Hempstead IDA passes initial approval for apartment tax breaks

Developer: We can’t build under this PILOT agreement


The Hempstead Industrial Development Agency gave a tentative OK on March 30 to tax breaks for an apartment complex in Barnum Island, but the developer said it would not be financially possible to build under the terms of the current agreement.

Waterview Land Development LLC, led by Island Park businessman and property owner John Vitale, is seeking to construct 26 one-bedroom and 60 two-bedroom units at Waterview Road and Pettit Place, the former site of Paddy McGee’s and the Coyote Grill, which were both devastated by Hurricane Sandy. Vitale, who also owns Jordan’s Lobster Farms, Bridgeview Yacht Club, the Loft, and the King Kullen property in Island Park, told the IDA that the project would help revitalize the area.

“I truly believe this development will be the determining factor in the future of Island Park,” Vitale said. “If anyone has driven through our village, they are aware of all the vacant storefronts and the sadness this imparts on people . . .”

The IDA gave the developer preliminary approval of a 10-year payment in lieu of taxes, or PILOT, program for the $31 million project last August, but progress was halted as the developer waited on site plan approval from the Town of Hempstead. The town has since approved the plan, but because taxes have gone up from last year, a new PILOT agreement proposed last week would require Waterview to pay an additional $800,000 over 10 years. In addition to the PILOT, the tentative agreement includes a mortgage-recording tax abatement and a sales tax exemption.

Vitale, along with Waterview’s attorney, Peter Curry, of the Uniondale-based firm Farrell Fritz, told the IDA officials that the additional payments in the revised tentative agreement would make it financially impossible for them to build.

“Gentlemen, it’s 86 units,” Curry told the board. “You understand the impact of $800,000 on 86 units of rental housing. It’s catastrophic.”

Reopening Bridgeview and Jordan’s within a few months after the storm, Vitale said, gave the community hope of recovery. He determined it would make more sense to repurpose his remaining land, and added that the proposed additional housing would provide further faith that a “renaissance” is possible in Island Park.

Attracting residents to the village is difficult due to a limited housing stock and fear of another storm, Vitale said. Because there is no other housing like what he is proposing on which to base how such an apartment complex would fare, Vitale said, he “could not generate any enthusiasm” for developers to build on the site, and took matters into his own hands. “I believe that no other builder will pour his heart into a single project like this like I would,” he asserted. “I love Island Park.”

The complex is estimated to be 100,000 square feet — 86,000 square feet being rentable — and 10 percent would be set aside for affordable workforce housing. The rental units would be elevated and safe from flooding, Vitale said.

Waterview secured financing for the project based on the previous PILOT agreement, and is ready to build — a process that is expected to take about three years. But Curry emphasized to the board that the project could not be undertaken based on the agreement being voted on.

“What’s before us is before us,” said William Hendrick, IDA vice chairman and Lynbrook’s mayor. “We’re listening to you, but we can’t vote on something, or give you some kind of a guarantee that we’re going to change it, right now sitting here.”

“Do you accept that?” he continued. Curry, seemingly not pleased, said he did. “Good, because if you didn’t, I’d say you have to,” Hendrick laughed. The board voted, 5-0, to preliminarily approve the PILOT and tax abatements. IDA Chairman Arthur Nastre, who had reportedly represented Vitale in other matters, did not vote.

Michael Raniere, an attorney for the Island Park School District, asked the board to take into account the impact of tax reductions on the other residents of the district.

“The Island Park School District is concerned that a PILOT granted to Waterview Land Development LLC in connection with its proposed development of residential rentals on Barnum Isle will have an adverse impact on the other taxpayers within the district,” a district statement read. “We are especially concerned with the requested reduction in taxes, while at the same time the project may lead to increased student enrollment. Any tax reductions received by Waterview Land Development LLC will result in increases to the other district taxpayers.”

The IDA, according to its policy, would freeze the current taxes for the first three years of the PILOT and increase the payments incrementally through the 10th year.

Island Park resident Jacqueline Horvath, who was not at the meeting, claimed afterward that the developer could afford to construct the complex without the PILOT, and added that the village needs families that would add to the tax base instead of those living on tax exemptions. She also countered the developer’s claim that residents of the complex would frequent local businesses, saying it is “not really walkable” to Long Beach Road, and that “if you’re in your car, you’re not stopping at our mom-and-pop pharmacy. You’re going to CVS.”

“There simply is no reason to offer a tax abatement to the best piece of property in town,” Horvath told the Herald. “We need to save our tax incentives for developers that can help improve our main street. We must be selective, as our tax dollars are stretched way too far already.”

Nassau County Legislator Denise Ford and Island Park Mayor Michael McGinty said last week that they thought the apartment complex would improve the area, but were unsure whether the tax breaks were reasonable or not.

The terms of the PILOT agreement can still be changed, IDA officials said, as the vote was only preliminary. A public hearing is expected within the next couple months at Hempstead Town Hall.