Questions emerge from IDA tax break request
The MTA has purchased the headquarters of Kravet Inc. in Bethpage, seen above. The company hopes to open a headquarters in Woodbury next year. Credit: Randee Daddona
At first, it seemed straightforward — an Industrial Development Agency request just like any other.
Kravet Inc., a home furnishings designer and wholesaler based in Bethpage, wanted to move to Woodbury, and was seeking 15 years in tax breaks worth more than $217,500.
It’s the story behind the potential move that’s once again raising questions of whether IDAs are too eager to give tax breaks.
A PowerPoint presentation to the Nassau IDA this fall noted that Kravet’s current Bethpage headquarters "was recently sold under the threat of eminent domain to the MTA in connection with the 3rd Rail Project."
In follow-up questioning from Nassau IDA Chairman Richard Kessel, company chief executive Cary Kravet confirmed that reasoning, saying the Metropolitan Transportation Authority "needed" Kravet’s Bethpage property, in part because of the Long Island Rail Road’s Third Track.
Responded Kessel: "Of course, that’s an important project for Long Island as well."
There’s just one problem.
Kravet’s Bethpage headquarters is five miles past the end of the LIRR’s Third Track project, which goes from Floral Park to Hicksville.
And the MTA says Kravet’s claims aren’t true.
"This is not associated with the Third Track or the Long Island Rail Road expansion project," MTA spokesman Aaron Donovan told The Point.
Instead, the property will be used as a long-term storage facility for the LIRR’s engineering department, Donovan said.
What’s more, there was no threat of eminent domain, officials confirmed, because the building was listed for sale before the MTA considered buying it, and the price the MTA paid — $20 million — was, according to MTA documents, a negotiated price that was "the lowest amount that Seller was willing to accept for the Property."
When The Point reached Kravet, he would only say: "I think they just desired our property. It was their first choice. It was what they wanted."
Kessel, meanwhile, said the thrust of Kravet’s argument was that the company could leave and go elsewhere, since it has offices elsewhere in the country and abroad.
"Their point was, ‘We want to stay in Nassau County, we could’ve gone to Suffolk, we could’ve gone to Jersey. We want to stay here,’" Kessel told The Point. "And we do give tax incentives to help keep companies here."
Complicating matters, Kravet Inc. did first plan to go to Suffolk, even securing the promise of a tax incentives package from the Suffolk County IDA for a building in Melville. But the company then changed its plans before finalizing the arrangement, and headed to Nassau.
And during two IDA meetings this fall, Kessel seemed to welcome Kravet with open arms, even saying at one point, "We’d be glad to assist you in talking about moving some of your other operations here."
Kravet declined to comment when asked by The Point whether the company would add any jobs, or expand its operations, in exchange for the latest tax incentive package it’s now requesting.
Kessel, meanwhile, said the IDA hasn’t made a decision on the Kravet request.
Randi Marshall is a member of the Newsday editorial board.
