Report attempts to vindicate Hempstead’s IDA board

Two weeks ago, after a public outcry, the Town of Hempstead Industrial Development Agency hired Saratoga Springs-based Camoin Associates to do a cost-benefit analysis of the deal giving Green Acres Mall 10 to 15 years of tax breaks.

The report, released on Monday, had reached two main conclusions: (1) District 30 and the Central High School District “intentionally undercounted” the amount of PILOT (payments in lieu of taxes) revenue that they would receive, causing them to levy more than they needed from the community, and (2) the tax increases would have happened regardless of the mall PILOT, because the mall’s ownership is challenging its tax assessment in court.

The PILOT agreement includes what the mall will pay in total property-tax payments, but does not delineate how much each jurisdiction will receive. For example, the mall previously paid about $15 million in school taxes. Under the PILOT, the mall will make a total payment of $14 million, which is divvied up among the county, town, schools and village.

District 30 Superintendent Nicholas Stirling said that the district only learned last week that the district will receive 72 percent of the PILOT, or about $10 million — half of which goes to the Central High School District. The school budget is a certainty, Stirling said, but the district was forced to estimate what it would receive in PILOT revenue. The district’s estimate was lower, at about 50 percent of the PILOT, or $7.1 million. The IDA claimed that the school districts knew how much money they were getting all along.

“We would have never estimated that high,” Stirling said. “Because that 72 percent is exactly what we would have gotten with taxes.”

Stirling said that the district used its other PILOT agreements with commercial properties, and that of neighboring school districts, to arrive at the 50 percent estimate.

Bill Heidenreich, superintendent of the Central High School District, said the report was incorrect and “based upon the false assumption that the original PILOT amount will remain valid through the tax certiorari proceeding process.”

The other main factor that the report cited was that Los Angeles-based Macerich Company, the mall’s owner, is challenging the property’s assessment in a number of ongoing tax certiorari cases — the cost of which, the report stated, was ultimately borne in the current tax year, as opposed to future tax years. The IDA has said that it reviewed “convincing documentation” that the mall will succeed in challenging its assessment.

Ken Volk, senior vice president of Macerich Company, released a statement on Monday saying that the company was pleased that the Green Acres Mall “accounts for only a small fraction of the property-tax increase.”

Fred Parola, the IDA’s executive director, said that the report “speaks for itself and it puts the blame where it belongs.”

When asked if he would remain executive director — a salaried position that reports to the IDA board — Parola said, “That’s up to the new board.”

Jonathan Kohan, the IDA’s former treasurer, who resigned on Monday, agreed with Parola. “I leave my position on the board with the confidence that the decisions made by the Town of Hempstead IDA board and myself regarding the Green Acres PILOT were prudent and in the best interests of all parties,” Kohan said in a statement.

In addition to the study done by Camoin Associates, Nassau County Legislator Carrié Solages (D-Elmont) commissioned a fiscal impact study undertaken by the county’s Office of Legislative Budget Review last week.

That report, also released Monday, pointed to the fact that throughout Nassau County, the share of the overall tax burden paid by residential properties is increasing while that paid by commercial properties is decreasing. The OLBR also reported that although the tax incentive given to the mall created and retained jobs, “a significant amount of the project generated economic benefit [that] will accrue outside of Nassau County.”

District 30 and the Central High School District were the only schools notified of the PILOT, but taxpayers in neighboring villages and communities are also feeling the financial impact.