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eminent domain

Northport power plant. File photo

Town of Huntington officials made the decision Tuesday to take Long Island Power Authority’s proclaimed value of the Northport Power Station at $193 million as an invitation to investigate purchasing the facility.

Huntington town board approved a resolution offered by Councilman Gene Cook (I) to authorize the town attorney’s office to formally research into its legal options in utilizing eminent domain to take ownership of the Northport plant by a 4-1 vote.

“It’s for the people, to look out for the future of the Town of Huntington,” he said. “I have done a lot of research and I believe it’s the right thing to do.”

“It’s for the people, to look out for the future of the Town of Huntington.”

— Gene Cook

The councilman first raised the possibility of turning to eminent domain back in May, days after LIPA submitted documents to Suffolk County Supreme Court in its pending tax certiorari lawsuit against the town, which disputes the current annual tax-assessed value of the plant at about $80 million. The utility company has alleged the structure only has a fair market value of $193,680,000 as of July 1, 2013, based on a market value report from Tarrytown-based Tulis Wilkes Huff & Geiger.

“I looked at that appraisal not as a fair evaluation, but an invitation for the town to explore condemnation of the plant,” Councilman Ed Smyth (R) said. “The price is so ridiculously low that it would be negligent of us to not explore the possibility of acquiring the plant.”

Smyth said that he believes the Northport Power Station, which is actually owned by National Grid, is underutilized by LIPA, perhaps intentionally to devalue it given the ongoing tax certiorari lawsuit.

Cook had previously stated he believes the Northport facility is one of the largest power plants in the Northeast and will become more valuable with future improvements. He said his research shows the facility has the potential to operate and generate electric for another 15 to 30 years, up to a maximum of 40 years before closing down. Cook previously estimated the power station could produce as much as $5 billion in revenue per year for the town.

“The price is so ridiculously low that it would be negligent of us to not explore the possibility of acquiring the plant.”

— Ed Smyth

“What I like if the town buys it now at this rate is, when the plant is closed, we could shut it down and give the property back to the people for reaction or environmental uses,” he said.

Councilman Mark Cuthbertson (D) was the lone vote against an official resolution requesting the town attorney’s office to conduct research into the possibility of eminent domain. He called the legislation an unnecessary act of “grandstanding,” stating any board member could have simply verbally requested the town attorney to look into the matter.

“We are creating false hope this is a viable option, if it really were an option our lawyers would have suggested it a long time ago,” he said. “It is not a possibility to operate the LIPA plant as municipal power authority.”

The councilman also stated that under New York State General Municipal Law, if the town were to take over daily operation of the power station it would not pay any taxes to the Northport-East Northport School District — which currently receives approximately $56 million annually from the utility company.

If the town were to initiate the process of obtaining the power plan via eminent domain, it would not resolve the town’s lawsuit with LIPA. In addition to seeking a 90 percent reduction of taxes on the power plant, LIPA is asking for the town to reimburse it for alleged overpayment of taxes each year since it filed the claim in 2010 — totaling more than $500 million.

“We are creating false hope this is a viable option, if it really were an option our lawyers would have suggested it a long time ago.”

— Mark Cuthbertson

Sid Nathan, spokesman for LIPA, said the company had no comment as it is continuing negotiations at this time. 

Huntington, Northport-East Northport school district, LIPA and National Grid all agreed to sit down with neutral third-party mediator, Port Washington-based attorney Marty Scheinman, in nonbinding arbitration this July to see if all parties could reach a potential settlement agreement over the tax-assessed value of the Northport plant. The trial on the tax certiorari case is scheduled to continue in February 2019, according to Cook. 

Tom Kehoe, deputy mayor for the Village of Northport, commended Cook and the town board for their decision to move forward with investigating the legal potential of utilizing eminent domain to take over the plant.

“Whether it ever gets to the point of the town acquiring it through eminent domain, it’s another piece of the puzzle that will put a little pressure on the utility and LIPA to come to an agreement that’s good for all of us,” Kehoe said.

Councilman Eugene Cook calls for residents to launch letter-writing campaign to Huntington Town officials

Northport power plant. File photo

Town of Huntington officials are moving toward making a power play against Long Island Power Authority and National Grid to take over control of the Northport power plant.

Councilman Gene Cook (R) has called for town residents to participate in a letter-writing campaign asking Huntington’s elected officials to consider utilizing eminent domain to take control of Northport power plant.

His proposal comes days after LIPA allegedly submitted documents to Suffolk County Supreme Court for its pending lawsuit against the town, in which it disputes the tax value of the plant, claiming the structure only has a fair market value of $193 million, according to Cook.

“Their estimate is so far out of wack on it, they are almost like giving us the plant,” the councilman said. “If they want to give it to us, I want to take it.”

Cook said he thinks the Northport facility is one of the biggest power plants in the Northeast, which will become more valuable with future improvements. He estimated the power station could produce $5 billion in revenue per year for the town if it took over operation of the facility. He suggested the name “Huntington Power Service Company.”

