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Brookhaven Industrial Development Agency

A rendering of the planned Heatherwood Golf & Villas in South Setauket. Rendering from Town of Brookhaven Planning Board

The proposed apartment complex project on the property of the Heatherwood Golf Course in South Setauket will not receive a tax benefits package after the Brookhaven Industrial Agency rejected a proposal that would cut property taxes on the land by $3.76 million over 13 years at a hearing Aug. 21.

Also included would be $2,854,000 in sales tax exemptions and $420,000 in mortgage recording tax exemptions. In total the developers would see savings of more than $7 million.

The decision proved to be a small victory for some area residents who have been against the project since its inception. They were concerned that the proposed tax breaks could negatively affect local school districts and development would increase traffic congestion at the intersection of Route 347 and Arrowhead Lane.

Representatives for Heatherwood said at the meeting that they could not move forward with development without the tax breaks.

Salvatore Pitti, president of the Port Jefferson Station-Terryville Civic Association, said the notion of developers abandoning the project was wishful thinking.

“We never wanted it from the beginning,” he said. “The entire community has been against it.”

The proposed project dates back to 2014 when it was brought up to the Town of Brookhaven zoning board and was approved of a crucial zone change that allowed for apartments on the property. As a part of the approval, the town board required the property owner to donate 40 acres of land to the Manorville Farm Protection Area, remove a billboard at the golf course and construct a sidewalk on the east side of Arrowhead Lane.

“The zone changes already occurred,” Pitti said. “We’ve already accepted the fact that it will be developed [eventually].

“Why do you need tax breaks if you don’t have the money to build it? It came off as them being more greedy.”

–Salvatore Pitti

In 2018, the Planning Board approved the proposed plans for the company to build on nearly 26 acres of its more than 70-acre property. The project, dubbed the Heatherwood Golf & Villas, will be a 200-unit senior apartment complex catering to individuals 55 and over.

The planned project would reduce the 18-hole golf course to nine holes to allow developers to build the apartments and would supposedly bring more revenue to the golf course.

IDA members questioned the reason Heatherwood needed tax breaks to move forward with the project. Heatherwood said that the project would create six permanent full-time jobs, though IDA members said it wasn’t enough jobs to grant it the benefits package.

Herb Mones, chair of the Three Village Civic Association land use committee, was shocked when he first heard that Heatherwood was looking for tax breaks.

“I was like ‘You gotta be kidding me,’” Mones said. “It wasn’t enough that they got the zoning approval, but now they need tax breaks — at some point enough is enough. It is corporate greed.”

Mones argued that the project would forever affect the surrounding communities.

“It adds to the over development, we lose open space and a golf course,” he said. “…We are happy the IDA turned them down.”

Mones along with Pitti wasn’t buying that the project would be abandoned if Heatherwood didn’t receive the tax benefits package.

“There is no possibility that they will not develop that land after they got the zone change, they are going ahead with the project,” Mones said. “It will yield a gold mine for the corporation. We believe this will bring no benefits to the community.”

Despite, the IDA rejecting the package, Pitti said he wouldn’t be surprised if Heatherwood broke ground on the project in the next few months.

A representative from Heatherwood did not return messages requesting a phone interview by press time.

 

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Rendering of the Brockport apartment complex. Construction is expected to be complete in December 2020. Photo from the Gitto Group

As one of the latest apartment complex project in Port Jefferson inches closer to construction, another apartment complex has received tax breaks from an IDA.

Last month, the Brookhaven Industrial Development Agency approved an economic benefits package, which includes a 10-year payment in lieu of taxes, to the apartment complex expected to be built out of the current Cappy’s Carpets building, to be known as The Brockport. Construction is expected to begin this fall. 

The site plan calls for a three-story structure with a total of 44 one-bedroom units and two two-bedroom units. The $16.5 million project headed by Port Jefferson-based The Gitto Group, will have stores, office spaces and a restaurant on the first floor and apartments on the other two floors. 

The current taxes on the property, which was once occupied by Cappy’s Carpets and a boat storage lot are approximately $35,000 annually, according to Rob Gitto of The Gitto Group. The 10-year PILOT would see taxes increasing to $99,183 in the first year and then gradually escalate until the last year when it reaches $213,360. According to Gitto, the retail portion of the

property will be fully assessed as it is not part of the IDA program. 

