Tax abatement is front and center at Long Beach Superblock hearing

There weren’t the huge crowds some had expected when Nassau County economic development officials held a hearing Wednesday night on the largest building proposal in Long Beach in decades: a project to construct hundreds of condominium and rental units on the Superblock. 

Instead, Richard Kessel, chairman of the Nassau Industrial Development Agency, which will decide whether to approve a $23 million, 25-year tax abatement for the project, called the hearing one of the most unusual the county has held.

There was no decision on the tax abatement plan proposed by the Garden City-based developer Engel Burman Wednesday night, Kessel said. Instead, there were chairs spaced six feet apart, and a turnout for both the afternoon and evening sessions of only about a dozen people. The hearing was also virtual, and more people were online than in the ballroom of the Allegria Hotel, the site of the hearing.

“We haven’t had an in-person hearing since March,” Kessel told the audience. “So this is extraordinary. You don’t see many in-person hearings anywhere in Nassau County these days.”

A half-dozen people who were opposed to the project said they did not like the idea of providing a tax abatement to a multi-million-dollar developer. 

Meanwhile, another half-dozen said they favored the project, asserting that Long Beach needed the tax revenue and the jobs. Many of those in favor said they were union workers. 

Michael Bosco, a resident of Long Beach for 30 years and a union carpenter, was typical of the development’s supporters. “I was always in favor,” Bosco said at the beginning of the evening portion of the hearing. “Now, with Covid, I would think more people would want to live closer to their homes and their jobs.”

But Katherine O’Leary said she was unhappy that Engel Burman threatened not to build the complex unless it received the tax abatement. 

“The taxes fall on the residents,” O’Leary said, testifying, like Bosco, in person. She said taxes in the city have been raised in each of the past three years, and that many in Long Beach are unemployed because of the coronavirus pandemic. 

“I also disagree that the [Superblock site] is blighted,” O’Leary said. “I think of it as open space. I would prefer that a swimming pool be built there. I resent having to pay taxes for people who can afford million-dollar condos.”

Kessel noted that the PILOT, or payment in lieu of taxes, would not raise taxes for residents. He and other IDA officials said Long Beach would benefit by the taxes the developer would pay over 25 years.

Katherine DiMonda, a 12-year Long Beach resident and the owner of a design business, said her business does not receive tax breaks.

Also, DiMonda said, “What about our traffic and our roads?”

Dan Deegan, the attorney for Engel Burman, said the developer has built a number of projects on Long Island and has  “left a clean place” when the work was done.

Kessel said the IDA will hold a meeting next Tuesday, and that the Superblock will be on the agenda. He could not, however, say whether a vote on the project would be taken at that time.

The problem of what to do with the Superblock, six acres of what is now an empty field strewn with rocks, sand and weeds off the beachfront, has been an irritant for Long Beach for the last 40 years.  

The land was once home to garden apartments and a bowling alley, but those buildings fell into disrepair and were razed in the 1960s. Long Beach took over the site for unpaid taxes in the 1980s and sold the property to the Haberman family, developers, who planned to construct high-rise residential towers.

The idea went nowhere. By the 1990s, Long Beach, which had long considered the site an eyesore in a city that was struggling to rebuild its image tattered by a series of run-down group homes for discharged psychiatric patients, issued a request for proposals. The city had a gleaming image of hiring a developer to build a hotel, a catering hall, a convention center, restaurant and an assisted living facility.

But those plans too never materialized.

A Manhattan-based developer, iStar, proposed luxury apartment buildings for the Superblock two years ago. IStar asked for tax breaks of up to $129 million, but its requests were denied twice by the Nassau County IDA. IStar filed a $100 million lawsuit against the city, claiming Long Beach failed to support its bid for the tax breaks. The city filed a motion to dismiss the lawsuit. 

A year ago, the Garden City-based developer Engel Burman announced plans to purchase the Superblock site from iStar Financial, which had proposed a 655,000- square-foot mixed-use development that would have brought 522 apartments in two 15-story towers and about 11,500 square feet of retail space. 

Engel Burman has a history in Long Beach. A decade ago, it built the Aqua, an eight-story, 36-unit condo building with ocean views from each residence. The complex has an indoor pool, outdoor dipping pool, fitness room, oceanfront clubroom and concierge.

Engel Burman began a low-key campaign to build support for the Superblock project, holding a series of meetings with community residents, Chamber of Commerce leaders and city officials.

The developer ran into resistance to the size of the tax breaks it wanted.

Engel Burman has proposed significant changes to its plan to build hundreds of condos and apartments on Long Beach’s oceanfront in the hope of making it more palatable to the City Council. It initially asked for a PILOT of 30 years. Seeking to pacify critics, Engel Burman proposed that the PILOT be cut to 25 years. Also, the original proposal called for a $52 million PILOT. The developer is now seeking a PILOT of $23 million. 

Engel Burman has also proposed that 12 percent of the apartment units be set aside as affordable housing, up from 10 percent. If Engel Burman succeeds in securing its PILOT and in building the units, the $100 million suit by iStar would be settled.

In all, Engel Burman, one of Long Island’s largest developers, seeks to build 200 condo units and 238 apartments, along with a 1,000-space parking garage and some 6,500 square feet of restaurant and retail space. Under the PILOT program, the developer would pay $1.2 million in taxes in the first year, with increases up to $6.8 million at 30 years.

Jan Burman, a partner in the development firm, said the project would not be economically feasible if the IDA did not grant the PILOT.

At a regular City Council meeting Tuesday night, Council President John Bendo spoke favorably of the terms under which Engel Burman would proceed, as opposed to the iStar plan.