By ALEX COSTELLO
The developer SDRJ bid about $3 million for all of the brownfields. One of the sites in Island Park is a former gas station on Austin Boulevard, which is now being used to park trucks. The other is on the west end of Waterfront Boulevard.
Brownfields are vacant industrial properties that once hosted warehouses, gas stations, factories and the like. Most developers steer clear of them because they must be cleaned of any contaminants before they can be developed, a process that can be costly and time-consuming.
Brownfields are a headache for the county as well. They are difficult to sell, and the county can only hold a tax lien - the back taxes owed on a property - for 15 1/2 years, according to a statute of limitations on such liens.
"There's no interest in the properties," said Tom Maher of the Nassau County Department of Real Estate. "And because there's perceived contamination, whether it's actual or not you don't know until you do some investigation, but developers just shy away from these properties. That's the whole problem with brownfields."
The county can sell the tax lien on a brownfield to a developer, which pays the county what it is owed, takes ownership of the property and can then develop it as it pleases. Few developers want to take on brownfield liens, however, because they also face the expense of cleaning up the property.
But the county has devised a way to make its brownfields more attractive to developers. "We came up with this idea, which has never been done before, as far as we know, where we're selling the liens and assigning the deeds," said Sean Rainey, the county's deputy director of real estate.
The county's plan, put simply, is to give the deed to a brownfield to a developer when it makes a down payment on the lien, instead of after the lien is paid off. In addition, the developer can deduct the costs of cleaning the property from the balance it owes the county on the lien.
Rainey gave an example of a developer who bids $300,000 on a tax lien. The county accepts, and the developer makes a down payment of $50,000. The developer then cleans the property, which costs $100,000. In the end, all it owes the county is an additional $150,000.
"It adds an incentive for them so they don't feel like they're bearing all the liability for these expenses," Rainey said. "And we get the property cleaned, it goes back on the tax rolls, and everyone benefits."
Though SDRJ's bid did not approach the properties' cumulative assessed market value - about $5 million, according to Maher - it nearly equaled the total of all their county tax liens, $3.2 million. "So we're really getting a pretty good deal here," Rainey said. "We're getting, dollar for dollar, a good deal of our money back."
"We felt that the [Austin Boulevard] property would be good for some kind of retail/commercial endeavor - probably the best use there would be a bank," said Scott Yanuck, one of the developers. "I've contacted several banks, and they're interested in these properties that are in the right location. So I think that's a good use for that property."
Yanuck said that the Waterfront Boulevard property should be developed into something that is appropriate for the location. "Some kind of a restaurant, taking advantage of it being right on the water," he said. "Eating outside or something like that."
Depending on the state of the properties and the extent of their contamination, Yanuck explained, cleaning could be completed in a year or so. At that point, some of the properties - although Yanuck wasn't able to specify which ones - could begin to be developed.
"We're buying the properties because we feel that we can clean them up and turn them around and get them at a discount," Yanuck said. "And we're long-term developers. We're not looking to buy and flip."
Comments about this story? ACostello@liherald.com or (516) 569-4000 ext. 207.