“We want to serve our residents, not be an authority over them like LIPA has done,” Cook said. “They have taken LI Power Authority as ‘we have authority over everyone.’” 

Their estimate is so far out of wack on it, they are almost like giving us the plant.”

— Eugene Cook

The councilman drafted a resolution he said he plans to present at the May 17 town board meeting for Huntington to hold a public hearing. If approved, a hearing will be held June 5 at 2 p.m. for residents to voice their thoughts and concerns on the acquisition of the plant from National Grid, which is the owner of the power station.

“The basis of this acquisition will be for the purpose of delivery to the public of electrical power in a safe and cost-efficient manner,” reads the draft resolution.

Under New York State law, the town must publish its findings and determinations on the proposed acquisition from the public hearing within 90 days. The Town of Huntington is due in court to face LIPA less than a week later June 11.

“We are looking at every facet of possibility here when looking at the LIPA situation because it’s a very serious situation,” Supervisor Chad Lupinacci (R) said. “Any possibility that comes up we will review with our attorney — we will review it with experts to see if it’s feasible.”

Even if the town initiated the process of obtaining the power plan via eminent domain, it would not resolve the town’s lawsuit with LIPA. In addition to seeking a 90 percent reduction of taxes on the power plant, LIPA is asking for the town to reimburse it for alleged overpayment of taxes each year since it filed the claim in 2010 — totaling more than $500 million.

“Let’s save the consulting and legal expenses of evaluating this idea, which would be fiscally disastrous to the town, its taxpayers and wouldn’t resolve the pending tax certiorari litigation,” LIPA spokesman Sid Nathan said in a statement.

Let’s save the consulting and legal expenses of evaluating this idea, which would be fiscally disastrous to the town, its taxpayers and wouldn’t resolve the pending tax certiorari litigation.”

– Sid Nathan

LIPA disputes that the Town of Huntington could turn a profit operating the station, claiming Northport power plant is operated at a loss. The power company said its contract with National Grid requires it to pay all costs to run the plant — including $80 million in annual property taxes leveraged by the Town of Huntington — which exceeds its revenue. LIPA also stressed that if Huntington took control of the plant, all beneficial tax revenue would cease, leaving residents to pay more for their government services.

“We hope the town will join with other local communities on Long Island that are working with LIPA to reach a fair settlement offer that puts an unsustainable property tax situation at the Northport plant back on a sustainable path,” Nathan said.

The Town of Brookhaven and Village of Port Jefferson both announced they had reached settlements over the tax assessed value of the Port Jeff plant with LIPA in early April.

If the lawsuit is decided in LIPA’s favor, the utility company estimates that Town of Huntington residents would see their taxes increase by $62 a month, with Northport-East Northport school district residents responsible for an additional $210 to $220 per month.

Lupinacci has said the town remains open to bargaining with LIPA, while Cook said the only negotiation he is for is LIPA agreeing to withdraw its lawsuit.

“I will fight to the death on this one,” Cook said. “Either they want to be good neighbors or they don’t. If they don’t, they can hit the road.”

This vacant parcel located at 1527 Main St. in Port Jefferson may soon be acquired by Port Jeff Village using eminent domain. Photo by Alex Petroski

Port Jefferson Village Mayor Margot Garant has repeatedly called the use of eminent domain “a tool in the village’s toolbox” in relation to its vision for upper Port Jeff revitalization, and as of last week, it appears the toolbox has been opened.

The village is set to acquire a parcel of land in upper Port using eminent domain, as it is looking to purchase vacant property at 1527 Main St. between Safe Harbor Title Agency and Tara Inn on the east side of Main Street, to then sell it to a developer. A diner used to occupy the space, though it has since been torn down. A public hearing was held on the matter Dec. 4, another requirement prior to proceeding with the acquisition of the land.

The parcel is currently owned by Jose Ramos, who purchased the premises for $260,000 in July 2013 with the hopes of building and operating a bakery, according to his attorney Steven Askinas of a Bay Shore-based law firm. Both men were present for the hearing before the village board. Askinas said Ramos was initially asked by the village to clear the property and start over, and he complied with the request. He was also asked for plans to include a second story with space for apartments, which he also complied with in his plans, so that the building would be adherent to the village’s greater revitalization plans.

In early 2016, Port Jefferson Village began taking tangible steps to improve the look and spur economic development of upper Port, the area of the village on Main Street between North Country Road and the Long Island Rail Road train tracks. A blight study was commissioned in May 2016, a requirement to qualify an area for an urban renewal plan by New York State general municipal law. Because the study concluded the cluster of parcels was indeed a blighted area, an urban renewal plan was adopted in October 2016, clearing the way for the village to impose eminent domain over property owners should an agreement not be reached for the village to purchase the property, or if owners do not comply with the village’s revitalization plans.

