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Fair iStar defends Superblock tax break
Critics say schools, city will lose millions
The Nassau County Industrial Development Agency was scheduled to hear from hundreds of residents at a hearing on Wednesday as the agency considers iStar’s request for a 25-year tax break, which the developer says will determine whether it will move forward with the $300 million Superblock project.
According to a copy of the application for a payment in lieu of taxes, or PILOT, program, obtained by the Herald, the estimated property tax exemption totals $122.6 million, with additional sales and mortgage tax exemptions of $6 million and $1.5 million, respectively.
The project plans include 522 one- and two-bedroom rental apartments in two 160-foot-tall buildings, 11,000 square feet of retail space for shops along the boardwalk, and a promenade with café tables, benches and other amenities. The apartments, expected to rent for $2,275 to $3,575, will be marketed to young professionals and empty-nesters, and iStar has brought in a developing partner, AvalonBay Communities, to invest in the project.
According to iStar, it is expected to create more than 2,000 primary and secondary construction jobs, 468 permanent jobs, more than $100 million in economic benefits for the city of Long Beach and $4.8 million in new sales tax revenue for the county, according to the application.
iStar currently pays about $500,000 annually in taxes, and, if the IDA approves 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.
But many residents and local officials, such as County Legislator Denise Ford (R-Long Beach), are crying foul, and questioning the economic benefits iStar claims the project would generate. Ford and others have also criticized iStar representatives who emphasized last year that the company had the financial wherewithal to fund the project, and made no mention of tax incentives.
In an op-ed in this week’s Herald, former Sen. Alfonse D’Amato writes that the city and the school district could lose out on more than $100 million in taxes if the IDA approves iStar’s PILOT application.
