The coronavirus pandemic forced the world to hit the pause button. It brought our local and regional economies to a screeching halt, and resulted in a sharp rise in unemployment. Businesses that were hit hard during the shutdown were forced to rethink their operations at a time when resources were scarce. I am proud of the role the Nassau County Industrial Development Agency has played — and continues to play — in our county’s recovery.
The IDA’s mission is to promote the economic welfare and prosperity of Nassau County. We do this by assisting existing businesses so they can stay in the county, and by working to attract new businesses. In both cases, our objective is to increase the county’s tax base and create job opportunities for our residents. Every transaction the IDA completes is carefully thought out, and is made to ensure that we create chances for our economy to develop.
Contrary to opposing beliefs, the IDA does not reduce businesses’ taxes. Let me explain. When you invest in a property, its value goes up and, therefore, so do its taxes. The IDA restructures tax payments for businesses looking to invest in our economy in what are called payments in lieu of taxes, or PILOTs.
A drastic increase in property taxes due to an initial investment could make an investor walk away. What the IDA does is take away the immediate shock of increased taxes caused by the investment by gradually increasing taxes over the course of the PILOT term. At no point are less taxes collected than what was previously being paid on the property.
Take the recently approved Superblock project in Long Beach as an example. The property — which will soon be home to more than 400 units of much-needed housing, and will create jobs and stimulate local business activity — has sat vacant for more than 40 years. If it were to stay vacant for the next 25 years, it would generate $7.4 million in taxes. The developer received a 25-year PILOT to make a $360 million investment, which will end up generating more than $23 million in taxes over the course of the agreement. This doesn’t include the positive economic impact that will be generated by those who move into the new housing units as they spend money in the community.
Richard Kessel is chairman of the Nassau County Industrial Development Agency.