The Glen Cove Industrial Development Agency moved forward with the approval process for the new Village Square at its Aug. 22 meeting.
The project, being developed by RXR Realty, will include a 16,500-square-foot public plaza, restaurants, retail stores and 146 studio, one- and two-bedroom apartments.
In reviewing the comments from the Aug. 9 public hearing and additional communications the city received from residents about the project, Mayor Reggie Spinello expressed frustration that some people did not understand the payment in lieu of taxes, or PILOT, plan for the project. “PILOT is an incentive for someone to build when the economics of the project don’t fit,” Spinello explained.
During the first three years of construction, RXR will pay the IDA just over $183,000 annually, which is more than the current tax bill of around which are around $154,400. The payments will increase 2 percent per year for the following 15 years, after which the property will revert to the tax rolls.
Additionally, there will be a one-time payment in lieu of parking, because the project does not have enough on-site parking, as required by city code. This fee will be about $192,000, and the city plans to direct that money to repairs to the Brewster Street garage.
The city also enlisted the help of two independent third parties. Camoin Associates undertook a fiscal impact analysis, studying the economic impact of the project on the city. Spinello said that “the combined economic impact of the project is 65 jobs with earnings of $2.2 million, and sales generated in and around Glen Cove of $7.3 million.”
He also quoted a report by the National Development Council, a not-for-profit group that aids municipalities with economic development. “If the proposed development were to be taxed at full assessment,” the report stated, “the development would be financially challenged and not likely proceed. The PILOT is not a vehicle for which investors will be unduly enriched, it is a means by which financial feasibility will be achieved in order for the long term delayed project to begin.”
RXR has asked for $916,534 in sales tax benefits and $233,730 in mortgage recording tax benefits, a total tax break of roughly $1.15 million. IDA members agree that the project would not be completed without the financial assistance.
IDA member Vincent Hartley said that the blighted Village Square affects surrounding property owners, who find it difficult to attract new tenants. This, in turn, reduces property values, which the property owners believe is reason to lower their taxes.
The project start date will depend on the completion of a contract between All Island Realty, owners of a doctor’s office in the blighted area, which refused to relocate. But because abatement of the property has begun, the office will be relocated until construction is completed.
A contract is expected in the next several weeks.
In addition to approving the PILOTs, the IDA acknowledged a State Environment Quality Review Act declaration that no further environmental work is needed at Village Square.