Glen Cove voted down a tax break. A developer went to Nassau County — and won.

Glen Cove officials met nearly a year ago to review a developer's bid for $2 million in tax breaks — spanning 15 years — to build an apartment complex in the city's downtown.

The vote failed. 

The 29-unit proposal would yield only one full-time, permanent job, members of the city's Industrial Development Agency said. It was not enough to justify a deal for a 15-year PILOT, or payment in lieu of taxes, city officials said.

“We just don’t feel it’s worthy of a PILOT,” said Glen Cove Mayor Pamela Panzenbeck, a Republican who cast one of five no votes, during the meeting on March 13, 2025.  Only one board member voted in favor.

The project’s attorney raised his hands and shook his head while the votes were being tallied.

“This project can’t happen without this,” said Daniel P. Deegan, the lawyer for the project's developer, Alec Ornstein. “I’m really blindsided.”

Later in the year, the developer won the 15-year PILOT. But the approval came from an entirely different IDA — Nassau County's.

The city's mayor and IDA's executive director described the shift from the city to county IDA as "unusual" in a recent interview. But the decision to go before a separate IDA board — a process some critics refer to as “IDA shopping" — is legal, municipal analysts said. The relief has prompted criticism and questions about Long Island's patchwork of IDAs and how millions of dollars in tax relief are awarded. Can a county overrule the will of a town or city?

Across the state, there are more than 100 IDAs empowered to grant tax relief to encourage economic development. They are in large part funded by developer fees. On Long Island, five towns as well as the City of Glen Cove run IDAs, causing overlap with Nassau and Suffolk counties, which also operate them. Critics say these conditions distort incentives for tax relief and encourage developers to play agencies off one another. 

$356,509

The city's IDA approved sales tax exemption for the project

“This shouldn’t happen,” said Greg LeRoy, executive director and founder of Good Jobs First, a Washington, D.C., government spending watchdog. “If a local government has rejected a project as being inappropriate ... then no, another body should not impose that project."

The episode has heightened concern over tax relief that's granted to residential developments. IDAs were established under a 1969 state law to spur long-term job creation. Tax breaks for housing bring fewer permanent jobs than, say, aid to commercial and industrial projects, critics argue.

Danielle Fugazy Scagliola, a Democrat on Glen Cove City Council, said the city's authority was usurped: “I feel frustrated that the Nassau County IDA would take this stance against the Glen Cove IDA,” she said in a recent interview.

City officials said they expected the applicant to return with a counterproposal for a shorter term. Glen Cove's IDA approved a sales tax exemption on the property last September, which totaled $356,509.

Sheldon Shrenkel, CEO and executive director of the Nassau IDA, said in a statement last month his agency analyzed Ornstein's application “in accordance with its policies, procedures and methodologies.” 

“We cannot offer any comment on the processes used or the decisions made by other IDAs,” Shrenkel said in a statement.

But on Tuesday, a communications firm shared with Newsday a joint statement from both IDAs, suggesting the agencies were aligned. The firm, ZE Creative Communications of Garden City, represents the county's IDA, but not Glen Cove's.

An "official joint statement" from both IDAs said the two agencies worked "cooperatively, transparently, and in a manner consistent with each IDA’s statutory authority and mission to promote responsible development, job creation, and long-term economic growth."

Asked about the statement on Tuesday, Panzenbeck said in an interview: "Whatever. I mean, they did one part of the PILOT; we did the other part of the PILOT."

Asked whether the efforts were coordinated, Panzenback said: "No comment, OK? That's all."

A scaled-back proposal

The $12.5 million project would replace a vacant auto body shop on Glen Street near the downtown, about a half-mile from the Long Island Rail Road station. Four apartments would be set aside as "affordable," or for households making 80% of the area’s median income. Another two units would be for households making 130% of the median income. 

The three-story building from real estate developer Ornstein has faced roadblocks in the past.

In 2017, the council cited density concerns in its decision to reject Ornstein Development's proposal for a 39-unit complex. The plan was scaled back, and in 2024, city council approved a 29-unit plan.

