Developer seeks tax breaks for Port Jefferson Station housing, retail development

An Islandia-based developer is seeking millions in tax breaks to help build a $190 million housing and retail development at the site of the former Port Jefferson Plaza shopping center.

Staller Associates Realty Inc. applied for up to about $7 million in sales and mortgage tax exemptions and 25 years in tax breaks from the Brookhaven Industrial Development Agency, which agreed to consider the application on Wednesday.

The new housing and retail complex would create more than 90 jobs and help revitalize the area, Staller Associates estimates, but some residents oppose letting the developer use public subsidies for the project.

The development would include 280 apartments within two buildings, with 56 units set aside for residents with intellectual or developmental disabilities. Residents would receive assistance from the nonprofit service provider Young Adult Institute, according to the developer's IDA application.

Staller Associates would also build seven retail buildings designed for smaller restaurants and independent businesses — not big box stores, Valentin Staller, vice president of Staller Associates, told Newsday on Friday.

"Our shared vision, with the town and community, is that our project Jefferson Station will really help to kickstart a revitalization of this Route 112 corridor south of the Port Jefferson train station," Staller said. "My dad and I are both long-term residents of the town and we want to help it thrive."

The development would also include a 5,000-square-foot "technology-focused collaboration hub" for Stony Brook University engineers and local engineers to work on projects and meet with investors, Staller added.

The request for tax breaks comes four years after Staller initially pitched redeveloping Jefferson Plaza — one of Long Island's oldest shopping centers — and after the objections of some residents concerned about the project's sizeand how it would impact traffic, Newsday reported.

All the retail stores will be single-story buildings, and one residential building will be three stories tall, Staller told Newsday. The other residential building will rise four stories, with three stories along Route 112 with a setback, distancing the fourth story from the road, he added.

Staller said the development, which secured a key zoning change in September 2024, would be a "major community asset" and help reshape the area.

That revitalization is one of the reasons why Town Councilman Jonathan Kornreich, who represents parts of northwest Brookhaven including Port Jefferson Station, said he was strongly in favor of the project.

Kornreich expected the development to become "a jewel in Port Jefferson Station" that will "revitalize an area in the way that community deserves."

But he did not support the use of tax benefits.

"When we are giving tax breaks, essentially what we're doing is asking members of the public to share some of the cost — even if it's temporary — because there is a clear public benefit," Kornreich said. Although the project will create new retail jobs, "to me, it doesn't rise to the level of something that the public should have to support economically."

Ira Costell, president of the Port Jefferson Station/Terryville Civic Association, said that he was cautiously optimistic about the project, and said it was laudable that the developer planned to include units for residents with disabilities. But he stressed that parts of the development — such as the traffic impacts — still needed to be studied.

Costell added that, while he did not speak for the entire community, he was skeptical as to whether the tax incentives were necessary.

"When you're a business person, you pursue whatever is available to you to make the maximum profit," Costell said.

Staller said that the developer needed the IDA assistance to secure financing — adding that without the IDA incentives, it couldn't be built.

The steel and concrete buildings, civic plaza, innovation center, affordable housing and retail space for independent merchants will create a number of jobs, but are all costly to build, he added.

"We're also creating a significant number of [jobs] which certainly is something that the IDA tries to incentivize."