nassau eyeing real estate to balance budget

Nassau County officials are shifting their attention away from labor concessions as a major part of their budget-balancing effort, focusing instead on the real estate deals they earmarked as a contingency plan.

County Executive Edward Mangano said in an interview this week that negotiations with labor unions are ongoing but that the county is not relying on those efforts to bring in $61 million in revenue.

Instead, in an approach that could add revenue this year but would cut revenue in the future, the county is planning to sell land it owns and many of the leases associated with the Mitchel Field property in Uniondale. That, combined with other departmental cuts, would equal $59.55 million, according to Tim Sullivan, the deputy county executive for finance and budget.

Mangano contends that if the legislature had passed his proposed Taxpayer Relief Act, it would have empowered him to order concessions from the local unions. "The budget is not contingent on any labor savings," Mangano said.

The backup to labor concessions was always real estate transactions. Now, those real estate deals are taking more of a front seat as the county attempts to explain its 2011 budget to the Nassau Interim Finance Authority, or NIFA, which has threatened to take control of the county's finances.

But there's a built-in risk that real estate deals won't happen in a still-recovering local economy, said Desmond Ryan, who heads the Association for a Better Long Island. And prices are down, too, which would leave the county with less revenue, Ryan said.

In a letter obtained by Newsday, Sullivan detailed the real estate plans, saying the county hopes to get half the funds - $30 million - from securitizing 18 Mitchel Field leases. The letter, written this week to NIFA accountant Grant Thornton, said the county received three proposals in September. The "leading proposal," the letter said, came from RXR Realty, the Uniondale-based firm headed by Scott Rechler.

RXR, the county said, offered a $30-million up-front payment in exchange for 30 years of rental payments. Sullivan said in an interview that the leases add up to about $3.6 million a year in rent. Rechler declined to comment.

Sullivan added that the entire $30-million payment would be available as revenue for 2011.

The county still has to negotiate an agreement and have it approved by the county legislature, Sullivan said.

Beyond the Mitchel Field property, Sullivan pointed to several potential land sales.

Both Sullivan and Mangano said Monday that every deal should close this year.

"There's always execution risk," Mangano said. But, added Sullivan: "This is something we have to execute."