Hotel Tax Break Decision Near
As expected, the Town of Hempstead Industrial Development Agency will hold a special meeting on Tuesday, June 10th to consider whether or not to offer financial assistance in the form of tax breaks to Alrose GCH LLC, the corporation interested in acquiring the Garden City Hotel.
The meeting will begin at 9 a.m. at the Old Courthouse, located at 350 Front Street in Hempstead.
The deal must be approved by a majority of the six-member IDA board. The IDA is a non-profit public benefit corporation authorized by New York State to promote economic development with financial assistance and tax relief.
Allen Rosenberg, who heads the Alrose Group, 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.
Approximately 20 people attended the last meeting on the issue on May 28th. Nassau County Tax Assessor Harvey Levinson has been one of the most vocal critics of the deal and the agency. Levinson claims that the IDA made no real effort to notify the public about this issue. He also questioned why the agency should even consider giving tax breaks to a well-financed operation willing to spend a reported $91 million to purchase the hotel.
Frederick Parola, IDA executive director and CEO, has said that Rosenberg would have difficulty completing the deal without the tax benefits. The money saved will go toward the hotel improvements, which "will ultimately benefit the taxpayers of Garden City when the IDA incentives terminate and the enhanced value of the property is fully taxed," he said in a letter to Levinson last month. Parola said adequate notice was given and his agency followed all legal notice requirements.
Fore more information on the IDA, visit www.tohida.org.
