IDA considers excluding utility companies from PILOTs

Vincent Randazzo is not a fan of PILOTs.

The payment in lieu of taxes process has been a cornerstone of the Town of Hempstead Industrial Development Agency as a way to encourage businesses to make their home in this part of Nassau County.

But on the heels of the E.F. Barrett Power Station assessment the Island Park schools superintendent says caused a financial pitfall for taxpayers, Randazzo hopes to prevent the same thing from happening with Equinor.

The Norwegian petroleum company has partnered with BP to construct a wind energy off the South Shore and near Montauk. Yet despite a combined market cap north of $200 billion, both Equinor and BP hope Hempstead town officials will chip in some money in the form of deferred taxes.

New York Director of Public Affairs Harrison Feuer said Equinor is reviewing the programs offered at the state, county and local levels “that would not only assist in the success of our projects, but would also further support the project’s potential for economic growth within the community.”

Making it clear the company was still very early in the development process, Feuer added  that Equinor was reviewing a number of municipal economic development programs, and trying to determine “whether any will be pursued.”

In its redacted 2021 project application to the town, Equinor asks the terms of the PILOT be 28 years starting when construction begins. The amount wasn’t spelled out, except that town officials would create a schedule of the estimated amount of PILOT benefit based on anticipated tax rates and assessed valuation as soon as the application was approved.

“Island Park residents have been burned before,” Hempstead town supervisor Don Clavin told the IDA last week. “It is the responsibility of the Hempstead town board to be on the lookout for taxpayers, which is why we are urging our township’s IDA to put an end to PILOTs for utility companies.”

Councilman Anthony D’Esposito, an Island Park native who will soon be on his way to Washington as a congressman, says his hometown continues to contend with the lost potential tax revenue from the E.F. Barrett deal, especially to nearby Oceanside schools that depend on such funds.

“They are living, breathing proof of the damage that can becaused by utility company PILOTs,” D’Esposito said. “The Town of Hempstead IDA should focus on bringing strong development to our township without threatening the wallets of taxpayers.”

Opponents of such tax breaks say utility companies save money, but don’t pass those savings on to their customers. Instead, those savings turn into profit.

The Hempstead town board has noted they support doing more with less, having cut or frozen taxes for various businesses throughout the past few years. Many times, those efforts bring jobs and additional tax revenue that wouldn’t have come otherwise.

The Long Island Power Authority, which currently owns the near-obsolete power plant, settled with Nassau County to reduce tax assessments at E.F. Barrett Power Station over the next five years, after years of LIPA claiming for years its plants were overtaxed.

“Our goal as the school district, I think with any economic development within the community, is to have developers pay their fair share of taxes like the rest of the community,” Randazzo told the IDA. “It’s just not fair that the burden gets shifted onto Class 1 property owners, which has really been the case. And I think we’ve seen more and more of that with the LIPA settlement.

“I would say what we were here to do, we were able to accomplish.”

But the breakdown of who pays for what hasn’t been fair, Clavin said.

“Town of Hempstead residents are paying more for groceries, energy and other essential supplies,” the town supervisor said. “We should not be picking up the check for utility companies that have more than enough resources to pay their fair share. We strongly urge the IDA to stand with the Hempstead town board and our residents in making utility companies ineligible for PILOTs.”

IDA director Fred Parola says he’ll take into consideration the voices like Randazzo’s against PILOTs, but nothing will be decided right now.

“Although we have been approached,” he said, “there will be no further action on any of this until we have a conversation with you (Randazzo) and also the public officials in the town who have been very outspoken and helpful with us formulating whether we should move forward or not move forward.”

Equinor’s plan calls for a number of wind turbines to be constructed miles off the coast, generating clean energy as part of a $3 billion project. The turbines will be as close as 15 miles offshore, with a tip height of nearly 900 feet, and a rotor diameter of nearly 775 feet. All of it will span 80,000 acres of ocean.

Equinor hopes to build a substation to help process the energy at the former site of Pop’s Seafood Shack & Grill in Island Park, although neighbors there have pushed the company to use the E.F. Barrett substation instead.