“We are planning to commence the construction on the site within the next 30 days and we anticipate to be completed with the project by December 2020 — all of this is dependent on what type of winter we have,” Gitto said. 

Paul Casciano, Port Jeff Superintendent of Schools, made it clear he and the district are not against the planned project. 

“We just had concerns and questions,” the superintendent said. “As a district we have to do our due diligence to see if there is any potential impacts — this is what we do. It doesn’t mean we are against the project.”

As part of the response to the SEQR referral for the project in November 2018, the district sent in a letter outlining their questions and concerns. 

With the construction site close to the Port Jefferson high school, the district had concerns over access to the driveway on Barnum Avenue. Also, due to the  close proximity to the site there were concerns of potential dust, fumes and noise from the construction. 

Though questions were raised about how many students this particular apartment complex will bring, Casciano said it’s routine to ask how new developments will impact the district. Other complexes in the village have offered more two-bedroom options. The Shipyard complex has 18 and The Hills has seven. The upcoming complex on Main Street will have two.

The district sent the same letter for the July 17 Brookhaven IDA public hearing.  

Casciano reiterated that they support the project, adding the information is important for them to know for a variety of things including future planning of the district. 

“I think this project will benefit us [the Port Jeff community],” he said. 

Responding to concerns from the community about the impact of construction on the area, Gitto said they do not anticipate any major issues relating to the construction of the complex. 

“The project does not include any road improvements that would require us to close down the road,” he said. “There may be some minor work that needs to be completed by the utility companies, but that would really be it. We are the owners of the adjacent office building to the north [414 Main St.] and the mixed-use property located to the south of the subject property [464 Main St./50 Barnum Ave.] which will enable us to stage any construction equipment or materials without impacting the surrounding areas. The early stages of the project will include typical noise associated with a construction project.”

The development group, which also owns and manages The Hills and the Barnum House apartments, said Brockport will have a minimal impact to the student population of local school districts.  

“The two properties [the Hills and Barnum House] combined have 104 apartments [one- and two-bedroom units] and our records are showing that we only have two school-aged children within these 104 units,” Gitto said. “The majority of our units are one-bedroom apartments which typically do not work well with families with school age children.”  

Once construction on The Brockport is completed, Gitto said they are estimating the one-bedroom units to be around $2,650 per month and the two-bedroom units to be $3,800 per month. The building will be more than 65,000 square feet and have approximately 2,700 square feet of retail space.

 

Northport power plant. File photo

At the Long Island Power Authority’s July 24 board meeting, Larry Kelly, a trial attorney, described at a public comment session how LIPA in 2006 and 2007 instituted what he called “the largest tax fraud” he’s seen in his 35 years as a lawyer, according to Huntington Town councilman, Eugene Cook (R).

Cook has independently asked New York State’s Public Service Commission Chairman John Rhodes in a letter dated Aug. 6 to review and “forcibly address” the issues. 

According to Cook, Kelly alleged that LIPA used the tax system to extend tax exemptions and reductions to Caithness power plant, which was awarded a contract to build a new 350-megawatt power plant in Yaphank, and then used those low taxes to argue in court that National Grid’s four aging power plants on Long Island were overassessed.

“I also request the PSC review LIPA’s ‘unclean hands’ in the Northport filings, and the impact that should have on LIPA’s continued operations,” Cook’s four-page letter concluded. The letter was sent on a town letterhead, but was not signed by other town board members, the supervisor or the town attorney.  

Councilman Eugene Cook

The term “unclean hands” is a legal defense which essentially references a legal doctrine that states a plaintiff is unable to pursue tax equity through the courts if the plaintiff has acted unethically in relation to the subject of its complaint. 

The allegations are surfacing just weeks after closing arguments were presented July 30 in LIPA’s tax certiorari case with the Town of Huntington for the year 2014. It is unclear how the allegation could potentially impact the outcome of the case as post-trial deliberations continue. The unclean hands defense was not part of the town’s defense, according to the Town Attorney Nick Ciappetta, who offered no public comment on the allegations.  

Kelly, a Bayport resident who ran for a New York State Supreme Court judgeship in the 2018 election, is unaffiliated with Huntington’s case, but said his obligation as a trial lawyer is to act as a steward of the law. 

