IDAs should dole out tax breaks wisely

This is the tale of two requests for tax breaks.

Together, they also tell a larger story of the difficulty of doing business on Long Island, the byzantine nature of how economic and job growth here is incentivized, and the willingness of industrial development agencies to hand out financial benefits like Halloween candy.

Milvado Property Group is a Syosset-based owner of 14 buildings mostly located in Hicksville and used as factory, warehouse and office space. Milvado already has an ongoing tax break from the Nassau County IDA that won't expire until 2029. Now, it's seeking 30 more years and millions of dollars in additional savings.

What will Milvado, which separately has received tax breaks on a property in Ronkonkoma from the Suffolk County IDA, do with that windfall? It'll make some building improvements and comply with state greenhouse-gas emissions laws, the company says, even while noting that some of its tenants are expected not to renew leases expiring soon as demand for office space declines.

For that, they should get tax breaks until 2059? There is no economic landscape in which that makes sense.

The other request involves Bristal Assisted Living in Westbury, which received tax breaks that expired in 2017 from the Nassau IDA. B2K Development is hoping to buy the Westbury complex, and is seeking a new 15-year tax incentive package. In return, B2K is offering to add eight jobs and reserve 20% of the 180 units in this facility for seniors earning 50% or less of Area Median Income. That's an income cap of $53,900 to be eligible for a unit, which is reasonable and much-needed.

That pledge is critical to meeting Long Island's housing needs, especially for seniors who hope to sell their homes and move to assisted living, which could in turn open up supply for younger buyers. Bristal has shown the concept works, as it has similar affordable apartments set aside in other locations. This, too, is an imperfect IDA deal, but the end goal may make it worthwhile.

IDA officials like to talk about the “but for” test — the idea that “but for” the tax breaks, a company would leave, or stop efforts to add jobs, expand and otherwise boost the broader economy. The Milvado deal fails that test. While IDA officials expressed some doubts about the proposal, they also unanimously approved a resolution allowing the IDA to negotiate with the company. That's a waste of time and resources.

The Bristal proposal does seem to meet the “but for” test, while also doing something more significant: making a small dent in the Island's housing crisis. Even 36 units of truly affordable assisted living housing can be a key piece of a larger puzzle.

These two applications illustrate the problems with IDAs but also the role they can play in growing Long Island's economy and increasing its housing stock — if they make the right deals and reject the wrong ones.