Developer wants to build 130 units of affordable housing at former Central Islip Psychiatric Center site

More than 100 affordable housing units could be built on the site of the former Central Islip Psychiatric Center if the developer gets tax breaks from Islip Town, an attorney representing property owner PX4 Development told Newsday.

The project site is 11 acres at 255 Carleton Ave. It was most recently owned by the New York Institute of Technology, but from 1889 until 1998, it housed an asylum where some patients underwent treatments including electroshock and lobotomies, Newsday has reported.

PX4 Development acquired the property in 2019 and wants to turn it into a 130-unit housing complex within about two years, according to the developer's attorney, John Gordon. He said the plan involves renovating three existing “cottages” on-site and constructing a new 143,950-square-foot apartment building.

The cottages would include 24 housing units — 15 one-bedroom and 9 two-bedroom — reserved for veterans and people with special needs. Another 106 units — 100 one-bedroom and six two-bedroom apartments — would be for tenants at least 55 years old.

All of the units are expected to be affordable.

Housing has been built on the site in recent years, Newsday has reported. For example, the Belmont at Eastview includes hundreds of units of luxury apartments.

Gordon said the planned affordable housing project “cannot move forward” without property tax breaks from Islip Town’s Industrial Development Authority. The agency often subsidizes housing projects if developers agree to reserve units for vulnerable populations or make rents affordable.

Islip’s five-member town board, which governs the IDA, tentatively approved a subsidy deal with PX4 last month. But key details of both the agreement and the project have yet to be hammered out.

It’s unclear what will constitute “affordable” rent, for example. While Gordon said rents would be based on New York State Homes and Community Renewal standards, they could range from less than $990 to upward of $2,400 per month for a family of two in Suffolk County, depending on the project.

The project’s tax breaks also are currently undefined. Islip’s IDA can offer sales, mortgage recording and property tax breaks. The latter is the most substantial and involves discounting a developer’s property taxes over a certain period, often about a decade.

In December, for example, Islip’s IDA granted an Oakdale apartment complex property tax breaks of nearly $1 million over a 10-year period.

Gordon said the Central Islip project is seeking a 30-year tax break. The property’s 2026 tax bill totaled $403,963.10, according to town records.

It’s also not entirely clear how long the units would remain affordable. When asked, Gordon wrote that “affordable developments of this type are subject to regulatory agreements which typically require the units to stay affordable for a minimum of 30 years.”

Islip IDA Executive Director John Walser said all of those details will be sorted out once the developer’s commissioned “financial analysis” study is completed and submitted to the town. The IDA will consider a final, fleshed-out subsidy deal after that.

About the timeline for the study and final vote, Walser said, “I doubt it will be this month, but it may.”

Gordon told Newsday that if the IDA grants the tax breaks, “we are on schedule to start construction in the fall of 2026. We estimate completion of construction in 18 to 20 months.”

By Sam Kmack

sam.kmack@newsday.com

Sam Kmack covers the Town of Islip for Newsday. He is a graduate of the University of Southern California and previously worked as a city watchdog reporter in the Phoenix metro area, as well as an investigative journalist at the Arizona Center for Investigative Reporting.