LIPA did not respond to email requests for comment on the public allegations. 

A LIPA press release dated Jan. 25, 2006, stated that the Caithness plant in Yaphank would include a $139 million payment in lieu of taxes agreement with $100 million over 20 years going to Bellport’s South Country school district. 

LIPA’s 2019 Property Tax Reduction pamphlet, which is publicly available and published on its website, highlights the value of Caithness plant in contrast to the Port Jefferson, Northport and three other plants. On page 14 of the report, LIPA stated that in 2016 Caithness paid $9.7 million annually in taxes, while the Northport plant paid “eight times” as much in taxes, or $81 million, and Port Jefferson paid “three times” as much in taxes, or $33 million.  

The report also stated on page 14 that LIPA reimburses National Grid under its contract more than it earns in power revenue, a sum that factors in property taxes. 

“Those losses, the amount by which costs exceed the value of power, are paid by all 1.1 million electric customers,” the report said. It indicated that LIPA’s goal for filing tax challenges in 2010 against Nassau County, the Town of Huntington, the Town of Brookhaven and the Village of Port Jefferson “in an attempt to obtain a fair tax assessment on the four legacy plants.” 

In a telephone interview, Kelly referred to a Feb. 15, 2012 meeting with the Town of Brookhaven Industrial Development Agency, which recorded a Caithness representative explaining that “LIPA pays the PILOT to Caithness who then makes the PILOT payment to the IDA, and then they get a check back from New York State which is then returned to LIPA.” 

The minutes further stated, “This is the only power plant on Long Island that the ratepayers are not paying any real property taxes net out of pocket for the first 10 years, resulting in a saving of $80 million.” 

Kelly and Cook, in presenting the allegations publicly and to the commission, claimed that Bellport’s school district, South Country, which Cook said in his letter is comprised of 40 percent minority populations, were shortchanged tax revenue that could have funded school programs. Representatives from the South Country school district did not respond to email and telephone inquiries about their tax revenue from Caithness. 

The Public Service Commission has said that it has received and is reviewing the letter from Cook. It offered no other response to questions related to its potential response.

A rendering of the planned Heatherwood Golf & Villas in South Setauket. Rendering from Town of Brookhaven Planning Board

The Brookhaven Industrial Development agency voted to postpone a decision to grant Heatherwood Luxury Rentals tax breaks for construction of rental housing units on its current golf course in South Setauket at a July 17 meeting.

File photo by Andrea Paldy

Lisa Mulligan, Town of Brookhaven director of economic development and CEO of the IDA and Local Development Corporation, said there were more than a dozen residents who attended the meeting and approximately six of them spoke during the public hearing. She said the comments varied from traffic concerns — which she added are outside of the office’s scope — and the tax breaks the company is applying for.

If approved at the IDA’s next meeting Aug. 21, Heatherwood could see its property taxes at the location, which falls in the Three Village and Comsewogue school districts, reduced by $3.76 million over the next 13 years. The package would also include $2,854,000 in sales tax exemptions and $420,000 in mortgage recording tax exemptions for a total savings of more than $7 million.

Last year, the Brookhaven Planning Board approved the proposed plans of Commack-based Heatherwood Luxury Rentals to build on nearly 26 acres of its more than 70-acre golf course on the southeast corner of Arrowhead Lane and Route 347. The new development will be called Heatherwood Golf & Villas and will be a 55-and-over community. The company plans to construct 200 rental housing units — 10 percent of which will be set aside for workforce housing units — and an 8,500-square-foot clubhouse with a pool. Heatherwood also plans to redesign the golf course, reducing it from 18 holes to nine.

Development of the golf course has faced opposition from nearby residents, elected officials and local civic associations since it was first presented in 2014. That year, town Councilman Dan Panico (R-Manorville) sponsored the resolution for a zone change for the property from A Residence 5, which allows one housing unit for every 5 acres, to Planned Retirement Community, which would allow a 55-and-over community. On Dec. 16, 2014, the town board approved it by a 4-3 vote. Councilwoman Valerie Cartright (D-Port Jefferson Station), former Councilwoman Connie Kepert (D-Middle Island) and Supervisor Ed Romaine (R) dissented.

