A real estate developer is asking the Nassau County Industrial Development Agency for an additional 10-year tax break on a building it struggled to fill over the past decade.
Blue Cassel Commercial Realty of Queens owns the four-story, 19,740-square-foot building with 57 apartment units and retail space on the first floor at 701 Prospect Ave. The building opened in December 2008 and Blue Cassel received a 10-year Payment in Lieu of Taxes (known as a PILOT). According to the PILOT documents, Blue Cassel received exemptions on property taxes and paid $60,211 total in the building's first year. The payment went up slightly every year thereafter until it paid $143,829 last year.
Officials with Blue Cassel appeared at a recent Nassau IDA board meeting and said the company needs another decade of tax breaks to entice businesses to fill vacant retail space.
“Blue Cassel has had tremendous difficulty in leasing it [the retail space] up over the years,” said Michael Guerriero, a Mineola-based attorney representing Blue Cassel. “In fact, in the first few years, they really didn’t have any tenants.”
Guerriero told the IDA board that the development, also known as The Gateway to New Cassel, has most of the apartments filled and some of the retail units leased, but 4,000 square feet of retail space hasn’t been filled since the building opened.
IDA board member Timothy Williams asked Guerriero why the board should award another 10 years of tax breaks if the developer couldn’t fill the space before.
“My concern is that your exact past history doesn't really suggest you have the ability to do it,” Williams said. “You’ve had 10 years.”
Guerriero said another 10 years with tax abatements would allow Blue Cassel to keep monthly rent low for possible retail tenants.
“Without this form of relief, it’s going to be very very difficult for Blue Cassel to maintain this commercial project that supports all the residents,” he said.
According to IDA documents, Blue Cassel invested roughly $2.6 million in The Gateway building since it was built. Total project costs were listed in 2006 as $21.52 million.
IDA officials are negotiating with Blue Cassel on the terms of a new 10-year PILOT, but the agreement still needs board approval. The next IDA meeting is Jan. 17.
The board has an obligation to do whatever it takes to make The Gateway successful, chairman Richard Kessel said.
"If the IDA walked away from it, the entire project could collapse and that's the last thing New Cassel needs right now," Kessel said. "There's a greater good here in trying to help a challenged community."