Merchants learn about town IDA

Town of Hempstead Industrial Development Agency Director Fred Parola visited the Valley Stream Chamber of Commerce on Nov. 18 to talk about the services his agency offers to the business community.

The IDA is there to help businesses looking to expand or open shop in the town. Job development is key in receiving assistance from the agency, said Parola, former Nassau County comptroller and state assemblyman.

Businesses do not receive a handout from the IDA. Rather, the agency offers numerous tax breaks. Property taxes can be reduced for up to 10 years, Parola said, and the reduction can be as much as 50 percent in the beginning. Sometimes property taxes are replaced with a Payment in Lieu of Taxes. Under a PILOT agreement, the different municipalities and schools receive the same percentage of money they would if normal property taxes were being paid.

Parola said that villages and school districts feel the effects of tax breaks the most since there are fewer properties to draw from than the town or county. He said this is a consideration when reviewing projects. “My board is very sensitive to this,” Parola said.

The IDA can also give a break on the mortgage recording tax, as well as on sales tax for any supplies purchased to get the business up and running, “from paper clips to construction materials,” Parola said.

He noted that there are also opportunities for low interest loans through area banks. “We do not finance,” he explained. “We are a conduit, though, for financing.”

Recently, Parola said, a number of state laws have expired giving the IDA more power to help businesses. He said that in the past, they could not assist with projects that are largely retail. “Retail is defined as the customer coming to the establishment,” he said. Also, the IDA can now assist local governments with municipal building projects.

No taxpayer dollars are used to fund the operation of the IDA. Instead, the agency runs solely off of fees collected from the projects it assists. The cost is 1/2 of 1 percent for projects up to $20 million and 1/6 of 1 percent for projects more than that.