Conflict holds up tax breaks for $5M Bay Shore treatment clinic

A potential conflict of interest has deadlocked a Suffolk County agency over tax-free bond financing for a proposed health clinic in Bay Shore to treat people dealing with mental illness or drug abuse.

The board of directors of the county’s Economic Development Corp. was split 3-3 in two votes last week to approve the aid because an executive of the construction company that will build the Health and Wellness Center also serves on the board of directors of the center’s owner, Family Service League Inc.

The league, based in Huntington Station, is seeking $8.5 million in tax-free bonds for the Bay Shore clinic and other facilities. It received bonds in 2012 and 2014.

The development corporation hasn’t deadlocked or rejected an aid application in more than six years. One of the seven board members was absent from Thursday’s meeting.

Some members said the league hadn’t adequately disclosed that its vice chairman of programs, Jim Petrocelli Jr., also helps run J. Petrocelli Contracting Inc., the Ronkonkoma-based contractor selected by the league for the $5 million clinic project.

Three corporation board members said its reputation could be damaged by the potential conflict of interest despite the worthiness of the project. They suggested Petrocelli step down from the league’s 39-member board while the clinic is being built.

“You never thought from an appearance standpoint for the EDC that this would be a problem?” said Anthony Giordano, the corporation’s secretary. “You never brought it up initially . . . I am concerned about the fact there could be a conflict of interest down the road. The optics are not good.”

League president Karen Boorshtein said there was no conflict because the league, following state law, had Petrocelli recuse himself from board decisions about the clinic. She also said he wouldn’t participate in future board actions about the clinic’s construction.

Boorshtein said the league invited J. Petrocelli Contracting and two other firms to bid on the project. The former’s bid was more than $500,000 lower than the others’, and it has a signed contract with the league, she said.

Jim Petrocelli “was recused from all of this. . . . However, I will have a conversation with him about resigning from the board if it will make you more comfortable, and I know he will resign,” Boorshtein said.

Petrocelli didn’t immediately return voicemail messages seeking comment.

Theresa Ward, chairwoman of the corporation’s board, said the league “took all the steps that they needed to. They have done nothing wrong.”

Board member Kevin Harvey, former leader of an electrical workers’ union, said cost overruns are commonplace in building projects. If they occur with the clinic, he said, Petrocelli’s presence on the league board would be problematic.