The town board placed conditions on its zone change approval, including requiring Heatherwood owner Douglas Patrick to donate 40 acres of land to the Manorville Farm Protection Area, removing a billboard at the golf course and constructing a sidewalk on the east side of Arrowhead Lane. The town accepted the 40 acres of property in 2015 in lieu of the Pine Barrens Credit redemption required under the Planned Retirement Community code.

Cartright said in an email that within her district the project has been a highly controversial one.

“The community was against it from the get-go, and it was still able to squeak by somehow.”

— Salvatore Pitti

“Numerous residents and organizations have raised concern about this project, notably density and traffic concerns, especially in light of the existing traffic issues at this location,” the councilwoman said. “I stood with members of the community and opposed this application. However, over my objection and vote in opposition, the application was still granted, and open space benefits were provided to other areas outside of our community. The applicant has always touted this project as tax positive to the local school district. This application to the Brookhaven IDA seems to be in clear contravention to the promises made to our community.”

John Gobler, a nearly 50-year homeowner in Heatherwood Village South in South Setauket, is one of the residents who is concerned about traffic. At the July 9, 2018,  planning board meeting, he said the intersection of Arrowhead Lane and Route 347 has been a problem for several years due to the number of cars exiting onto Arrowhead and the timing of lights at the corner, where he has witnessed only four or five cars being able to go through a green light at one time.

Salvatore Pitti, president of the Port Jefferson Station-Terryville Civic Association, said in a phone interview the group has been opposed to the development since the beginning. He was on hand for the July 17 IDA meeting where he addressed the residents’ concerns about Heatherwood applying for tax breaks.

“If you’re a contractor, and you don’t have money to build a project, then don’t build it,” Pitti said. “The community was against it from the get-go, and it was still able to squeak by somehow. So why should we be burdening ourselves with less taxes coming our way from a new development when [Heatherwood] is the one who is going to be raking in all the profit.”

Herb Mones, chairperson of the Three Village Civic Association’s land use committee, said the community has not supported the development since it was first proposed in 2014. He said he feels Heatherwood asking for tax breaks is an example of corporate greed.

“We are going to feel the effects of this high-density buildout in the Heatherwood area without any kind of benefit, and for the corporation to now apply for even more advantage, after getting what was millions of a windfall in a zone change, is almost incomprehensible,” he said.

George Hoffman, first vice president of the Three Village Civic Association, said the IDA should reject the request.

“Our civic association was concerned that the zoning was changed without any community input, and we remain concerned that this ill-conceived project now seeks taxpayer-funded incentives like property tax abatements and sales tax exemptions,” he said.

Douglas Patrick could not be reached for comments before press time.

Developer to get financial assistance from Brookhaven Industrial Development Agency

The location of the future senior residential community The Vistas of Port Jefferson off North Bicycle Path in Port Jefferson Station. Photo by Alex Petroski

What is currently an open field on North Bicycle Path in Port Jefferson Station will soon be home for some.

A new 244-unit residential rental complex for senior citizens proposed

27 acres of vacant land on the west side of North Bicycle Path, north of Comsewogue High School, has been greenlit. The Brookhaven Town Industrial Development Agency announced in an April 26 press release it had approved an application for economic incentives with Benjamin Development Co., operating as The Vistas of Port Jefferson LLC, which will also be the name of the new community. The IDA is tasked with selecting projects that “promote the economic welfare and prosperity of the Town of Brookhaven by assisting in the acquisition, construction, reconstruction, and equipping of commercial and industrial facilities.”

As part of the financial assistance agreement between the agency and developer, The Vistas of Port Jefferson will make payments in lieu of property taxes for 13 years, starting with a $52,000 installment in year one, jumping to about $90,000 in year four, and concluding with a $1,516,043 payment in the final year of the agreement. In total, the company will pay about $8 million in lieu of higher town property taxes during the 13-year agreement. The total cost of the project is expected to be about $65 million.

The area boxed in red represents the location of the future senior residential community The Vistas of Port Jefferson off North Bicycle Path in Port Jefferson Station. Image from Google Maps

Lisa Mulligan, chief executive officer of the IDA, declined to comment on the agreement in a phone interview beyond what the agency offered in a press release, though she said the ball is in the court of attorneys on both sides to officially close the deal, which she said she fully expects to take place.

A request for comment to Benjamin Development Co. was not returned.

