Hawthorne PILOT gets transferred to new owner

The Town of Hempstead Industrial Development Agency voted last Thursday to approve the transfer of the Hawthorne Apartments PILOT agreement from its current owner, Zeus Cottage LLC, to the purchaser of its Cottage Street property.

The Hawthorne PILOT (payment in lieu of taxes) agreement was granted to Zeus Cottage in 2013, after the property was deemed to be failing. As part of the agreement, Zeus Cottage agreed to create construction jobs and would build an apartment building to entice people to live in Valley Stream.

Now, the 90-unit apartment building is complete, and the owners have put the property on the market for $38.9 million, but the PILOT agreement still has 13 years remaining. The prospective owner, Texas-based Hawthorne Owner LLC, is considering buying the apartment building — but only if the PILOT agreement stays put.

“For the project to remain economically sustainable, this [agreement] would have to remain in place,” said Daniel Deegan, an attorney representing Hawthorne Owner. “You wouldn’t buy this building if it didn’t have this PILOT in place.”

The decision follows a July 23 public hearing, at which residents and school district officials spoke out against the renewal of the PILOT agreement. One resident, Mike Belfiore, said he saw no reason why the IDA should approve the continuation of the PILOT agreement, and District 24 Superintendent Don Sturz asked the board to consider how a PILOT affects a school district.

He said that when a business is granted a PILOT agreement, a school district’s tax levy decreases, along with the amount of money the district can spend. As a result, he said, the school board must decide which programs or services to cut.

“At the end of the day, that cost is really borne by the children,” Sturz said. “You, at this moment, have the opportunity to make a difference

or make a change that will actually very much affect the residents and the children.”