By Stephanie Mariel Petrellese

The Town of Hempstead Industrial Development Agency has officially rescinded the tax abatement it granted in June to Allen Rosenberg, who had been the proposed buyer of the Garden City Hotel at the time, announced Superintendent Dr. Robert Feirsen at Tuesday evening's Garden City Board of Education budget work session.

"We feel that this is a very important precedent because they just didn't let that tax abatement sit there on the records," he said.

The school district is very pleased with the action, even though it can be considered a non-issue since the deal between Rosenberg and the current hotel owners was never completed. In December, Nassau State Supreme Court Justice Stephen A. Bucaria decided that Rosenberg defaulted by not closing on time.

"Justice Bucaria's decision to invalidate the contract for sale made the matter moot and the IDA board moved, at its meeting on Wednesday, January 28, to rescind the resolution," said Fred Parola, the agency's chief executive officer, in an announcement posted on the IDA's Web site.

In June, the IDA approved a deal with Allen Rosenberg of the Alrose Group which froze the property's current $1.7 million total for school, county and village taxes for three years. The corporation was to make payments in lieu of taxes, known as PILOTs, which would increase modestly over the next seven years. The hotel would have been required to pay its full share of real estate taxes beginning in the eleventh year. The agreement also included sales tax exemptions for the hotel renovation and exemption from a one percent mortgage recording fee. Albert Chase, Garden City School District's assistant superintendent for business and finance, estimated that the district would experience a loss of $2.8 million in tax revenue over the 10-year period.

"We're delighted at the outcome because it means we are back in a position where those kinds of gifts of tax abatements will be looked at and scrutinized very carefully, we hope, for the future," Dr. Feirsen said. "I thank the Board for its support of that initiative, and congratulate the Board on its courage and its persistence in pursuing that issue."

Although the Village and school district's lawsuit began in July, months after Justice Bucaria claims Rosenberg was in default, he credited the village and school district with "derailing" Rosenberg's attempt to secure tax breaks from the IDA with their legal action against the agency.