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Mostly Cloudy Questions remain for schools after IDA revokes mall tax breaks
The Town of Hempstead Industrial Development Agency voted to revoke tax breaks granted to the Green Acres Mall at the IDA’s meeting on April 27, saying the mall’s ownership failed to create the agreed-upon number of jobs.
“Job creation is the most important aspect of a proposed [payment in lieu of taxes] agreement, in this board’s opinion,” the Hempstead IDA board said in a statement, “and there is precedent for revoking PILOTs for non-compliance in fulfilling employment representations, some for falling short of the promised numbers by only a few jobs.”
The IDA said it requested payroll records in February from Macerich, the mall’s California-based owner. Macerich agreed that its development plans would create 355 full-time jobs in the first year and 570 in the second. The IDA claimed it saw proof of the creation of only 45 jobs, and that no information about the mall’s job maintenance rate was provided.
The news came after months of public outcry and efforts by local lawmakers to address a property-tax hike that many attributed to tax incentives granted to the mall by the IDA in 2015.
The tax breaks reduced the mall’s tax payments by about $6.5 million last year, and will lower them by a similar amount annually until 2022. When tax bills in School Districts 13, 24 and 30 increased, on average, between $322 and $758 in October, residents were furious that the mall had received such a sizable tax reduction. A report from the state comptroller’s office in March declared it the state’s second-largest tax break of 2015.
Ken Volk, senior vice president of Macerich, issued a statement calling the decision “invalid,” and said the company was pursuing “all legal options.”
District 30 was criticized in an economic study commissioned by the IDA in November for underestimating its share of the PILOT, and thus levying more property taxes than it needed this year. However, school officials claimed that their underestimate was due to a lack of communication by the IDA.
The district has since lowered its tax levy for next year’s school budget — which will be voted on May 16 — to account for the excess revenue it was expecting in June. (The tax levy will decrease by 15 percent over the current year.)
Superintendent Nicholas Stirling said the district has not yet received any excess PILOT money.
In the PILOT plan’s first year, the mall was supposed to make two payments each to District 30, the village, town and county totaling roughly $14 million — one in October and one in June. Now that the tax breaks have been revoked, District 30 officials were unsure if they would receive the second payment, and they claim they do not know the amount of PILOT revenue they will be paid next year.
Stirling said that despite the district’s frustration with the IDA, it supported the revocation.
“This is not about the revocation, because we are in support of that. We’ve been asking for that all along,” Stirling said. “But we’ve also been asking for them to work with us so that we can budget appropriately based on what we know. And they continue to keep us in the dark and give the impression that we know things, and that we have false budgeting practices, which is not the case.”
In addition to revoking the tax breaks, the IDA voted to adopt a new communications policy, apparently in response to critics of the Green Acres Mall situation who claimed the board was not transparent. “There won’t be any excuse for someone to say, ‘I didn’t know about it,’” IDA Chairman Arthur Nastre said.
Several speakers asked the IDA board if, and how, taxpayers would be refunded, but the board declined to comment.
“I’m pretty sure that the litigation is going to be brought by Macerich Companies, and that would probably stay any proceedings until litigation is determined,” Nastre said. “So I don’t think we should comment at this time on what’s next, because we really don’t know.”
Ed Fale, the District 24 superintendent, called the revocation an “important first step.” Constance Evelyn, superintendent of District 13, said that she and the Board of Education would “continue to closely monitor” the situation.
“I look forward to learning more about the revocation of the Green Acres Mall PILOT,” said Bill Heidenreich, superintendent of the Central High School District. “I am supportive of any revocation that helps our taxpayers and does not hurt our public schools.”
The topic was scheduled to be discussed further at a joint-boards meeting on Thursday at 6:30 p.m. at Memorial Junior High School.
