By Stephanie Mariel Petrellese

Nassau County Tax Assessor Harvey Levinson publicly voiced his disapproval of a potential deal between the Town of Hempstead Industrial Development Agency and the reported buyer of the Garden City Hotel at the May 22nd meeting of the Garden City Board of Trustees.

"There is no sunshine here," he said. "You have to go to a Web site to find out what's happening and there has to be some review of what the IDA is doing. It's affecting Garden City and it's affecting the school district."

He asked the Board to pass a resolution requesting the IDA to adjourn the hearing and vote, which was scheduled for May 28th. (The IDA board decided to table discussion and postponed the vote.)

Mayor Peter Bee and the Board were reluctant to align themselves with the assessor, and did not pass the resolution. The mayor said the Village would rather focus on how property taxes may be affected and not become involved in Levinson's concerns about the "degree of sunshine that does or does not exist" within the IDA.

As reported in the May 16th issue of the Garden City News, the Town of Hempstead Industrial Development Agency is planning to vote soon on whether or not to offer tax breaks to the reported buyer of the Garden City Hotel, the Alrose Group, headed by Woodmere-based developer Allen Rosenberg. The IDA is a non-profit public benefit corporation authorized by New York State to promote economic development with financial assistance and tax relief.

Rosenberg is planning to spend $13 million for improvements to the hotel, including an upgrade of all rooms, banquet and dining facilities. To assist him in this regard, the IDA is offering abatement of real property taxes on the increased assessment resulting from the improvements, as well as sales tax exemptions on furnishings and exemptions from the mortgage recording tax if required.

From June 1st until May 31, 2009 the hotel will pay $536,889.60 in Village taxes. If the deal goes through, that number would remain the same for a total of three years and then marginally increase over the next seven years.

During the lease period when the developer is receiving the IDA tax benefits, he will make payments in lieu of taxes, otherwise known as PILOTs. These payments will be distributed proportionally to local tax jurisdictions.

According to Village Counsel Gerard Fishberg, the Village is "fairly well-protected." The Village has been assured by IDA counsel and Frederick Parola, IDA executive director and CEO, that the payments in lieu of taxes, known as PILOTs, will be equal to the taxes the Village would otherwise assess. The Village would not normally reassess the property based upon the type of improvements being considered.

Levinson claims that the agency made no real effort to notify the public about this issue. He also questioned why the IDA should even consider giving tax breaks to a well-financed operation willing to spend a reported $91 million to purchase the hotel.

The argument of why a well-financed developer should get tax breaks was argued by Village Counsel Fishberg in another case where IDA financing was eventually granted to another property in Garden City. At a public hearing held by the IDA before granting benefits to the Albanese Organization for the purchase and renovation of a 133,000-square-foot office building at 1001 Franklin Avenue, Fishberg said the Village argued that the developer did not need over $30 million in IDA funding to have a competitive building. "Frankly, that argument fell on deaf ears," he said. "The IDA did what they wanted to do, not withstanding that."

Garden City resident Sonja Slattery said that IDA financing should be used to encourage developers to renovate buildings in undeveloped areas. "There really is no risk to doing business here in Garden City and it seems to me that they should be paying more of their own way." Mayor Bee responded that she should address her concerns to the state legislature and the IDA.

She said that AvalonBay, who has been designated by the Board of Trustees as the exclusive developer of the St. Paul's historic main building, is looking into a possible deal with the IDA.

Second Deputy Mayor Thomas Lamberti, who chairs the Mayor's Committee on St. Paul's, said there will be full public disclosure of any future financial arrangements. The Board has not voted on whether or not to go forward with AvalonBay. Currently, AvlonBay's financial proposal to the Village is being examined by an outside consultant. Lamberti said he hopes to have a public presentation by the middle or end of June.