By GREGORY ZELLER //
Long Island industrial development agencies have surged into 2022.
Tax-incentive deals for a full roster of high-profile construction and renovation projects have earned preliminary approvals from multiple local IDAs in the year’s opening weeks, as economic-development leaders in Nassau and Suffolk counties continue to play the long game – offering property- and income-tax breaks that trigger large-scale investments in regional infrastructure and economies.
Busiest of all has been the Town of Hempstead Industrial Development Agency, which on Jan. 31 granted preliminary approval to an incentives package for NBD Holding, a limited liability corporation that intends to build a $43 million Hilton Garden Inn on Freeport’s Nautical Mile.
At that same Jan. 31 meeting, the Town of Hempstead IDA gave preliminary approval to an incentives deal that will help Great Neck-based Philips International Holding Corp. with the $19 million conversion of the former Roman Catholic Diocese of Rockville Centre headquarters into a Class-A office building, billed by the IDA as “the first of its kind” in Rockville Centre.
Holy bargain: The Roman Catholic Diocese of Rockville Centre sold it for $5.2 million; Synergy Holding Partners flipped it for $9.8 million just seven months later.
Farther east, the Suffolk County Industrial Development Agency has issued preliminary approval for a tax break that will help Blue & Gold Holdings LLC construct a $7.3 million mixed-use apartment building in Huntington Station – the latest collaboration between the agency and the Huntington-based developer.
All three of the tax deals must still undergo full IDA reviews, public hearings and final approvals. But in each case, economic-development leaders are already hailing incentives packages that will create long-run socioeconomic gains – benefits that might not have materialized without a little government-sponsored sugar.
In Freeport, with the help of the Hempstead IDA’s proposed 20-year payment-in-lieu-of-taxes agreement, NBD Holding plans to construct an 89,836-square-foot tourist destination overlooking the Woodcleft Canal.
The planned hotel – slated to include 100 rooms, a 125 person-capacity ballroom and an attached, independently operated restaurant – is targeting a Spring 2024 opening. It has already received Village of Freeport site-plan approval on vacant land that once housed the Hunter Pointe Marina and The Schooner restaurant.
The empty, roughly 1.6-acre lot currently generates $133,151 in annual property taxes, according to the Hempstead IDA – but will generate $772,825 in annual property taxes after the two-decade PILOT agreement runs its course, Meanwhile, local economies will benefit from a projected 166 construction-phase jobs and 35 full-time positions.
“This is a great project that … has the potential to revitalize a part of the Nautical
Mile that needs a shot in the arm,” said Hempstead IDA Chief Executive Officer Fred Parola. “It will bring tourists and business travelers who will infuse the local economy.”
Parola was equally enthusiastic about the 20-year PILOT program likely to benefit Philips International’s proposed project on North Park Avenue in Rockville Centre: the gutting of the former Roman Catholic Diocese headquarters and reconstruction of the 60,000-square-foot space as a Class-A office building.
According to the IDA, Philips International purchased the building for $9.8 million in October, just seven months after Hempstead-based Synergy Holding Partners acquired the former diocese HQ for $5.2 million – part of the Rockville Centre Roman Catholic Diocese’s Chapter 11 bankruptcy proceedings.
Kelly Murphy: Formidable partnerships.
With a boost from the proposed Hempstead IDA PILOT program, Philips International will sink $19 million into its Class-A renovation effort, which is projected to result in 220 new full-time jobs. And even with the PILOT program in place, associated property tax revenues are set to skyrocket – the property was exempt from property taxes while owned by the diocese, meaning the $300,000 in total PILOT revenues and $630,000 in annual property taxes after the 20-year tax break are all gravy.
“This project … will create hundreds of new jobs as the building is upgraded and tenanted,” Parola noted, adding the Class-A space would ultimately “bring in new revenue for all the taxing jurisdictions.”
Increasing Suffolk County’s stock of rental properties and affordable-housing opportunities is the name of the game in Huntington Station, where Blue & Gold Holdings will leverage its third Suffolk County IDA incentives package into a 16-unit apartment house known as the Landmark Building, featuring three affordable-housing units and 4,000 square feet of ground-floor retail space.
The preliminary, undisclosed tax break follows previous Suffolk IDA packages that have helped Blue & Gold Holdings sink more than $26 million into the renovation of downtown Huntington Station, including the ground-up construction of the Northridge apartment building and the remaking of the Manor at Northridge.
According to the Suffolk IDA, the agency-supported projects – including the proposed construction of the 21,525-square-foot Landmark Building – will ultimately increase combined property-tax revenues generated annually by Blue & Gold Holding’s Huntington sites from $11,500 to $347,000, even with the tax incentives in place.
That impressive return on investment solidifies the importance of the IDA incentives, according to Suffolk County IDA Deputy Executive Director Kelly Murphy, while reinforcing the agency’s overall mission.
“Projects like this … are one of the many ways the Suffolk IDA is helping the development of quality rental housing as well as bolstering the appeal of regional downtowns,” Murphy said in a statement. “The efforts of this developer and their drive to truly be a formidable partner in downtown Huntington Station’s redevelopment cannot be [overstated].”
