Residents slam 25-year tax break for iStar

Hundreds pack City Hall for controversial Superblock hearing

Posted

An overwhelming number of residents spoke against a proposed 25-year tax break a developer is seeking to build two luxury apartment towers on the vacant Superblock property at a public hearing on Wednesday.

Hundreds packed the sixth floor auditorium of City Hall for a three-hour meeting that grew heated at times. About 50 people spoke and while some said they supported the proposal, most made it clear that they were against the deal, saying that Long Beach would lose out on the full tax benefits of such a development.

Among them were County Legislator Denise Ford (R-Long Beach), former State Assemblyman Harvey Weisenberg and former U.S. Sen. Alfonse D’Amato, who criticized the developer, iStar Financial, saying that the Manhattan-based firm told the Zoning Board of Appeals and the public last year that it needed only a height and density variance in order to develop the new mixed residential and commercial development — and had the ability to finance it — with no mention of a need for tax incentives.

“ … I want to see something done there,” said D’Amato, who accused iStar of a “bait and switch.” “But not something that takes $100 million out of the pockets of the taxpayers! There wasn't one word about we need any kind of economic help. Not one word. Nothing about tax abatements."

Last year, iStar said the $300 million project would revitalize the 6-acre Superblock, a parcel that has remained vacant for 30 years and had been mired in litigation. The zoning board's approval allows the developer to build 522 one- and two-bedroom rental apartments in two 160-foot-tall buildings, with 11,500 square feet of retail space for shops along the boardwalk. The apartments, expected to rent for $2,275 to $3,575, will be marketed to young professionals and empty-nesters, and iStar is looking to develop the property with AvalonBay Communities.

iStar told the Herald last year that it would pursue economic incentives to make the project commercially viable. The company now says construction of the buildings hinges on a deal with the Nassau County Industrial Development Agency for a payment in lieu of taxes, or PILOT, program. iStar is seeking an estimated $122.6 million property tax exemption, with additional sales and mortgage tax exemptions of $6 million and $1.5 million, respectively.

iStar currently pays about $500,000 annually in taxes, and, if granted the PILOT, taxes would increase by just 1.66 percent a year for 15 years, but would rise to full value in the final 10 years of the deal, for a total of $41.1 million, compared with $16 million if the property remains vacant.

Page 1 / 3