“As a result of IDA assistance for the development of this project, hundreds of new construction jobs will be added to the region,” the company’s application to the IDA stated. “The project development will also benefit local/regional firms through purchases from suppliers, subcontractors, etc. Finally, the project will create new full-time jobs and 245-plus new residents that will assist in the stimulation of the local economy through daily household spending.”

The project is expected to create more than 400 new construction jobs as well as 24 new permanent positions, according to the IDA press release. The Vistas of Port Jefferson will offer 64 two-bedroom townhouses, 36 one-bedroom units, 144 two-bedroom apartments with a clubhouse and a sewage-pumping facility. Construction is expected to take about two years. The facility is billed as a community for tenants age 55 and up. Fifteen percent of the units will be designated as affordable housing, available to prospective tenants earning less than 80 percent of the area’s median income, which was about $90,000 per household from 2012 to 2016, according to the United States Census Bureau.

Brookhaven Councilwoman Valerie Cartright (D-Port Jefferson Station) said in an emailed statement through Legislative Secretary Carolyn Fellrath the town IDA is a separate entity from the board and does not seek input from councilmembers in making decisions.

“This proposed project has generated concern in the community,” Cartright said. “The re-zoning of this parcel in 2010 pre-dates my tenure. However, based on the community concerns raised to my office, I am not sure the decision to re-zone this parcel to Planned Retirement Community would be granted if this application were before this town board today.”

A rendering of the Overbay apartment complex. Image from The Northwind Group

By Kevin Redding

A new, 52-unit apartment complex being built in Port Jefferson Village this spring just got a financial boost from the town.

The $10.8 million project, which will be called Overbay, was recently approved for a package of economic incentives that includes sales tax exemption and payments in lieu of taxes, or PILOTs, by the Town of Brookhaven Industrial Development Agency.

During a Jan. 10 meeting, members of the IDA board announced the approval for the Hauppauge-based development company, The Northwind Group, to construct the 54,000-square-foot “nautical-style” apartment building on the now-vacant site of the former Islander Boat Center building on West Broadway, which was demolished by the company in February. The IDA received Northwind’s application in 2015.

Overbay would stand as the third new apartment complex built in the village in recent years. With the IDA’s assistance, it is expected to have considerably lower rent costs than the others in the area, according to Lisa Mulligan, IDA chief executive officer.

Prices for the units have not been established yet. When Northwind managing member Jim Tsunis received approval by the village building and planning department for the apartments in 2015, he estimated rents would range between $1,800 and $2,200 a month, Mulligan said.

“Just in general, the need for affordable rental housing in the Town of Brookhaven is well documented and significant, so our IDA board of directors felt this was a project that would help fill that need,” Mulligan said, adding Overbay will be especially helpful for college students and seniors. “The clientele is anybody who is looking to move out of their home and into something that’s a little easier to upkeep. There aren’t enough legal rentals that are [affordable]. A development like this one provides that option.”

Frederick Braun, chairman of the IDA, spoke of Overbay’s benefits in a press release.

“This project will bring much-needed rental housing to an area near to Stony Brook University and Port Jefferson’s Mather and St. Charles hospitals and spur additional spending in the village and the town,” he said.

The complex is also expected to create two permanent jobs — Mulligan speculated perhaps a rental agent and a building superintendent — and 150 construction jobs over a two-year period. IDA financial incentive agreements typically require the creation of jobs, both permanent and construction related.

Tsunis said the incentives will help Northwind offset the Islander Boat Center building’s $200,000 demolition costs.

“It’s going to enable me to spend more money on the building, so the end result is there will be a better product for the residents of Port Jefferson,” Tsunis said. “It’ll definitely bring people into the downtown area that will spend money at the local shops.”

Community response has long been mixed on the project, even within the village board.

Overbay’s eastern neighbor, The Shipyard apartment complex, which was constructed by Tritec Development Group, opened in January. That project secured a financial assistance package from the Suffolk County IDA and will make PILOT payments to the village for 15 years in lieu of property taxes.

The influx of new village residents without the benefit of increased property tax revenue has been a point of contention for property owners.

“I think it’s a real disaster for the village that they were able to get this financial assistance,” 30-year village resident Molly Mason said in a previous interview, referring to The Shipyard. “It’s like we’re giving away the store.”

Village Mayor Margot Garant and the board of trustees previously opposed the financial assistance granted to Tritec.