Huntington considers policy change to assist school districts in offsetting developers' tax breaks

The Huntington Town Board is working on creating policy to help school districts in the town offset the loss of money when developers get tax breaks for certain projects.

The board held a public hearing Tuesday to consider adding language to the town code. It would require any developer building mixed-use projects with a residential component and who is awarded a reduction in tax payments by the Suffolk County Industrial Development Agency to pay an additional fee to the school district for each year of the tax break.

Town board member Dave Bennardo said the board is using the language in a deal reached between the Half Hollow Hills school district and Steel Equities, the first developer to pitch a mixed-use plan for the Melville Town Center Overlay District, as a template.

“If you’re going to develop a multifamily complex in this town, you have to make this deal with the school district,” Bennardo said after the meeting. “To some degree it protects school districts from the inequities of PILOTS,” or payments in lieu of taxes.

On April 21, the Half Hollow Hills school board voted to approve an agreement with Steel Equities that would see the developer pay the school district an increasing amount of money over the life of a 20-year PILOT. The payment would be in addition to the school district portion of the PILOT and the full taxation amount of the ownership units in the community.

Earlier last month, the town board approved Steel Equities' proposal to build a community on 16.62 acres at the northeast corner of Maxess Road and Corporate Center Drive. The development will include about 400 units for purchase or rent, Newsday previously reported.

If Steel Equities is approved for a PILOT, the tax payment in Year 1 would be $171,515.25, with the school district getting $113,457.34 of that amount. In Year 20, the PILOT payment would be $2,066,742.99, and the district would receive $1,367,150.49, according to an agreement between the developer and the school district.

Under the agreement with Half Hollow Hills, Steel Equities also would pay the district $75,000 the first year and $149,750 in year 20. In the years between, the amount would steadily increase.

School district Superintendent John O’Farrell could not be reached for comment.

Russell Mohr, vice president of development for Steel Equities, said “it’s been a pleasure to work with the school district and we’ve come to an agreement that works for all parties involved.”

Mike Florio, CEO of the Long Island Builders Institute, told the town board the organization has “concerns” about the proposed town code legislation. He said as written, it requires developers to reach a financial agreement with a school district beyond a negotiated PILOT before they receive final site plan approval.

“In practice, this inserts a third party in the land-use approval process that gives them effective veto power for projects that otherwise would fully comply with zoning requirements,” Florio said.

Steel Equities has not yet received site plan approval. 

Dix Hills resident Lisa Bloomstein said if a PILOT is granted, it threatens to “undermine” the foundation of the heart of the community — the school district — because of the loss of tax money, while also possibly attracting new students that require services.

“I’m asking this board respectfully but firmly to stand with your constituents and request that the Suffolk County Legislature not grant PILOTS or tax abatements” that would impact the Half Hollow Hills school district, she said.

Bennardo said the code language is still being worked out and the board has 90 days to act.

“We still have some things to talk about,” he said.

By Deborah S. Morris

deborah.morris@newsday.comdsvmorris

Deborah Morris is a native Long Islander and covers the town of Huntington.