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Town of Hempstead Industrial Development Agency denies AvalonBay PILOT request for Harbor Isle project in Island Park

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At its Jan. 23 meeting, the Town of Hempstead Industrial Development Agency board voted against a PILOT request from developers at AvalonBay, which sought a payment in lieu of taxes for the proposed Harbor Isle development.
At its Jan. 23 meeting, the Town of Hempstead Industrial Development Agency board voted against a PILOT request from developers at AvalonBay, which sought a payment in lieu of taxes for the proposed Harbor Isle development.
Christina Daly/Herald

At its Jan. 23 meeting, the Town of Hempstead Industrial Development Agency board voted 3 to 2 against a developer’s re-quest for a payment in lieu of taxes agreement for a $90 million, 172-unit luxury apartment complex at the former Harbor Isle petroleum-storage facility in Island Park.

“I think there were unresolved questions for the board members,” IDA Chief Executive Fred Parola said after the vote, “but those issues have since been resolved to their satisfaction.”

Arlington, Va.-based AvalonBay Communities was seeking a 15-year PILOT agreement to build an apartment complex after a decade-long controversy about developing the site. The lot contains contaminated soil and groundwater.

Calls requesting comment from representatives of AvalonBay and Dan Deegan, a lawyer at the Uniondale-based Forchelli, Deegan & Terrana LLP, the firm representing AvalonBay, were not answered at press time on Monday. Deegan spoke to the board on behalf of developers before the vote.

Parola said that the IDA would likely revisit the PILOT issue at its next meeting in late February, and could call a special meeting. He said that concerns arose about the cost of the PILOT — which would have been $100,000 in the first year and regulary increased to $1 million by year 15 — and the impact the project might have on Island Park schools. He noted that the apartments would be marketed to young couples starting out or older residents looking to downsize.

Island Park Schools Superintendent Rosmarie Bovino has been outspoken in her opposition to the project for many reasons, including her concern about the effect that adding nearly 200 more residents would have on traffic.

“There’s no public transportation,” Bovino told the Herald after addressing the IDA board at the meeting. “That means everybody will have cars, and there are only two ways in and out of Harbor Isle.”

Bovino explained that Warwick Road and Island Parkway are the two exits. Warwick Road, which runs north of Francis X. Hegarty Elementary School, is often flooded and the police and fire departments must use special vehicles to bring children to and from school during floods.

She said that Island Parkway runs directly into Long Beach Road, which is used as the main evacuation route for residents of Long Beach and Island Park during severe storms, and might be heavily congested should an emergency arise after the units were built.

In addition, she said, no formal traffic studies were completed to collect data on the impact that an influx of residents would have on the community, and that only an environmental impact study was administered in compliance with the State Environmental Quality Review Act. Parola said town officials assured him a studies were complete and no issues were expected to arise.

The town is also using a $5 million federal grant to narrow Austin Boulevard from six lanes to five, which Bovino said would increase traffic issues. The Island Park community is especially vulnerable, she noted, because it faces a potential 25 percent increase in taxes due to the Long Island Power Authority’s challenging the property taxes that it pays because of the Barrett Power Plant. LIPA is seeking to reduce its taxes on four National Grid-owned power plants, including Barrett, arguing that the properties are over-assessed by at least 90 percent.

Bovino said she was “very pleased and appreciative” after the board’s vote, which she called surprising. The IDA had approved a preliminary resolution for the 11.6-acre lot on Sept. 18, granting tax-relief measures for the development. “The purpose of the preliminary inducement is to let them know that the IDA board is interested in this project going forward,” Parola said at the time.

Site plans for the construction were submitted to Hempstead in July. At the IDA’s September meeting, AvalonBay representatives said the cost to clean up the site would be about $9 million and that it could take six to nine months. Construction of the apartment complex would take another 26 months, they added. According to the town building code, because the development would cover more than an acre of land, plans must be reviewed and approved by all of the town’s departments. The site plan calls for three feet of clean soil in addition to air and water monitoring.

Richard Schurin, who lives near the site of the proposed development and addressed the board at the meeting, told the Herald that he believed the project would go against the character of Harbor Isle.

“My main objection is that the costs to the community far outweigh any additional tax revenue that this project would bring,” he said. “The additional burdens that would be placed on us in schools and the infrastructure far outweigh any additional tax revenues that this project could bring.”

Hempstead officials have previously blocked development on the land. In 1999, the Farmingdale-based Posillico Development paid $2.4 million at a bankruptcy auction for the land. In 2007, the company partnered with Blue Island Development LLC to develop the lot into rental apartments and condominiums, but the town denied the inclusion of rentals in 2010 and later decided to allow a maximum of only 10 percent of the building to be rentals.

AvalonBay partnered with Posillico in 2013, but the town once again denied the rentals. Posillico then entered into a legal battle with town officials in State Supreme Court. In 2015, a judge issued a summary judgment in favor of Posillico, and after a 2016 appeal, the Appellate Division ruled that the town’s efforts to stop the development of rental residences was “invalid and unenforceable,” according to previous Herald reporting. In 2017, AvalonBay entered into a contract to purchase the property from Posillico, making it the primary stakeholder in the property’s development. A town spokesperson declined comment on the vote.

Bovino said she was discouraged to learn that Parola planned to address the vote again. “I’d be very disappointed if they revisit the vote,” she said. “I don’t see what significant changes there could be to the points that were made at the meeting that would result in this being a more favorable project to the community.”