If there was ever a company that demonstrated greed, it would be iStar. If there was ever a city government that demonstrated a lack of openness and morality, it is the officials of the City of Long Beach. Greed on the part of a developer is nothing new, but we expect our government officials to protect the interests of the people.
A hearing on iStar’s requested change of zoning for its project on Long Beach’s six-acre Superblock was held in February 2014, but residents weren’t informed that the City Council and city manager, along with the city’s corporation council, had sold them out by secretly agreeing to support the construction of two 17-story towers, seven stories taller than any other buildings in Long Beach.
Both parties agreed to keep the terms of the settlement secret. The city agreed, “The Parties shall not discuss the terms of settlement with third parties, but may only inform the media or legal community that the Parties have amicably resolved the outstanding litigation.” The agreement called for the city to be paid $5.25 million, and to support the change of zoning and iStar’s application to the Nassau County Industrial Development Agency for a payment in lieu of taxes, or PILOT, arrangement that the public was not informed of.
The Long Beach City Council recently announced that it will hold another public hearing on May 9 regarding another PILOT request made by iStar to the IDA for the Superblock development. The Manhattan-based developer is attempting for the third time to receive a large tax abatement in order to build luxury apartment towers at the site.
The first two attempts were met with outrage from the public, and were denied. But iStar is still trying to make a run at it, and is being aided by an administration in Long Beach that has violated every conceivable standard of honesty by not telling people that it secretly agreed in a court settlement to support iStar’s application to the IDA for tax relief. No wonder people have disdain for elected officials — particularly when they sell out the interests of taxpayers for their own political or economic gain.
This deal was conceived by Michael Zapson, the political hack who was the Long Beach Democratic Party boss, along with City Manager Jack Schnirman, who were able to persuade their cronies on the City Council to support the secret settlement.
When iStar appeared before the Long Beach Zoning Board of Appeals three years ago, the developer claimed that it had the financial wherewithal to cover the entire cost of the project, and was ready to begin within 90 days of the board’s approval. At no time did iStar executives indicate that the project was subject to financial assistance from the IDA. Quite the contrary: They bragged about their financial capabilities, claiming they would make a 13 percent profit.
What changed? The answer is greed, and the opportunity to make more money.
After an extensive period of time with no action, iStar came back to the IDA and stated that the deal between it and the City of Long Beach hinged on the approval of the PILOT program. The developer was seeking an estimated $129 million property tax exemption.
This request was met with strong opposition from the people of Long Beach at a public forum. In response, iStar withdrew its application and submitted another one, this time for $109 million. Once again, the people of Long Beach stood up against the egregious tax giveaway in another public hearing. Now iStar is back for a third time, and is asking for $89 million in tax breaks.
So the company has admitted that it was asking for $40 million in taxpayer money that it never needed! How can the people of Long Beach believe anything iStar executives say? It is obvious that they are basing their calculations on the secret deal made with the City Council. Because of that deal, iStar feels entitled to tax relief — and entitled to build two towers that are 70 feet higher than any other buildings in town. This project would set a precedent for overdevelopment in Long Beach.
Why should the city’s residents support an application that comes from executives that have demonstrated that they are strangers to the truth? The Long Beach City Council should repudiate this repugnant agreement, and not attempt to continue to hoodwink the people.
Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.