Incentives abound as Nassau IDA, LEAC plug away

High praise: Uniondale's private Kellenberg Memorial High School has earned the attention of the Nassau County Local Economic Assistance Corp.
By GREGORY ZELLER //

It’s full steam ahead in Nassau County’s economic-development wing, where the coronavirus can’t slow the works.

The Nassau County Local Economic Assistance Corp. and the Nassau County Industrial Development Agency have pressed forward with a number of jobs-creating, economy-sustaining bond sales and incentives packages, helping top international franchisers, regional schools and others keep on keeping on during and after the great pandemic of 2020.

Right at the top: The IDA’s preliminary approval of an economic-incentives package – including upwards of $500,000 in sales-tax exemptions and a 15-year payment-in-lieu-of-property-taxes agreement – that would keep 1-800-Flowers.Com’s global headquarters in Nassau, along with 375-plus full-time jobs.

The IDA has also greenlighted “an amended package of economic-development incentives” for Twenty-Six Sunset LLC, developer of Jericho’s new 93-room Marriott Residence Inn, while the Nassau LEAC has endorsed a $10.2 million bond-financing plan for an expansion of Uniondale’s private Kellenberg Memorial High School and a bond-refinancing strategy benefitting a Seaford-based private special-education school.

Richard Kessel: Putting IDA’s chips on “blue-chip” retailer.

All four projects received preliminary approvals at videoconferenced IDA and LEAC virtual meetings held April 7, and are still subject to full agency reviews – and public hearings, possibly virtual also – before final approvals.

But each checks off the right boxes, providing jobs creation and other regional socioeconomic advantages, according to Richard Kessel, who doubles as chairman of both the IDA and the LEAC and is particularly fond of the effort to keep a “globally recognized blue-chip company … headquarter[ed] in Nassau County.”

Based in Carle Place for the past 15 years, 1-800-Flowers.Com has been “weighing” a potential relocation out of New York State, according to the IDA. It wouldn’t mind leasing and renovating more than 96,000 square feet at iconic Jericho Plaza instead – but that’s a $10 million move, the company says, and it requires development agency assistance.

Eager to keep the major-league distributor anchored in Nassau, the IDA has crafted a PILOT plan that holds the line on payments for 10 years, followed by five years of below-the-curve property tax-rate hikes, while granting the retailer – which employs 377 full-time and 17 part-time at its headquarters now, and projects a dozen construction jobs during its reconstruction project – more than $500,000 in sales tax exemptions.

With 1-800-Flowers.Com’s lease of 80,500 square feet in Carle Place is set to expire and rival states dangling similar incentives deals, the IDA tax breaks were an absolute imperative, according to Kessel.

“[1-800-Flowers.Com] has been a major economic contributor to the region since its relocation to Long Island in 1990, and (at) its current location since 2005,” the chairman noted. “It is important to retain companies such as 1-800-Flowers.Com to maintain the economic growth of the county and ensure continued success.”

Similar regional benefits are to be found in Twenty-Six Sunset’s planned $24.3 million, 93-room Marriott Residence Inn on Jericho Turnpike, leading the IDA to consider amending an incentives package it previously approved in 2018.

Citing new county property assessments, higher construction costs “resulting from a decision to utilize unionized construction labor” and other spiraling expenses, the developer claims projects costs are almost $3 million beyond initial projections, and rising fast. The new hotel will still generate 100 temporary construction jobs and, once completed, 33 permanent full-time positions – but Twenty-Six Sunset needs more help getting there, and is now seeking a 20-year property-tax PILOT program, starting with a five-year rate freeze.

Rate expectations: A “vital” financial play for the Hagedorn Little Village School.

It’s a lot to ask, but the new Marriott Residence Inn is “a much-needed facility for the area,” according to Kessel, who predicted a perfect fit for Jericho Turnpike.

“It will provide synergy with the Milleridge Inn restaurant and catering complex and will attract visitors heading to surrounding colleges,” the IDA chairman said. “I am pleased that the developer has agreed to work with the Long Island building trades.”

Meanwhile, the Local Economic Assistance Corp. – self-billed as Nassau’s “non-profit-resource” – spent April 7 focused on schools.

The bond-refinancing strategy for Seaford’s Hagedorn Little Village School would help the registered 501(c)3 – a publicly funded not-for-profit providing educational and therapeutic services for children with developmental disabilities – refinance bonds sold in 2013 at a lower interest rate.

Specifically, the Hagedorn School intends to sell $3.75 million in tax-exempt bonds and $2.75 million in taxable bonds to refinance $3.8 million in Nassau County LEAC bonds issued in 2013. The not-for-profit would also add roughly $2 million to its TD Bank line of credit, according to the LEAC.

“This financing is vital, as the school can take advantage of lower interest rates to save money that can be better used on its programs,” Kessel noted. “As a not-for-profit, the organization needs to cut costs in interest to be able to maintain payroll and operate efficiently.”

Bonds also factor into the Kellenberg Memorial renovation plan, with the LEAC set to provide $10.2 million in bond financing to the Province of Meribah Society of Mary, the nonprofit corporation that owns the Uniondale-based Catholic high school and plans to expand its athletics and science facilities.

While the financing plan’s LEAC staff review and public hearing still must be scheduled, the Local Economic Assistance Corp. – created by the Nassau County Legislature in 2010 to aid the county’s not-for-profit community – is already trumpeting a win for the high school and its community.

“We are happy to assist Kellenberg Memorial High School in better serving its students,” Kessel noted. “This financing will help a leading educational institution maintain its highly regarded sports program and support its STEM programs.”