A PILOT waives property tax requirements and establishes a fixed payment schedule. The revenue is distributed to local taxing jurisdictions, including the city and school district.

According to Ornstein's application to Glen Cove, the 15-year PILOT would have saved more than $2 million in property taxes through 2039. That's about a 50% savings over the term, the application shows. Deegan said the plan approved by the county's IDA was essentially the same. The Nassau PILOT will save the developer nearly $1.1 million, according county IDA documents. That figure accounts for inflation, Deegan said. A Glen Cove projection, using a similar metric, was nearly $1.4 million, city documents show.

The Nassau County IDA deal granted a mortgage tax exemption of up to $71,250. The developer is expected to pay $1.95 million over the 15-year PILOT, IDA documents show.

$1.1 million

The Nassau County IDA's reported savings projection

Despite the initial rejection, city officials said they do not plan to block the project. The developer needs a building permit from the city. Panzenbeck said the developer has yet to file for one.

According to the developer's website, the proposal would serve as a "shining new addition to the City’s downtown, providing housing opportunities for young people as well as empty-nesters seeking a maintenance free life-style."

Ornstein has developed multiple projects on Long Island, including several Vineyards complexes in Suffolk. Ornstein previously served as president and board chairman of the Long Island Builders Institute, a trade group, and co-chaired its political action committee. 

In September, Ornstein, a registered Democrat, donated $2,000 to Republican Nassau County Executive Bruce Blakeman's campaign for reelection. A spokesman for Blakeman did not respond to a request for comment about the donation. Deegan noted Ornstein has donated to officials from both major political parties. 

'Needed that' PILOT 

 There are eight IDAs on Long Island, including Glen Cove's along with the towns of Babylon, Brookhaven, Hempstead, Islip and Riverhead.

In Glen Cove, there are no residential projects operating under 15-year PILOTs, said Ann Fangmann, executive director of Glen Cove's IDA, in an email. 

Glen Cove has tended to grant tax breaks to residential developments, which produce fewer jobs, Fangmann has said.

Ron Deutsch, a senior policy fellow for the government watchdog Reinvent Albany, said IDAs were built to spur economic development. Awarding tax relief to developers in hot housing markets — such as Nassau's, he added, "is absolutely shortsighted."

"It makes absolutely no sense to give property tax breaks to housing developers that are building in areas that have a high demand for housing," he said in an interview. "The developer doesn't need to get property tax breaks in order to build and make a profit."

$71,250

Nassau County IDA's mortgage tax exemption

Deegan said  after the Glen Cove IDA voted down the application, he decided to move the request to Nassau.

“We needed that 15-year PILOT,” Deegan said in an interview. "We know their policies are consistent with a 15-year PILOT for downtown and affordable housing projects.”

Fangmann, in a phone interview, said the board was open to awarding a PILOT but preferred a shorter term. 

"Ultimately what the applicant felt is that they wanted to go elsewhere, and they did," she said.

Reggie Spinello, a member of the Nassau County IDA board and a former mayor of Glen Cove, said Nassau's IDA typically looks to be aligned with a town or city's IDA.

“If I thought that we were stepping on their toes, I wouldn’t have voted on it,” Spinello, a Republican, said in a phone interview. “If there were real concerns, I would have assumed I got a call from people."

'A chronic problem'

IDA shopping “is a chronic problem in a number of metro areas and jurisdictions in New York State," said LeRoy, of Good Jobs First. 

When there are multiple IDA boards that can grant tax breaks, developers have an incentive to seek the best deal out there.

"People can go shopping, and I think that's crazy," LeRoy said. 

A proposal in the State Legislature seeks to bar county IDAs from giving tax breaks in municipalities that run their own IDAs. 

Assemb. Michaelle Solages (D-Elmont), a sponsor of the bill, said the idea is to allow the IDA “closest to the people” to grant economic benefits to developers. That would eliminate competition among boards, she said in an interview.

"This is taxpayer money that we have to be very careful with,” Solages said.