Hempstead IDA OKs preliminary deal for Harbor Isle apartments

The Town of Hempstead Industrial Development Agency approved a preliminary resolution on Sept. 18 with AvalonBay Communities, on granting tax-relief measures for its planned development of an 11.6 acre lot on Harbor Isle in Island Park into a rental apartment complex.

The preliminary inducement paves the way for possible financial incentives for the project, including a payment in lieu of taxes agreement, contingent on whether AvalonBay meets the agency’s requirement of cleaning up the property, which is contaminated after years of use as an oil-storage site, according to IDA Chief Executive Fred Parola.

“In this case it’s a clear plus,” he said. “Current taxes are about $98,000, and although it will start at that level for those formative first two or three years, by the fourth year we’re going to pump it up.”

Parola added that AvalonBay was not planning on marketing the rentals to families, reducing its impact on the Island Park School District. “They’ll provide is with more info,” Parolla said noting that talks are still early, “but it’s geared towards young couples.”

Site plans for the construction were submitted to the Town of Hempstead in July, and are currently awaiting approval, according to Town Spokesman Michael Fricchione. Because the development would cover more than an acre of land, according to Section 305 of the town building code the plans must be reviewed and approved by all of the town’s various departments.

The site has had a long and troubled history, with repeated attempts by the Town of Hempstead to block development on the land. In 1999 the Farmingdale-based Posillico Development Company paid $2.4 million at a bankruptcy auction for the land, which up until that point had housed an oil-containment facility, and in 2007 partnered with Blue Island Development LLC to develop the site into combination of rental apartments and condominiums, according to previous Herald reporting.

The town, however, denied Posillico the inclusion of rentals in the project in 2010. After AvalonBay entered the picture in 2012, partnering with Posillico, the town again denied the request for rentals in 2013, prompting a court battle in which a State Supreme Court appellate judge in December, 2016 issued a summary judgment in favor of Posillico, and after an appeal the following year, the Appellate Division ruled that the town’s effort to prohibit the development of rental residences was “invalid and unenforceable.”

In 2017, AvalonBay entered into a contract to purchase the property from Posillico, making it the primary stakeholder in the property’s development.

Parola said that while AvalonBay has a long way to go to ensure it receives tax incentives from his agency, he said, “The purpose of the preliminary inducement is to let them know that the IDA boad is interested in this project going forward.”