In 2015, the owner of the oceanfront Superblock property in Long Beach, iStar Financial, applied for a $129 million tax break. The company pleaded to the Nassau County Industrial Development Agency that it couldn’t possibly build two 15-floor towers with 522 luxury apartments and 11,500 square feet of retail without the payment-in-lieu-of-taxes deal. Thanks to public pressure, the IDA turned iStar down, and rightfully so. If huge waterfront developments in hot locales like Long Beach can’t pay their full taxes, they don’t need to be built.
Then in 2016, iStar came back asking for a $109 million tax break for the same project, arguing again that without the abatement the project would be far too expensive. The outcry was even worse, led by former Sen. Alfonse D’Amato, who argued iStar hadn’t said a word to the city about needing tax breaks when it received zoning variances to build 50 feet higher than the rules allowed. iStar was again turned down.
Now, iStar is back, saying the magic number is $82 million in tax breaks, without which, you guessed it, the project just isn’t feasible. So, if it can be done with $82 million in breaks, the other $47 million in breaks demanded in the first plan would just have been gravy?
The process illustrates what a terrible system industrial development agencies are. That’s because it’s impossible to tell whether developers need the breaks they claim they need, or whether companies demanding tax breaks to stay in or move to an area really are sincere.
Nearly all businesses need to pay full taxes. Those few truly crucial projects creating enough benefit and needing enough help to deserve breaks must be identified and vetted by entities other than the IDAs. They are patronage pits supported by the application fees of those who want breaks and are beholden to them. Superblock makes a super case for getting rid of them. — The editorial board