Town of Hempstead calls PILOT an ‘insult’ to taxpayers

We had two public hearings –– one in the Town of Hempstead and one in Valley Stream. Nobody showed up.”

FRED PAROLA Executive director, Town of Hempstead IDA

The Town of Hempstead supervisor and a councilman sent a letter to the town’s Industrial Development Agency on Sept. 30 demanding that the Green Acres Mall tax break hearing be reopened, so residents can have their voices heard in the decision-making process.

“We have been contacted by area taxpayers, and are deeply troubled to hear that the IDA did not perform a fiscal impact statement detailing the average prospective impact of the agreement on affected homeowners,” the letter from Supervisor Anthony Santino and Councilman Bruce Blakeman read. “Furthermore, it is an insult that any IDA agreement would make local property taxpayers shoulder such a heavy share of the tax burden to benefit wealthy mega-developers.”

The IDA approved the tax break — in the form of PILOTs, or payments in lieu of taxes — two years ago, to foster economic growth in tandem with the mall’s expansion project. During the 15-year payment plan, the mall will come off the county’s tax rolls, beginning this month. In the first year of the PILOT plan the mall’s payments will total approximately $14 million. According to the Nassau County Department of Assessment, the mall’s tax bill this year was roughly $15 million.

As a result of the PILOT, taxes will likely increase in all three Valley Stream elementary school districts to varying degrees, but for different reasons.

Each elementary district must pay a portion of the Central High School District budget, based on the taxable property in that elementary district. Because the mall is coming off the tax rolls, District 30’s payment to the Central High School District will shrink, and that shortage will be redistributed across District 13’s and District 24’s properties. The average tax bill is projected to increase by 4.6 percent this year in District 13 (about $324), and by 5.2 percent in District 24 (about $322).

Because the PILOT affects District 30 directly, however, the district’s average tax bills are projected to increase the most over last year, by about 12.2 percent, or $758, according to the county assessor.

The shift to PILOT payments this year will not affect the tax revenue the schools collect, but will shift the financial impact of the mall’s tax exemptions across the different classes of properties. In Nassau County, there are four classes of property, each with its own tax rate: Class 1, single-family homes; Class 2, apartments and condominiums; Class 3, utility company properties; and Class 4, commercial properties. Each fall, the county determines how much of the overall tax burden will be borne by property owners in each of the four classes.

“While previous reports on this project were encouraging and offered great promise in the areas of job creation and economic stimulation, the adverse effects of the agreement on local taxpayers was not shared with us or Valley Stream neighbors,” the town letter reads. “As such, we must strongly disavow any previous statements of support or encouragement.”

Fred Parola, executive director of the Hempstead IDA, said the agency couldn’t reopen the PILOT hearing because the payment plan was finalized two years ago. “We had two public hearings –– one in the Town of Hempstead and one in Valley Stream,” he said. “Nobody showed up.”

“If we didn’t provide them benefits to the level that we did … the taxes would have been worse on homeowners…,” Parola added. “Green Acres Mall was threatening to go belly-up.”

The District 24 Board of Education will host a forum on the issue at its next regular meeting, on Oct. 19 at 8:30 p.m. Representatives of the Town of Hempstead IDA, neighboring school communities and elected officials have been invited to attend.

How do you feel about the Green Acres Mall tax break? What do you think needs to happen next? Send letters to the editor to nciccone@liherald.com for consideration.