Valley Stream residents and officials speak out against PILOT

Valley Stream residents voiced concerns at a public meeting on Monday about the Town of Hempstead Industrial Development Agency’s PILOT agreement with the owners of the Hawthorne Apartments and questioned whether the agreement should continue under a new prospective owner.

Mike Belfiore spoke about the effects of a PILOT (payment in lieu of taxes) agreement on a centralized high school district like the one in Valley Stream. Under a PILOT agreement, a business is pulled off of tax rolls and pays local tax authorities a negotiated amount instead. As a result, a school district’s tax base usually decreases. In a centralized high school district, where the elementary school districts collect taxes for the high school district, the tax burden for the high school district shifts onto the elementary school districts.

Belfiore asked the IDA board members whether they could include wording in the Hawthorne PILOT agreement that would “mitigate the inequity.” Edie Longo, the deputy executive director and CFO of the Town of Hempstead IDA, said that the IDA is bound by state municipal law, and that the state government is supposed to mitigate the negative affects of a PILOT agreement. Belfiore responded that the board should vote against approving the continuation of the PILOT agreement under a prospective new owner.

“I don’t see any reason why we should move forward,” he said.

District 24 Superintendent Don Sturz also asked the board to consider how a PILOT agreement would affect the district’s budget. When a business is granted a PILOT agreement, the district’s tax levy decreases along with the amount of money the district can spend. Sturz said that, as a result, the board must decide which programs or services to cut.

“At the end of the day, that cost is really borne by the children,” he told the members of the IDA board. “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.”

The Hawthorne PILOT agreement was granted to Zeus Cottage LLC in 2013, after the Cottage Street property was deemed to be a failing property. As part of the agreement, Zeus Cottage would create construction jobs and would build an apartment building to entice people to live in Valley Stream. It also agreed to spend in the village’s downtown area. Now, the project is completed, and the current owners are selling the property, but there are still 13 years remaining in the PILOT agreement. The prospective owner, Hawthorne Owner LLC, is considering buying the apartment building only if the existing PILOT agreement stays in place.

“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 public hearing ended after almost an hour, and Parola said that the IDA board would consider everyone’s views.