Askinas said his client has complied with everything the village asked, and still wants to build his bakery and remains willing to include apartments in his plans. During the hearing, trustee Bruce D’Abramo, who serves as the board’s liaison to the building and planning department, said Ramos never submitted a complete application regarding the property. Ramos has rejected offers to sell the property on the open market and from the village, following the commission of an appraisal of the property by the village, according to Village Attorney Brian Egan.

“The total amount to date that he has invested in this property is $380,000, approximately,” Askinas said. “He wants to put his bakery in. He’ll put apartments up top. If there’s a special design plan that is in keeping with the neighborhood or the neighborhood plan for development, he’s willing to do that. To take the property from somebody who’s willing to put into this area makes very little sense. I’m sure whatever the village is offering my client would not be fair recompense for what he has put in. It’s four years already he’s been trying to get this done. He has been doing whatever the village asked, and now to come back and say ‘see-yah,’ that’s not fair.”

Public comments can be submitted regarding the matter until Jan. 3, and the village concluded the hearing by asking Ramos to submit a completed application for the site within the 30-day period.

The village was awarded a $500,000 grant in February to be used on the area from Empire State Development, the state’s economic development arm, as part of the Restore New York Communities Initiative, which was created to support municipalities in rehabilitating blighted commercial properties. Garant also announced the state selected Port Jeff Village as a recipient for another $350,000 in grant money earmarked for improving the southern gateway to the village near the train tracks. She added the village is in the process of selecting master developers to begin working on the area of upper Port, which she said she expects to begin in early 2018.

Jill Gallant of the engineering company VHB explains Port Jefferson’s urban renewal project at a public hearing at Village Hall Jan. 3. Photo by Alex Petroski

Plans to bring new life to upper Port Jefferson are in effect, as residents and village officials weighed in on the proposed renewal project this week.

Revitalization of businesses and infrastructure in upper Port, the area of Main Street south of North Country Road and north of the Long Island Rail Road train tracks, has been on the mind of the village board of trustees for more than a year. The community had the chance to voice its opinion on the proposed urban renewal project at a public hearing Jan. 3, when a representative from VHB, an engineering and planning firm, presented the findings of a blight study and laid out the plan.

Port Jefferson Mayor Margot Garant shows attendees at a public hearing Sept. 26 plans for the revitalization of Port Jefferson Station. File photo by Alex Petroski

A blight study was ordered by the village in May 2016 in order to qualify for an urban renewal plan, which is required by New York State general municipal law. Based on the findings of the study, the board determined the area was appropriate for an urban renewal project. The village hopes to eliminate substandard conditions identified in the blight study, redevelop vacant and deteriorating properties, create new housing opportunities, improve public safety, and generate economic activity and support for retail and service establishments through development of new housing in the area. VHB recommends a mix of ground-floor retail and commercial uses and upper-floor living spaces as a way to address several concerns in the blight study.

The study found the upper Port area has a number of poor building and lot conditions, a cluster of vacant lots and storefronts, lots that don’t conform to zoning regulations, building code violations and public safety issues.

As a result of the blight study, if necessary the village can now impose eminent domain on property owners in an effort to promote growth and development, meaning the village government now has the right to take land from a property owner in exchange for compensation. Village Mayor Margot Garant has repeatedly said the board has no plans to use eminent domain currently, but called it “another tool in the toolbox,” adding she hopes to have full cooperation from owners in the area.

Several community members voiced concerns about a lack of affordable housing in the area as a result of the plan.

Barbara Sabatino, who owns Port Jeff Army Navy, a retail store in the blighted area and lives in Port Jefferson, said she is in favor of revitalizing the area, but acknowledged that redevelopment could push out hardworking families who can’t afford an increase in rent.

“Other than the people who rent a room out of their house — and there’s an awful lot of those in Port Jeff Station — I don’t see any safety net for those people,” she said. “If you want to clean up the area and make it more attractive, we need to change the mixture of tenants.”

“Just getting people interested in redeveloping uptown is no easy task.”

— Margot Garant

Garant responded to Sabatino’s concerns.

“I think it’s a careful balance between wanting to keep young families and senior citizens and people who want to afford to live in the village as a family unit or individually, and other situations where you have people who bring other people in to help them pay the rent and it’s an uncontrollable rental situation,” she said. Garant reiterated the village’s preference would be to have a private developer revitalize the area in partnership with property owners without requiring the use of eminent domain.

Village resident John Koehnlein also expressed concerns about the project and the affordability of living in Port Jefferson upon its completion.

“To make it work you have to have families in there and it has to be affordable,” he said. “You’re also going to displace a lot of the families that are there right now.”

Garant explained the difficult position the village is in with trying to revitalize the area while maintaining a level of affordability.

“We’re trying to partner with Stony Brook University, we’re trying to partner with a lot of different entities to get more interest in redeveloping uptown,” she said. “Just getting people interested in redeveloping uptown is no easy task.”

The plan will still require official board approval in the coming weeks to proceed.