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State: Hempstead IDA, Valley Stream School Dist. 30 in audit

The state audit will examine tax breaks granted

The state audit will examine tax breaks granted to the Green Acres Mall in Valley Stream, shown Oct. 27, 2016. Credit: Danielle Finkelstein

The state comptroller’s office has launched an audit of the Hempstead Town Industrial Development Agency and Valley Stream School District 30 in response to criticism of tax breaks granted to the Green Acres Mall, Comptroller Thomas DiNapoli said.

The effort, announced Monday, comes months after several elected officials first sought DiNapoli’s involvement. Since then, two IDA boards, four school districts, hundreds of Valley Stream taxpayers, and about a dozen state and local lawmakers have become embroiled in a controversy over the mall’s tax incentives that have been blamed for steep tax hikes for residents.

IDA officials say District 30’s budgeting practices are part of the problem and the agency’s current board is considering revoking the tax breaks.

IDA board Chairman Arthur Nastre said in a statement Monday that the state audit “likely will” affect the agency’s timetable on its decision to potentially revoke the tax breaks.

“It would be illogical to make any decision on a revocation while an audit is pending,” Nastre said.

“The Green Acres project has drawn noticeable criticism in the community,” DiNapoli said in a news release issued Monday, noting there is no timeline for completion of the audit. “As a result, our auditors determined there were sufficient questions about the project that warranted a closer examination.”

In 2014, the previous IDA board granted tax breaks to Macerich, the Valley Stream mall’s California-based owner, for $79 million in renovations to the mall and the construction of the Green Acres Commons, a shopping plaza adjacent to the mall.

Ken Volk, senior vice president at Macerich, said in a statement that “the Green Acres Mall project creates 670 construction jobs, more than 800 permanent jobs, and significant local sales tax revenue. We have always supported transparency in this process so we welcome and look forward to the Comptroller’s audit.”

In October, Nassau County Comptroller George Maragos opened an audit into the deal. IDA and town officials have fought Maragos, who is running for county executive, in his attempts for documents about the tax breaks, saying that only the state has the authority to audit an IDA.

“We are delighted” about the state’s audit, IDA executive director Fred Parola said in a statement.

School districts and IDAs are often subject to routine state audits. The Hempstead Town IDA is also part of an ongoing statewide IDA audit into IDA board governance, state comptroller’s spokesman Brian Butry said. While the audit announced Monday is specific to this case, Butry said it’s not unprecedented.

State auditors will examine District 30’s “budgeting practices and the resulting property tax levy related to the Payment in Lieu of Taxes [PILOT] associated with the Green Acres Mall project,” DiNapoli said in the statement.

At the IDA, the state will focus on “compliance with policies and procedures related to approval of the Green Acres Mall Project.”

District 30 Superintendent Nicholas Stirling said in a statement Monday that school officials are aware of the state audit.

“As with past routine audits, the district will fully comply throughout the process and will provide all necessary documentation to audit officials,” Stirling said.

State Sen. Todd Kaminsky (D-Long Beach) and Assemb. Michaelle Solages (D-Elmont) were the first lawmakers last fall to ask the state comptroller for an audit. On Monday, they lauded DiNapoli’s actions and pressed the current IDA board to overturn the tax breaks.

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