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Developing Long Beach's Superblock site

The Superblock property is on Riverside and Long

The Superblock property is on Riverside and Long Beach boulevards in Long Beach. Credit: Newsday/Alejandra Villa Loarca

The plan by developer Engel Burman to build 200 condos and 238 apartments on the oceanfront Long Beach site known as the Superblock, along with a 1,000-slot parking garage and 6,500 square feet of restaurant and retail space, comes with a caveat residents have heard before.

Engel Burman’s application to the Nassau County Industrial Development Agency says “the applicant cannot proceed if the agency does not approve this application” for the payment in lieu of taxes that the company requested for $52 million over 30 years on the apartments and parking garage.

That’s similar to what previous developer iStar said about its 2015 plan to build 522 apartments with a $129 million tax break. And what iStar said in 2016 about a $109 million break after that first try went sour thanks to an outraged public, just as its second try later did.

A video-conference hearing on the PILOT was scheduled for Tuesday but postponed Monday. IDA Chairman Richard Kessel said the city has concerns about whether the deal works financially for Long Beach. The postponement allows Long Beach to look at the numbers, and should let the IDA schedule a hearing where people can be informed, and heard.

Kessel says the IDA won’t approve the deal unless the city is on board, and he says he already knows 30 years is too long for the abatement, but could support 25.

It hardly seems credible that oceanfront luxury apartments can’t charge enough in rent to allow the owners to pay their fairly assessed taxes. The request for a reduction also contradicts what developers and pro-development politicians have told Long Island’s anti-apartment NIMBYs for decades: that the only way to control spiraling property taxes is by broadening the tax base via development. That argument breaks down if developers of rental properties now claim they can’t build without the reductions.

But it makes sense that developers would demand tax breaks, crucial or not. The breaks are free money, and the deciders, the IDAs, pay their bills via the application fees for the reductions. If IDAs got in the habit of rejecting the pleas, the fees would suffer.

The $52 million Engel Burman wants works out to a subsidy of a shocking $218,487 per apartment. It’s also probably much lower than the break would be, because developers figure the size of such breaks by assuming tax bills will go up around 2% each year. But in cash-strapped Long Beach double-digit increases are not unusual, and now the school district and county are facing huge pandemic-related financial needs that could demand big tax hikes, too. Larger increases than projected would not increase the amount of any agreed-upon PILOT payment, instead increasing the size of the break.

The site needs to be developed. But the taxpayers of Long Beach should not have to shoulder the tax burden for luxurious and expensive oceanfront apartments.

The city may be realizing that. The residents should, too.

—The editorial board