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Nassau IDA votes down iStar tax break

Board denies request for $109 million PILOT to develop Superblock

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The Nassau County Industrial Development Agency last Thursday denied iStar Financial’s request for $109 million in tax breaks to build two oceanfront towers — two days after the Long Beach Board of Education voted against supporting the potential developers of the city’s Superblock.

The $336 million project envisions twin 15-story luxury apartment buildings between Long Beach and Riverside boulevards, and iStar, a Manhattan-based developer, sought a hefty 20-year payment in lieu of taxes, or PILOT, agreement, claiming it would not build without it.

“This application was the most examined, pulled-apart, parsed and vetted of any application we’ve had,” said Joseph Kearney, executive director of the Nassau IDA. “The board determined at the end of the day that the financial assistance that the applicant was requesting wasn’t warranted in this circumstance.”

The decision came after a two-year process that included two heated public hearings in Long Beach, where many residents expressed vehement opposition to the height and density of the project, and to the proposed tax breaks. The IDA also rejected iStar’s application for a $129 million PILOT over 25 years in 2015.

After the board’s 3-2 vote, about 200 neon-color-clad union supporters — who had advocated for the jobs the development would create — let loose a barrage of boos and stormed out of the Peter J. Schmitt Legislative Chamber in Mineola. Across the aisle of the packed room, many Long Beach taxpayers applauded the board’s decision.

“This [would have been] a win-win for Long Beach all the way around,” said union supporter Robert English, of Wantagh. “Between the men working there, which would have pulled Long Beach out of the deficits that they keep saying they’re in now, not to mention as the people move in, all the cash flow that would have come, over time, they would have made more. I think Long Beach cut their nose off to spite their face.”

The two IDA members who voted to approve the plan were union representatives Michael Rodin and Chris Fusco. Rodin said before the vote that iStar’s proposed development was a great project for Long Beach, Nassau County and middle-class working people.

“Long Beach is the middle class,” said Ray Ellmer, a longtime city resident and former zoning board member who was relieved by the decision. “We’re firemen, we’re policemen, we’re teachers, we’re the middle class, we’re working and we pay our taxes. We have nothing against unions … but our tax dollars should not be supplementing their paychecks.”

Ellmer added that he believed the project would have hurt the school district and the city’s infrastructure, and that it wasn’t fair of iStar to try to burden taxpayers. He noted that other developers looking to build in Long Beach are not seeking tax breaks, and cited as an example Wittek development, which hopes to build two 12-story condominium towers along the boardwalk at the site of the Hebrew Academy of Long Beach.

An economic analysis released in May by the consulting firm Camoin Associates found that the Superblock project would generate $269.7 million in construction sales, mainly in Nassau County, as well as 1,251 construction jobs and nearly $119 million in wages. Long Beach would see an average annual net benefit of just $12,239 over the next 20 years, according to the report, but the gains would not kick in until later in the PILOT schedule. The county would rake in an average net benefit of $236,507 per year over the course of the tax breaks.

The six-acre Superblock lot has been vacant for 30 years. Following the vote, iStar did not comment on what its next move might be.

“I’m happy with the decision — I think that this is a good decision for the resident taxpayers and the city of Long Beach, as well as the school district and the county,” said County Legislator Denise Ford, a Long Beach resident. “We kept saying to the unions that even though we were against the tax giveaway, it was very hard not to side with the unions on this, and we do hope that any future work at that site is done with union labor.”